BANGALORE, INDIA: MVAS value chain consists of about half a dozen categories of players. They are content creators (IMIMobile, Mauj, One 97, Hungama Mobile), content aggregators (Indiatimes, Hungama Mobile), handset manufacturers (Nokia, Motorola, LG, Samsung, Sony Ericsson), mobile operators (BSNL, MTNL, Airtel, Vodafone, Idea Cellular), content owners (Media players such as Sony, Zee TV, Star) and technology enablers (OnMobile, Bharati Telesoft, Webaroo).

As against the established MVAS market such as China, Japan or Europe, India has a very unique revenue sharing mode. Here, it goes 70-30 percent in the favour of mobile operators. This has brought in a major discontent among the others in the value chain.

Lately, operators are loosening their stands on this. “Vodafone has already started offering 40 percent revenue share for certain properties in MVAS segment,” says Shivkumar Jagannath, CTO, Verity Technologies.

Vishwanath Alluri, founder and CEO of IMImobile, says: "Currently, mobile operators are only focused on expanding their networks and improving their subscriber base. For them revenues accrued through data services is not huge and hence not been given much priority now. Once they achieve the saturation point, they will pay more attention to VAS services," Alluri notes.

“This revenue disparity though skewed, will be sorted out on its own when we reach some kind of saturation point in the market. Once the push towards data services happens, operators will devise better revenue share for MVAS players as they need better VAS services and better VAS players."

"I see, maybe after three years, when mobile penetration will hit saturation, operators would think of sharing the revenues equitably. Today for telcos, it's about grabbing more voice customers, not about revenues accrued through VAS services," Alluri opines.

"Having said that, going forward, revenues from mobile data will be 40 percent of total revenues of operators and hence operators will seriously think of addressing the issue. Also, because of stiff competition operators will have to lower their voice tariffs even more, so it becomes important for operators to carve a well though out data strategy to increase their ARPUs and better arrangement with VAS providers," Alluri adds.

Pankaj Sethi, president- corporate services- VAS, TTSL, said: “Revenue sharing arrangements are best worked out by market forces and is dependant on the quality of product and value of copyright. Better value copyright and products attract better sharing arrangements. This is true for instance in the broadcasting and entertainment business. Mandating revenue shares is contrary to the spirit of free enterprise and innovation.”