BANGALORE, INDIA: India may be a fast growing telecom market but is it an attractive market for operators and VAS companies?

The answer seems to be a big 'no' going by the majority of speakers during a panel discussion on 'Product strategies in the telecom sector: Potential for global leadership' as part of the NASSCOM Product conclave and Expo 2009 which began here today.

The experts, however, had a piece of advice to technology companies that looking at growing with the telecom operators: Bring out products that can be differentiators to succeed.

Making his point at a panel discussion Sangeet Chowfla, chief strategy officer and EVP products, Comviva, noted that the operators in Latin America  earn  20 per cent of revenue from Value Added Service (VAS) while the revenue is just around 8 per cent in India.

“Further, the intense tariff competition has left the operators worrying. This is the reason why even the homegrown operators were looking at expanding business outside India also,” he said.

In this context, it is important that the companies looking to grow with operators understand the customer needs in  depth,” Chowfla added.

He stressed that for any company to succeed a product was least important. What is important is customer acquisition with a right model, capital and management.

Another panelist Manoj Dawane, CEO, Mauj Telecom, observed that, of the 450 million mobile subscribers in India only at 50 million are postpaid subscribers. This means that a vast majority of mobile subscribers do micro transactions and the challenges for VAS companies in tapping the customers lies there.

In the current context, even if a company had the best VAS it it not sufficient. VAS companies need to understand the tastes of customers in order to be successful, he opined.

With the kind of intense competition the Indian telecom market is witnessing, it will be the key differentiators that the operators will be looking for. But VAS as companies should also be prepared to accept lower share of revenue as they eye for rolling out their services through multiple operators, Dawane observed.

Sanjiv Mital, founder, Saarthi Enterprises, noted that it was time for Internet companies to look beyond advertisements as the only source of revenue and mobile business dependent on operators.