An Overview of Indian VAS Industry: Regulatory Perspective

The Telecom Regulatory environment of India seems to be promising after the approval of NTP 2012 by the Union Cabinet. One can look at things afresh regarding Indian telecom sector which is one of the fastest growing markets at an expected growth rate of 10.6%1 & contributing to around 3%2 of Indian GDP. With a huge subscriber base of around 930 million3, unprecedented growth in teledensity & fast mobile penetration, India Inc presents itself as one of the lucrative options for investment.

However the flip side of this is the complex regulatory framework, policy paralysis, mismanagement of funds & lack of government initiatives. This can be substantiated by the facts like cancellation of 122 2G licenses, fixation of reserve price in 1800 MHz band at a staggering amount of 14,000 crores for a mere 5MHz block, uncertain future of the numerous foreign players like Telenor, unjustified revenue sharing model towards the VAS players, uncertain roaming agreements & inefficient allocation of spectrum. The end customers are the only stakeholders in the entire telecom ecosystem who have to bear the brunt as the cost gets ultimately passed on to them.

VAS industry is one of the key areas facing the unending loop of uncertainties & lack of recognition by the government. This paper primarily deals with the critical analysis of its current scenario, bottlenecks & their impact followed by recommendations & underlying future opportunities to revive its growth.