Assessment of Mobile Value-Added Services (M-VAS)

Yati RodiatiStudent ID: 0832771

Module: Engineering ProjectSupervisor: Dr. Rebecca DeCoster

MSc of Engineering ManagementBRUNEL UNIVERSITY

Outline

Research Aim & Objectives M-VAS and Technology Adoption behind It M-VAS Business Model & Strategies M-VAS Customer Value Case Study and Market Survey on M-VAS Conclusion and Future Work

Research Aim

The overall aim of this research is to examine the business potential of mobile value-added services (M-VAS) based on the principles of customer interaction and mass customization.

Research Objectives

To evaluate the importance of business modeling for emerging telecoms services.

To determine the adoption of technologies and strategies behind M-VAS.

To identify the elements those affect customer value during the adoption of M-VAS.

What is Mobile VAS?

In mobile telecommunication industry, VAS is defined as services that are:

• not part of the basic voice offer.• allow the mobile operators to develop another

stream of revenue.

(Source: IAMAI and IMRB, 2006, p.15)

M-VAS Categorizes

Category Characteristic Example

Entertainment designed for mass appeal

Games, Caller Ring Back Tone (CRBT), music download.

Info characterized by the useful information

SMS Missed Call Alert (MCA), Stock Update, Location Based Service (LBS).

M-Commerce services involving monetary transaction using the mobile phone

M-banking and m-payment

The Technologies Adoption behind M-VAS

The evolution of mobile telecommunication networks The evolution of mobile devices The convergence of mobile telecommunication networks

and Internet

Mobile Internet

M-VAS Business Model(Value Chain Review)

M-VAS Strategies

Strategy Purposes/benefits

Strategic Partnership(Paavilainen, 2002; Sadeh 2002)

filling the gaps in the core competence among the players in value chain

Customer Value based mass customization(Sigala, 2006)

-differentiating services from competitors-boosting customer loyalty-inhibiting customers move to competitors

Mobile Portals(Paavilainen, 2002)

-a single “plate” for various “dishes”-improve customer loyalty

Case Study: Business Model of Caller Ring Back Tone (CRBT) Service

Indonesia

After US and Japan, Indonesia is the biggest CRBT market in the world.(Source: IFPI Digital Music Report, cited in Asia Pacific Digital Marketing Year Book 2008)

Case Study of CRBT Business Model (cont’d) (Service Fee and Revenue Sharing)

The revenue generated from the service fees is split among players in the value chain.

Most of the revenue goes to the mobile operator.

Customer Value and Its Importancein M-VAS

Value is described as a “trade-off” between overall benefits gained and sacrifices made by the customer (Olaru, Purchase and Peterson, 2008)

Recent research on M-VAS has found that customer value significantly:- impacts on consumers’ behavior intention and commitment (Pura, 2005)

- influences on customer satisfaction, and then, on loyalty intention (Lim, Widdows, Park, 2006)

M-VAS Customer Value

““Get” Value Dimensions (Benefits):Get” Value Dimensions (Benefits):- Functionality value- Social value- Emotional value- Freedom of choice value- Epistemic value (curiosity/novelty)

““Give” Value Dimensions (Sacrifices/Costs):Give” Value Dimensions (Sacrifices/Costs):- Monetary/price- Technical difficulties

(Sigala (2006) and Pura (2005))

Market Survey on M-VAS Customer Value

(Questionnaire)

Questionnaire Topic:Questionnaire Topic: Part 1:Part 1:

User Profile, M-VAS Usage, and mobile Social Networking (10 User Profile, M-VAS Usage, and mobile Social Networking (10 questions)questions)

Part 2: Customer Values Measurement:Part 2: Customer Values Measurement:““Get” Value Dimensions (22 questions)Get” Value Dimensions (22 questions)““Give” Value Dimensions (7 questions)Give” Value Dimensions (7 questions)(get and give value questions were developed based on Pura and Sigala’s (get and give value questions were developed based on Pura and Sigala’s framework)framework)

Questionnaire distribution: via emailQuestionnaire distribution: via emailCountry: IndonesiaCountry: Indonesia

Survey Result onRespondents’ Profile

Respondents’ gender: 21 males and 13 females

Age: 76.5% are 25-34 years old Occupation: government employees

(17.6%), private companies employees (41.2%), engineers (38.2%), and students (3%)

82.5% use 3G mobile phone The use of mobile phone mainly

refers to both personal/leisure and business purpose (75.6%).

Respondents' Group of Age (years old)

76.47%

0.00%8.82% 11.76%

2.94%0.00%0%

20%

40%

60%

80%

100%< 18

18 - 24

25 - 34

35 - 44

45 - 59

> 59

Survey Result onM-VAS Usage

91.2% respondents are using M-VAS.

Famous M-VAS: mobile chat, internet browsing, CRBT, LBS, and m-banking.

The most wanted or planned M-VAS to be purchased are mobile TV and video streaming.

Top 3 of M-VAS Used by Respondents

70.59%58.82%

41.18%

0%

20%

40%

60%

80%

Perc

enta

ge

Mobile Chat

Mobile Internet(brow sing)

CRBT

Survey Result onMobile Social Networking (SN)

94.2% join SN site (such as Facebook, Friendster, Linkedln, etc).

62.5% of them access SN via mobile phone.

Respondents' Way of Accessing the SN Sites

37.50%

6.25%

56.25%

0%

10%

20%

30%

40%

50%

60%

Perc

enta

ge

Via PC/laptop

Via mobile phone

Via both of them

Discussion and Implications ofthe Survey Findings (1)

High usage of mobile chatting and mobile internet reveals that mobile operators have to keep offering their customers attractive price plans for mobile internet access.

The customers’ high expectations on emerging services, such as mobile TV and video streaming, reveals that mobile operators still have to develop a viable business model for

these services.

Survey Result onM-VAS Customer Values Measurement

The most important benefit perceived by the respondents is functionality value, followed by freedom of choice, curiosity, emotional, and then social value.

Respondents perceive that the M-VAS are technically easy to use.

In term of monetary cost, respondents perceive the additional costs that they have to pay for using M-VAS.

Discussion and Implications ofthe Survey Findings (2)

Findings from this customer value measurements reveal that: all of the customer value dimensions are important for

customized mobile users customers can appreciate and are aware of the benefits and

costs in using a mobile service.

It means, the mobile operators must realize that the services that they create will only be accepted if they are delivering enhanced customer value in exchange for their perceived costs.

Conclusions

M-VAS is changing the role of most players across the telecom value chain, while also providing room for many new entrants, and requiring reconsideration of business model and partnership.

From the findings of CRBT case study (by interviewing the company’s VAS Senior Engineers), we have learnt:- the M-VAS business model approached by the company in terms of its value chain, roles of its players, revenue sharing, and the service fees.- the partnership strategy implemented by the company in MVAS.

In general, findings from market survey showed that customers perceive both “get” and “give” value dimensions. Specifically, for the customers, the most important “get” value is functionality value, and the least important is social value.

Future Work

Identify the 3G applications most suitable to be implemented in Indonesia based on customers’ behaviour and requirements

Develop a mass customisation model for mobile Social Networking sites.

References

Text Books: Paavilainen, J. (2002), Mobile Business Strategy: Understanding the

technologies and opportunities, Wireless Press, Great Britain. Sadeh, N. (2002), M-Commerce: Technologies, Services, and Business

Models, John Wiley & Sons, Inc., Canada

Journals: Olaru, D., Purchase, S., Peterson, N. (2008), “From customer value to

repurchase intentions and recommendations”, Journal of Business & Industrial Marketing, Vol. 23, No. 8, pp. 554-565

Pura, M., (2005), “Linking preceived value and loyalty in location-based mobile services”, Managing Service Quality, Vol. 15, No. 6, pp. 509-538

Sigala, M. (2006), “Mass customization implementation models and customer value in mobile phone services (preliminary findings from Greece)”, Managing Service Quality, Vol. 16, No. 4, pp. 395-420.

Lim, H., Widdows, R., Park, J. (2006), “M-loyalty: winning strategy for mobile carriers”, Journal of Consumer Marketing, Vol. 23, No. 4, pp. 208–218.

References (cont’d)

Other Free Resources (Internet Articles and White Paper):

Asia Digital Marketing Association (ADMA), Asia Pacific Digital Marketing Year Book 2008, http://www.asiadma.com (accessed March 1, 2009)

Internet and Mobile Association of India (IAMAI) and eTechnology Group@IMRB (2008), Mobile Value-Added Services in India, http://www.iamai.in (accessed February 28, 2009).

Vodafone Mobile Internet, http://mobileinternetdemos.vodafone.co.uk/ (accessed March 7, 2009)

UMTS Forum White Paper (October 2005), 3G/UMTS: Towards mobile broadband and personal Internet, http://www.umts-forum.org (accessed Feb 24, 2009).

Acknowledgments

I am grateful to:

My supervisor, Dr. Rebecca DeCoster, for her helpful and outstanding guidance.

Mr. Sumantri and Mr. Saptono, Senior VAS Engineers, Indonesia, for providing me with M-VAS data.