Value Added Services - Series 1

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Value Added Services -1 July 08, 2009 – Rev 1.0.0 Objective: The objective of the document is to describe the logics of some of the Value Added Services implemented worldwide. To have an intro and importance of VAS, one or two pages will have some data. This document will have description of one service and the upcoming series will have other services also. Short intro to VAS and Mobile history: The term VAS (Value Added Services) mainly belongs to Telecommunication Industry and related to non-core services provided by the telecom industry. Other than basic voice and fax services all other services are known as VAS. World’s first telecom network was launched on July 1st, 1991 by Finnish Operator Radiolinja in technical assistance from Ericsson. Several world’s first including world’s first person-to-person SMS text message, sent in 1993; world’s first fixed mobile service bundle in 1996; world’s first paid downloadable mobile content, a ringtone in 1998. It will be interesting to know that in India commercial mobile services were introduced in August, 1995. The first call was made by Mobilenet group, a joint venture between Telstra (Australia) and B.K. Modi group in Kolkata. The call was made from Nokia 2110 handset and the price of handset was Rs.40, 000 and call rates were Rs.17/min. It was termed as losing business to start a Mobile operator network as the handset rates and call tariffs were very high. Importance of VAS: As per IMRB research as of 2006, The Mobile VAS industry in India is estimated at Rs. 2850 crore at the end of 2006 and is estimated to grow at 60% to touch Rs. 4560 crores at the end of 2007. This space is currently completely dominated by entertainment services and comprises of; P2P SMS -Rs. 1140 crore; Ringtones (including CRBT) - Rs. 1026 crore; P2P & A2P- Rs 428 crore; Games & Data- Rs. 171 crore; Others (MMS etc) - Rs 86 crore. Out of the revenue, 60% goes for the operator, 25% for the aggregator or developer and 15% goes for the copyright owner. And the

market grows at rate of 40% every year pertaining good fortune in business. Key Numbers as of March 2008 Mobile Subscribers Avg. ARPU Industry Revenue Annual Revenue Market Cap VAS Providers Revenue VASPs Market Cap

250 million Rs 250 / $6 $ 1.5 billion per month $ 20 billion $ 120 billion $ 0.18 billion $ 1.5 billion

ARPU Split of Rs 250 Voice + Rentals P2P SMS (primarily)

90% 5%

Rs 225 Rs 12.50

Includes Rentals, Activation Charges, etc. None of this flows through to the VAS Providers

Also: GPRS Data, Call Roaming, CLI Other VAS

5%

Rs 12.50

Rs 4,300 cr / $1 billion annualised revenue Rs 750 cr cr / $180 million annualised revenue

Revenue for VASPs

17% of the Rs 2 5% above

VAS Revenues by Category Categor Penetratio Numbers Revenue y n (million) (Rs / mo) P2P SMS

35%

80 m

Rs 30

CRBT

25%

65 m

Rs 25

ARPU

Total VAS Annual Key Revenue Revenue VAS Players (Rs / mo) (Rs / mo) Revenue Rs 11 Rs 250 cr Rs 3,500 cr Rs 5.50 Rs 165 cr Rs 30 cr Rs 350 cr OnMobile BhartiTele

30 m

Rs 20

Rs 3

Rs 60 cr

Rs 10 cr

Hungama Rs 125 cr OnMobile

IVR / Voice Portal

15%

Downloa ds (Rington es, Wallpap ers, Games) SMS Subs. P2A SMS Misc

10%

25 m

Rs 10

Re 1

Rs 25 cr

Rs 6 cr

Cellebrum Rs 75 cr Hungama

5%

15 m

Rs 20

Re 1

Rs 30 cr

Rs 6 cr

Rs 75 cr One97

15%

30 m

Rs 6

Re 1

Rs 30 cr

Rs 6 cr

Rs 75 cr IndiaTimes

Re 1

Rs 50 cr

Rs 5 cr

Rs 50 cr

One97

TOTAL (ex-P2P SMS)

250 m

Rs 12.50 Rs 360 cr Rs 63 cr Rs 750 cr

Points to note: • • • •

P2P SMS Penetration is about 35-40%, while VAS Penetration is at best 25-30% of all users SMS in all its forms (P2P, P2A, Subscriptions, A2P) is the biggest revenue generator after voice Music (as part of a broader Entertainment category) is the bedrock of the VAS Industry accounting for over 50% of non-Voice/SMS revenues (CRBT, Ringtones) Voice Portals are the other big revenue generator, as they are the gateway to a wide variety of content

Thanks to Source: http://emergic.org/2008/08/10/indias-mobile-vasindustry/ With the increase in number of mobile operators, the competition gets tougher and only the fittest can survive well and exist. To increase the subscriber base, all operators are forced to reduce the call rates from Rs.40 for an outgoing local call in 1995 to mere 10 paise as of now. With this call tariffs the operator can increase the sub base but in terms of revenue, there cannot be significant growth. Introduction of VAS solves the problem. Several new services like CRBT (Caller Ring Back Tone), MMS, SMS, Internet help and tempt the users to have all latest in their mobile phones. These services with varying tariff plans constitute about 7% of the operator revenue. It will certainly increase in future to have two digit shares in company’s revenue. Actual application: This document is mainly about a service for inbound roamers. When we store contacts, normally we do not store them in international formats. All contacts either personal or customer care contacts of the service provider will be in national or local formats. Say a person in roaming not aware of this makes a call to his customer care and og no doubt, the call will fail.

Mobile subscriber subscriber

HLR – America – Home

CC number – 4321, all local contacts (works)

Visits India

Roaming Nw

CC number – 4321, contacts in local format (fails) Inbound roamer

VLR – India –

In the above case, it is not the fault of the subscriber or the operator as we have different numbering schemes all over the world. If the customer is aware and has good technical knowledge, he may modify his US contact numbers into international format and dial whenever he roams outside. But this cannot be expected from all roamers. At this stage, the operator can assist the subscriber in possible completion of all calls dialled.

Possible Solution: Roamware (http://www.roamware.com/), one of the pioneers in providing VAS related to roaming found a solution. The application is called as SC/SCA (Short Code/Smart Call Assistant). Physically it is an intelligent node that behaves like HLR, database DB and also even MSC. When installed, all calls originated by the inbound in roamer is routed through this node. This node analyzes the dialled number, makes modifications if needed and returns result to the core network. The results are mostly valid and the MSC/VLR can route the calls accordingly. This is an additional feature; the operator can provide the in roamers. There may not be direct revenue but indirectly, the customers will be pleased to register into the equipped network, thereby increasing revenue indirecty.

Mobile subscriber subscriber

HLR – America – Home

CC number – 4321, all local contacts (works)

Visits India

Roaming Nw + Spl node

CC number – 4321, contacts in local format (fails) Inbound roamer

VLR – India –

How it is implemented: The intelligent node works like a SCP (Service Control Function) having a intelligent logic to serve in roamers. The prerequisites for the implementation are, 1. All incoming location update traffic is tapped by the intelligent node. 2.

All the outgoing call attempts by the in roamer should be routed to the node.

3. Connection between the node and SMSC should be available.

Key logic in implementation: The Intelligent node that handles the service is assigned with a Global Title address or GT. It is the address of this SCF node. Following things happen when an in roamer makes a location update. 1. As all the location update messages are tapped by the node, it constantly monitors the message flow. 2. When it finds any LU request from subscribers other than the MCC-

MNC of the HPLMN, it starts the transaction.

3. As mentioned earlier that the node acts as HLR at this step. After

the successful LU of the in roamer with his home network, the node sends an ISD (InsertSubscriberdata) message towards the MSC/VLR that currently has the subscriber. This message is similar to the ISD that is sent by the actual HLR of the subscriber towards the MSC/VLR from which the subscriber initiates LU request. Based on pre-paid or post-paid subscribers, two approaches are made, a) For post-paid subscribers, the ISD message sent will have O-CSI information for the subscriber. This O-CSI message is nothing but the SCF address of the node with a predefined service key. b) The SCF address injected will be in E.164 international format. c) As post-paid subscribers do not have any Camel Subscription Information (CSI), an additional address is injected. d) In case of pre-paid subscribers, they will have Camel Subscriber Information (CSI) for both originating and terminating depending on the home network. e) The actual O-CSI address of the subscribers is extracted

and with a predefined prefix, it is resent in ISD. The prefix used should be selected carefully. It should not resemble any globally available GT and should be supported by all switching vendors. Generally 899 is used as it is unused globally and no country has this country code. f) The service key for pre-paid subscriber remains unchanged during modification in OCSI data. 4. Now let us peep into sample call flow. The serving node also has a global database of short codes, numbering plans and important contact numbers of all the mobile networks in the world. This DB is updated from time to time for maximum service. 5. When an in roamer dials his network’s CC number, he will be dialling as it is without any modification. In normal case, the call will fail and result a notification announcement. 6. With support from the service node, the call is routed to this intelligent node.

7. The node then analyses the dialled number along with the subscriber numbering plan. Based on the subscriber’s network, it performs several changes in dialled number. a) If the number is short code of home network, it compares with the available DB and after modification of the short code into a valid number it returns it to the MSC that initiated the request. b) If the number is a mobile number, then based on the number series, the modification is made and returned. c) In case of confusion of the modification, the node sends a message to the subscriber mentioning the dialling format. Based on that, the subscriber can make modification and make outgoing calls. d) Thus when the number is resolved, reply will be corrected and if not able to resolve, a message will be sent to subscriber with notifications. Normal LU procedure

VLR

IN Box

MSC

Home HLR

After normal location update

VLR

Home HLR

MSC

ISD message with O-CSI

IN Box

Things to be defined in core network:

1. Each serving MSC/VLR should be configured with both the SCF

address (for post-paid) and prefixed SCF address (for pre-paid). 2. The GT should be routed to the serving IN node. 3. If the network has STPs, they should be also configured to handle the messages. 4. All outgoing call attempts by in roamer should be routed to the special node. Actually speaking, with the O-CSI configured all outgoing call attempts will be routed to the specified O-CSI SCF address. So it is enough to route the SCF address properly to the Special node. 5. The SMSC should be configured with the node with SMTP for transactions.

ISD sending procedure for post-paid case

VLR MSC

IN Box

Initial – no O-CSI After – O-CSI value with SCF address as +9198xxxxxxxx ( Specially allotted in operator’s address range)

ISD sending procedure for pre-paid case

VLR MSC

IN Box

Initial – O-CSI of home operator (+619xxxxxxx) After – O-CSI value with SCF address as 899619xxxxxxxx ( prefix 899+actual SCF address)

Call flow with the application

VLR

dials 1234 number

Final call routed to actual

MSC

Analysed, modified and returned as +61982345

1234

IN Box/DB

Features of the product: 1. The customer will be pleased to roam into the network as it assists him in dialling. 2. Ultimately the revenue increases for the customer. 3. As the DB is updated regularly in global basis, upcoming networks and latest short codes are also supported. 4. With enhanced GUI, the application can be easily controlled and manipulated.

For comments and questions, Ramanathan Sundaram [email protected] http://www.pdfcoke.com/kalaarangan

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