Google Operator Billing Initiative - Lifeline

for MVAS companies in India

At last Google stuck much awaited operator billing deal with idea for operator billing and gave

clear intention to other players to also patch their billing to be on the profitable side. As per the

analyst report, Indian user will be downloading more than 9 Billion application in FY 16-17 and

offer huge opportunities for Idea to increase their VAS revenue. Post MVAS regulation, all

mobile operator struggled to maintain their high margin VAS business. Post MVAS regulation

and subsequently double consent as well as failure rate limitation imposed by Operator impacted

mobile VAS company inside out.

It also forced the VAS companies to spend good $1 per user acquisition on the mobile

advertisement and RoI was getting squeezed out. Google tried to do the similar deal with few

other leading operator in the past but at that point of time the day was in operator favor and

Google Android ecosystem was in the formation phase and hence Google faced number of

hurdles to convince their business case. Now loaded with more than 1.4 Million application or

other contents, as well as the more than 2.7 Billion Android devices worldwide in the market

place enable Google to control more than 75% of the Smartphone segment if we remove the

feature phone segment.

The flagging business around MVAS will get the lease of life as well as its blessing in disguise

for Mobile Operator's as they will get millions of user to be patched in immediately. Hundreds of

thousands companies will be coming forward now and will be placing their application and

games in the paid segment and hence it is expected that the paid user % in India will increase

from 10 % to 25% in coming one year if other competitors of Idea follows Idea footstep's. The

move will reduce the reliance of application or game provider on advertiser which is generating

less than $.10 per active user and making it difficult for the game as well as app developer to

survive basis their business case.

In my point of view the Google move will directly impact their profitability which will be shown

in their result in next few quarters once the real user start pouring in. Till now Google also

struggled to monetized their Google Play and in terms of revenue generation they are far behind

Apple Store.

I also believe that the Indian MVAS companies which struggled to survive and many went under

water due to MVAS regulation will be partying especially companies like On mobile and other

who are still offering major chunk of content to their Operator partner. It will open a flood gate

of user for those companies to launch their VAS product and will be less dependent on Operator

coordination.

As a whole, the initiative of Google is well appreciated for the benefit of Indian MVAS

ecosystem.

Originally Read at- www.linkedin.com