"Mobile VAS will be larger than the internet"

Q. Most people in the mobile industry think that the VAS explosion will take 18-24 months to reach its full potential. What is your view on this?

A. In what we call traditional VAS, person-to-person SMS was worth Rs 300 crore five years ago. Today, it is touching Rs 5,000 crore and it is growing by 50-70 per cent a year. That means, in another three years, its size will be larger than the advertising industry. I don't think we should think of VAS in a limited window � that it's going to grow and mature and then stabilise. The analogy I would use is: VAS is like what the Internet was. And if you look at the Internet, it is still growing after 10-12 years. The same thing will happen to VAS.

Secondly, I believe VAS will be larger than the Internet, particularly in countries like India. Because the phone is so ubiquitous in India and the growth of VAS is far in excess of developed markets. Everybody I have met, from Telefonica to Vodafone to AT&T, cannot believe the results we are achieving in India because it is way beyond what they are getting. The classic examples are caller tunes or ring back tones, which are big VAS products. Most of the Western operators who have this product have market adoption rates of less than 5 per cent. In India, the number is 20 per cent, and very soon, it will be 30 per cent. So, obviously, either their markets are fundamentally different from us � which I don't believe � or we are doing something different. I believe we are doing it far differently than they are and many of the lessons are replicable overseas. In fact, we are doing that and talking to overseas operators and very soon we will roll it out.

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