<b>Letters:</b> Focus on the core

This refers to ‘Can telcos become media companies?’, February 10. As part of my job where I act as a bridge between the telcos and media houses, I have developed some significant insights into this.

You are right in saying that the revenue share splits are skewed in favour of telcos in India. However, this is improving. Also, it has a lot to do with the focus on the VAS business by the operators. They are currently very busy in expanding their network and focusing on their core business of acquiring customers. VAS is a very small percentage of their revenue. So there is not enough focus on this piece of business. Unless this happens the overall business will take time to take-off the way a media company expects it to. 
 

The traditional VAS business has been quite unlike the traditional media business with most of it being per download revenues. A true media business will be one where the telcos behave more like a carriage pipe for various channels for things like mobile TV on the one hand, and provide the reach for the advertising model of business on the other. This will happen, but will take time to evolve. 
 

There are a number of media companies which are more aggressively exploring multiple ways of working together. Coming up with ideas pertaining to mobile advertising will make this more workable. Even the media houses have stopped looking at ringtones as a possible means of revenue generation since this is quite low for individual companies. This is more so because of the fact that the supplier side for this content is highly fragmented. And till now there has been no single piece or type of content which has managed to gather the numbers with some exceptions, like the KBC contest — but these are too few and far between. 
 

You are absolutely right in saying that carriage is not the big deal and content is the primary driver. Real success will come when both the actors focus on their core : Telcos on carriage and media houses on content-creation. 

One of the best examples of this kind of business, where telcos and media overlap, is seen in Japan, where the iMode standardises the services for all content-creators. This is bound to happen in all markets. It is only a matter of time.

Some progress has already been made on these fronts. Also, as far as the revenue share is concerned, this has been gradually improving for the service providers. At least the trends are encouraging.

 

Amit Sinha, via email

 

Readers should write to: 
The Editor, Business Standard,
 Nehru House,
 4, Bahadur Shah Zafar Marg, 
New Delhi 110 002, Fax: (011) 23720201; 
letters@bsmail.in