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On July 04, 2011 TRAI issued fresh guidelines on Provisioning of VAS services. According to me these guidelines will severely impact the VAS business which currently contributes 10% to 12% of Mobile Service providers. The TRAI guidelines can be accessed from following links

http://www.trai.gov.in/Press_Release_direction_VAS.pdf

http://www.trai.gov.in/WriteReadData/trai/upload/Directives/147/direction_VAS_fina4-7-2011.pdf

I am highlighting the Key recommendations and its impact on Business

1. TRAI has made it mandatory to take written consent even if customer himself is opting for the service by dialing short code or sending voluntary SMS for service activation. Pull based service requests are as good as voluntary consent only and it is as good as customer dialing any other mobile no. or sending SMS to his friend. Moreover any mode of activation is successful only if customer give his dual consent for service activation what it implies is he needs to press atleast 2 keys as prompted by IVR to activate the service. Moreover for every key press DTMF CDR is generated and it is undoubted & undisputed proof that customer has activated the service by voluntary consent.

2. TRAI has mandated to take consent either through SMS or Email or FAX or In writing now if we analyze 4 modes then we will come know that all 4 modes together does not cover 100% of mobile population becoz of limitations of each mode. These days most of customer acquisition is coming from semi urban and rural areas i.e. bottom of Pyramid. Secondly the customers are so price sensitive that they are opting for lower denomination recharges. In this scenario i am listing down limitations of each mode recommended by TRAI

(a) SMS: Currently for any operator penetration of SMS does not go beyond 50% so effectively this mode of activation and deactivation can be accessed maximum by 50% of subscribers only. Secondly this mode is popular only among youth and urban population. If we go semi urban and rural still the subscribers are not comfortable in using SMS. Infact if customer is advised to send SMS in one particular format than in all probability 40-50% subscribers will send it in a wrong format i.e. subscriber will not put space between keywords or will type in wrong keywords etc etc.

(b) Email: We all know how many subscribers have access to internet or Email. Currently as per unofficial statistics only 7% of India population has access to Internet. Again this mode is also more of urban and youth centric phenomena.

(c) FAX: A one pager fax today cost approx 12 Rs including STD charges. For 15 Rs or 20 Rs VAS service who is the fool to send FAX confirmation & Who has time to find the shop with FAX facility. Secondly STD booths are disappearing these days and penetration of FAX machine is very very low in both urban and rural centres.

(d) In Writing: How many of us write postcards or inland letters or for that matter send couriers until unless it is absolute necessary. Again the cost of sending courier is between 15 Rs to 30 Rs from any local courier company. Again going by same logic for 20 Rs service who will spend 20 Rs or so. In this country where people will not mind walking extra distance of 1 KM if they get Onions 1 Rs per kg cheap from some other shop, no one spend Xtra amount on this. Also can someone explain how can a written communication from subscriber can reach operator within 24 Hrs. Suppose i subscribed to VAS at 9 PM today and tomorrow i will send written communication from Kolhapur to Pune (Operators office). How this letter will reach Pune from Kolhapur same day evening.

It is practically impossible that subscribers will opt for any of above modes becoz of Cost and Inconvenience attached to same. We can’t expect customer to go extra mile for activating VAS becoz Firstly VAS is not a core requirement of subscriber it’s a satellite requirement and SecondlyVAS is impulse buying like Chocolates & other stuff lying near billing counters (Impulse Buying). If u give time to subscriber to think and evaluate than he will never go for impulse buying.

In a nutshell there is stark difference in TG of VAS users and TG who access modes suggested by TRAI for activation. Now the subscriber needs to be super intelligent to access VAS services. He should be tech savvy, should be ready to spend additional 20-30 Rs & should have lot of free time to do this running around. The big question is how many sub will send confirmation and follow this?

3. TRAI has mandated that customer can send confirmation within 24 Hrs and if no confirmation received than service can be discontinued so what it actually means is customer can enjoy service for free for 24 Hrs. As we know people love anything which comes free so what subscriber will do, he will subscribe and enjoy service for free for 24 Hrs.

4. Also it is very strange that in case of insufficient balance, customer consent is required again for service continuation. Let me take parallel example from service industry only. For availing bank services customer need to maintain AQB of 10k for Urban Areas and 5k for Rural Areas & in case customer avail service like bill payment he needs to pay some additional amount. Suppose after Q3 customer does not have sufficient balance in account & he has opted for Bill Payment service by giving consent. Also he consented on charges for non maintenance of AQB. Will bank not charge customer after Q3 or Bank will again take consent for deducting amount. Same goes for any other service like Demat Charges or Debit Card fees. I dont know why dfferent yardstick for VAS.

Besides the above mentioned there will be Operational difficulties for operator e.g. Deferred Charging of VAS, Keeping records of all requests received, Manual intervention in case of Insufficient Balance etc.

I personally feel this directive will kill the VAS business and will impact operators revenues to great extent. Any kind of process drafted should make life simple for all stakeholders rather make life complicated. In todays world success of any access medium depends on ease and convenience of use, be it Internet or Mobile or any gadget or any service. The more we complicate things, the more users will move away from the same rather it should have been mandatory for operators to maintain CDR’s of customers consent. CUSTOMER IS KING BUT NOT THE GOD.  

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