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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 250 million


Avg. ARPU Rs 250 / $6
Industry Revenue $ 1.5 billion per
month
Annual Revenue $ 20 billion
Market Cap $ 120 billion
VAS Providers $ 0.18 billion
Revenue
VASPs Market Cap $ 1.5 billion

ARPU Split of Rs 250


Voice + Rentals 90% Rs 225 Includes Rentals, Activation Charges, etc.
P2P SMS (primarily) 5% Rs 12.50 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
Revenue for VASPs 17% of the Rs 2 Rs 750 cr cr / $180 million annualised
5% above revenue

VAS Revenues by Category

Categor Penetratio Numbers Revenue ARPU Total VAS Annual Key


y n (million) (Rs / mo) Revenue Revenue VAS Players
(Rs / mo) (Rs / mo) Revenue
P2P SMS 35% 80 m Rs 30 Rs 11 Rs 250 cr Rs 3,500
cr
CRBT 25% 65 m Rs 25 Rs 5.50 Rs 165 cr Rs 30 cr Rs 350 cr OnMobile

BhartiTele

Hungama
IVR / 15% 30 m Rs 20 Rs 3 Rs 60 cr Rs 10 cr Rs 125 cr OnMobile
Voice
Portal One97

Cellebrum
Downloa 10% 25 m Rs 10 Re 1 Rs 25 cr Rs 6 cr Rs 75 cr Hungama
ds
(Rington
es,
Wallpap
ers,
Games)
SMS 5% 15 m Rs 20 Re 1 Rs 30 cr Rs 6 cr Rs 75 cr One97
Subs.
P2A 15% 30 m Rs 6 Re 1 Rs 30 cr Rs 6 cr Rs 75 cr IndiaTimes
SMS
Misc Re 1 Rs 50 cr Rs 5 cr Rs 50 cr
TOTAL 250 m Rs 12.50 Rs 360 cr Rs 63 cr Rs 750 cr
(ex-P2P
SMS)

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-vas-


industry/

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 HLR – America – Home


subscriber
CC number – 4321, all local contacts (works)

Visits India

Roaming
Nw

CC number – 4321, contacts in local format (fails) VLR – India –


Inbound roamer

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 HLR – America – Home
subscriber

CC number – 4321, all local contacts (works)

Visits India

Roaming Nw + Spl
node

CC number – 4321, contacts in local format (fails) VLR – India –


Inbound roamer

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 Home
IN Box
MSC HLR

After normal location update

VLR Home
MSC HLR

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 MSC Final call routed to actual
number

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

xpotentialram@gmail.com

http://www.scribd.com/kalaarangan

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