Business model for a SMS based VAS business

There are four major sources of revenue-generation for any business model based on SMS. The total market size is of over 300 million SMS per day in India which is projected to grow to over 1 billion SMS per day by 2012.

If we have to classify the segments of focus, there would be 4 categories of target customers for this business.

• Operator database & network
• Individuals
• Entertainment and media companies
• Enterprises


Operator database and network:

The operator network is one of the largest untapped source to this business. Take subscriber location, subscriber status (out of coverage, switched off), usage pattern, etc.—each of these can be utilized for increasing revenues directly or indirectly. For instance, an operator can offer missed call alert services to all subscribers for free and generate revenues through call back. In today’s’ fast paced life style and environment services such as bill payments, map & navigation, M-commerce transactions in addition to many other tools like gaming etc help any player in this segment to work with the operator.

Individuals:

Personal SMS, News, jokes, travel, and horoscope are the best example of such services. Individuals drive a lot of traffic; P2P messaging is a classic example of this.

Entertainment and media companies:

Entertainment and media companies are next only to individuals (subscribers) in terms of generating revenues. Major categories can be

• Print : India times, Indian express, all other news papers and magazines on subscription
• Web : Yahoo, MSN, Rediff, portals like India times, Indian express etc
• Electronic : Sony, Star, Aaj Tak, Zee, CNBC etc
• Radio/FM – Big FM, 98.3, Radio Mirchi etc
• Movie : Inox, PVR, Columbia, Warner Brothers,
• Records : Universal, T-series, Venus
• Distributors : Apparel, retail, health, fitness
• Exhibitors: Theatres, reality shows etc.
• Classifieds: include all other product and services
• Matrimonial services

Enterprises:

Enterprises having frequent transactions with a large customer base have a need to communicate with their customer base on these transactions. For example a net banking customer of HDFC bank would get a SMS when there is any amount debited from his or her account. There are several such alerts which work in tandem to the requirement in a particular business. This segment is growing very fast these days. This category would include all the banking and financial institutions, insurance companies, retail chains, hotels, airlines and so on….

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