Milind Pathak

 
Challenges of monetization
 
In predominantly rural, low-income, price-sensitive markets, across industry verticals, successful services delivery models have essentially relied on scale to compensate for low margins per unit.
 
The rural population constitutes the dominant demographic in developing markets in South Asia but largely inhabit the margins of the digital economy. In emerging markets, the phenomenal adoption of the mobile phone makes it an important channel to deliver crucial services to the digital underclass. Whilst basic network coverage of elementary services including voice and SMS is largely available and growing, to fully leverage the network’s value, service providers need to consider moving beyond basic communication functions and develop and drive adoption of services that enhance lifestyles and improve livelihoods of customers.
 
The successful delivery of value added services (VAS) is dependent on the ability to optimally balance the cost and the returns generated per service. In predominantly rural, low-income, price-sensitive markets, across industry verticals, successful services delivery models have essentially relied on scale to compensate for low margins per unit. This is particularly true of the operator’s calling business, which contributes between 70% and 80% of revenues. However, unlike call minutes, value added services by their very nature are not homogenous. Services that appeal to a young affluent urban resident may have zero appeal with a resident in the remote rural hinterland, although the two are active mobile telephony users.
Classic VAS infrastructure is not optimized to cost-efficiently mobilize services for hundreds of niche segments. To cite a simple example: services providers need to store multiple content assets for text, audio and video services but the store for each content asset is managed separately. This is akin to having a separate storehouse for each stock-keeping unit in a supermarket. Another case in point is the ability to offer services across channels and devices. The lack of shared functionality escalates costs, stymies innovation and results in a relative small portfolio of “me too” services, or those that cater to the lowest common denominator.
 
As the intermediaries between service providers and end-users, operators need to accordingly remodel their service architecture to support mass services production and delivery. The infrastructure must make it economically viable for operators to embrace an open-sourcing model and expose and share common functionality. For example: provisioning, subscriber profiling, charging and billing, call and messaging with a community of service developers. The cost benefits realized could be as high as 50% and would be critical to democratizing innovation. For instance, an NGO working on women’s health issues would find it viable to harness the operator’s services creation and delivery infrastructure to disseminate services among a wider audience.
 
As a company, Comviva’s mission is to leverage the mobile to enhance livelihood and lifestyles of people. Comviva’s service delivery platforms address current gaps in service delivery infrastructure and are designed to bring the mobile revolution to the masses. And, I would be very excited to value-add or catalyse any such idea or activities that would help reach the rural masses and monetise the opportunity, complemented with social impact.
 
Milind Pathak
heads the SAARC business
and the Mobile Content Solutions business unit at Comviva.