Value Added Service (VAS) by mobile phones
Saturday, 13 September 2008
Ahmed Tareq Rashid
In the last decade, mobile telecommunication networks have grown rapidly in Bangladesh. As of July 2008, there are approximately 44 million subscribers of mobile phones, which roughly represent a penetration rate of 30 per cent. At this juncture, there are two potential areas of growth in mobile telecom sector. First, the penetration rate is likely to increase further, although it is believed that the speed of growth in the next phase will be relatively slower. Second, mobile phone services are increasingly going beyond the basic function of voice communication. Indeed, mobile phones offer much more than facilitating conversations among people. Mobile operators as well as users are increasingly aware of the services to get the most out of the technology.
The provision of services beyond voice, often known as "value added services" (VAS), is at a nascent stage in Bangladesh. VAS includes a number of services including SMS, ring tones, games, MMS, voice chat, etc. Mobile operators see VAS as having a great market potential and possibly a major revenue source in the coming years. According to one estimate, the VAS is growing at 35 per cent every year. Currently, the VAS market is dominated by entertainment services like ring tones- which is extremely popular among the younger generation.
In addition to entertainment, there are other critical areas where VAS can significantly contribute to the socio-economic development of the country. The health sector is a good example. In Bangladesh, there is an acute shortage of qualified doctors in rural areas. While around 70 per cent of the total population lives in rural areas, 75 per cent of the qualified physicians practise in urban areas. Due to instant availability and connectivity of the technology, there is enormous scope for mobile services in rural health care. Although evidence of the technology's usefulness is still in early stages, demonstration projects in the Philippines, Uganda and South Africa point to the fact that the under-served could have access to quality health services and information through mobiles.
Even in Bangladesh, many initiatives have already been undertaken. For instance, Grameenphone's HealthLine Service, implemented in cooperation with the Telemedicine Reference Center Limited, is a 24-hour medical call centre manned by licensed physicians. HealthLine provides services like medical consultation, doctor and medical facility information, drug information, interpretation of laboratory test reports, and emergency support information. According to Grameenphone, HealthLine is presently providing medical advice to about 10,000 callers per day.
Another area where mobiles can have significant impact is banking. With just a few thousand bank branches throughout the country, the banking services are extremely inadequate. Currently, there exists an informal system of money transfer, which is widely used by many migrant workers in urban areas to send remittances to rural areas. The government is now considering m-banking that will integrate money transfer through mobiles with the existing banking system. In this system, mobile operators' outlets will be used as payment centres with banks providing cash services. As one analyst argues, "the entire mobile banking strategy is based on the essence of bringing the unbanked/ informal funds flow into the formal sector and make it countable within our GDP."
The benefits of mobile phone have also reached the realms of politics and governance. In the city corporation and municipality elections held recently, voters were able to know the locations of their designated polling stations by texting their national ID numbers. This facility, provided to 1.3 million voters, was set up by the Election Commission in association with Tele Talk Bangladesh Ltd., the state-run mobile phone company. According to reports, the service got good response from the public and could be used in the local government and parliamentary elections as well.
In addition, there are several other services that are currently being offered by different operators. Grameenphone's CellBazaar, an electronic marketplace accessible via SMS, WAP and internet, was set up to provide people with timely market information. Through CellBazaar, buyers and sellers can have the choice of goods on offer, including furniture, household appliances, cars, houses, etc. Another initiative of Grameenphone lets its customers know about job offers that are posted in the country's largest job portal, bdjobs.com.
While the potential for mobile phones beyond voice is obvious, there are some critical issues that need to be highlighted. First, the mobile operators need to think of VAS as a commodity service that will gain from being low cost - which will ensure greater volume. Currently, many VAS services are very expensive compared to voice and, therefore, affordable to only a few users. In addition, many services are based on text, which means that a significant number of people in the country will be unable to access them. Therefore, there is a need for providing services in the local language or ensuring Interactive voice response (IVR) facilities.
Second, the role of policy-makers is critical in introducing the different VAS innovations. Policy-makers must understand that for Bangladesh to be competitive at the global level and for society to benefit from better information flows, mobile phones are the key intermediaries, at least for the short to medium term. Therefore, there should be incentives to create mobile application-services and to roll them out. On the other hand, disincentives like taxes must be eliminated as much as possible. In some cases, tough regulations are necessary to ensure proper use of VAS. For example, in the case of m-banking, forward-looking policies are needed that will facilitate m-banking; at the same time, mechanisms to prevent illegal activities like money laundering must also be created.
Finally, there is a need for rigorous research to assess the role of mobiles/VAS in the socio-economic development. There are hardly any data available for the extent of use of VAS by the general users. Information about who are using what kind of services as well as their satisfaction levels is vital for policy-making purposes.
The writer resides in Ottawa, Canada. He can be reached at Email: tareq.rashid@gmail.com
In the last decade, mobile telecommunication networks have grown rapidly in Bangladesh. As of July 2008, there are approximately 44 million subscribers of mobile phones, which roughly represent a penetration rate of 30 per cent. At this juncture, there are two potential areas of growth in mobile telecom sector. First, the penetration rate is likely to increase further, although it is believed that the speed of growth in the next phase will be relatively slower. Second, mobile phone services are increasingly going beyond the basic function of voice communication. Indeed, mobile phones offer much more than facilitating conversations among people. Mobile operators as well as users are increasingly aware of the services to get the most out of the technology.
The provision of services beyond voice, often known as "value added services" (VAS), is at a nascent stage in Bangladesh. VAS includes a number of services including SMS, ring tones, games, MMS, voice chat, etc. Mobile operators see VAS as having a great market potential and possibly a major revenue source in the coming years. According to one estimate, the VAS is growing at 35 per cent every year. Currently, the VAS market is dominated by entertainment services like ring tones- which is extremely popular among the younger generation.
In addition to entertainment, there are other critical areas where VAS can significantly contribute to the socio-economic development of the country. The health sector is a good example. In Bangladesh, there is an acute shortage of qualified doctors in rural areas. While around 70 per cent of the total population lives in rural areas, 75 per cent of the qualified physicians practise in urban areas. Due to instant availability and connectivity of the technology, there is enormous scope for mobile services in rural health care. Although evidence of the technology's usefulness is still in early stages, demonstration projects in the Philippines, Uganda and South Africa point to the fact that the under-served could have access to quality health services and information through mobiles.
Even in Bangladesh, many initiatives have already been undertaken. For instance, Grameenphone's HealthLine Service, implemented in cooperation with the Telemedicine Reference Center Limited, is a 24-hour medical call centre manned by licensed physicians. HealthLine provides services like medical consultation, doctor and medical facility information, drug information, interpretation of laboratory test reports, and emergency support information. According to Grameenphone, HealthLine is presently providing medical advice to about 10,000 callers per day.
Another area where mobiles can have significant impact is banking. With just a few thousand bank branches throughout the country, the banking services are extremely inadequate. Currently, there exists an informal system of money transfer, which is widely used by many migrant workers in urban areas to send remittances to rural areas. The government is now considering m-banking that will integrate money transfer through mobiles with the existing banking system. In this system, mobile operators' outlets will be used as payment centres with banks providing cash services. As one analyst argues, "the entire mobile banking strategy is based on the essence of bringing the unbanked/ informal funds flow into the formal sector and make it countable within our GDP."
The benefits of mobile phone have also reached the realms of politics and governance. In the city corporation and municipality elections held recently, voters were able to know the locations of their designated polling stations by texting their national ID numbers. This facility, provided to 1.3 million voters, was set up by the Election Commission in association with Tele Talk Bangladesh Ltd., the state-run mobile phone company. According to reports, the service got good response from the public and could be used in the local government and parliamentary elections as well.
In addition, there are several other services that are currently being offered by different operators. Grameenphone's CellBazaar, an electronic marketplace accessible via SMS, WAP and internet, was set up to provide people with timely market information. Through CellBazaar, buyers and sellers can have the choice of goods on offer, including furniture, household appliances, cars, houses, etc. Another initiative of Grameenphone lets its customers know about job offers that are posted in the country's largest job portal, bdjobs.com.
While the potential for mobile phones beyond voice is obvious, there are some critical issues that need to be highlighted. First, the mobile operators need to think of VAS as a commodity service that will gain from being low cost - which will ensure greater volume. Currently, many VAS services are very expensive compared to voice and, therefore, affordable to only a few users. In addition, many services are based on text, which means that a significant number of people in the country will be unable to access them. Therefore, there is a need for providing services in the local language or ensuring Interactive voice response (IVR) facilities.
Second, the role of policy-makers is critical in introducing the different VAS innovations. Policy-makers must understand that for Bangladesh to be competitive at the global level and for society to benefit from better information flows, mobile phones are the key intermediaries, at least for the short to medium term. Therefore, there should be incentives to create mobile application-services and to roll them out. On the other hand, disincentives like taxes must be eliminated as much as possible. In some cases, tough regulations are necessary to ensure proper use of VAS. For example, in the case of m-banking, forward-looking policies are needed that will facilitate m-banking; at the same time, mechanisms to prevent illegal activities like money laundering must also be created.
Finally, there is a need for rigorous research to assess the role of mobiles/VAS in the socio-economic development. There are hardly any data available for the extent of use of VAS by the general users. Information about who are using what kind of services as well as their satisfaction levels is vital for policy-making purposes.
The writer resides in Ottawa, Canada. He can be reached at Email: tareq.rashid@gmail.com