The VAS provider's relationship with the telco and VAS business model are some of the strategic levers available to manipulate. Placement of the VAS service with the telco is another option available. Factors affecting this decision / potential value added by the telco include:
A) On-deck placement: Activation/Trial of a service is 10-times higher for on-deck products/services than those that need to be downloaded
- Awareness of product/service: Initial awareness can occur on the web
- Seal-of-Quality implicit when the telco offers a product/service on their deck
- Customer ownership is a critical element affecting this decision. Needless to say, the one bringing the customer to the service owns the customer
- Consumer's awareness of the service, thru possibly other channels (e.g., internet)
- Marketing dollars to create awareness
- Is the value-added service (VAS), or part thereof, another company's branded product (e.g., Hollywood content)
- Who is best positioned during the user experience to proposition the user
- Information available to craft and introduce service activation request message
- Role played by the entity to increase success rate
E) Optimization of performance [of app/service] vis-a-vis network
- Telco is best positioned to do this
- There are third-parties who have deployed their infrastructure at telcos who can help do this as well
- Knowledge of device capabilities, network choice/performance. As in the above (E), the telco can offer this more easily. However, there are other service providers with their equipment at the telco, who could offer this service to you as well. Going with a third-party might help you have a more consistent interface across the many the telcos that you need to support.
- Credit rating a user and extending credit to them, especially in a Web 2.0 world can be an art, which affects the health of the business. More so, in the given economic environment
- Efficient itemized billing, especially for micro-payments, is critical
- Effective collections of micro-payments can be tricky in a mobile/telco world
- A telco might have a better view of the user across the various products/services that they consume, and across the telco's user base
- The VAS provider might have a better view of the product/service across multiple telcos, as well as, other communication channels / media
- Does the telco or the service provider have the ability to better sell related products and services
The telcos charge anywhere from 50% to nearly 70% of the revenues for providing some of the above value. The price charged by the telco to provide is value is the height of the wall that determines whether the you, the VAS provider, is in a garden or a jail.
Alternatively, a VAS provider could look at this list to tweak the offering to reduce the height of the wall. I have seen quite a few companies doing this, especially in today's more open mobile environment. There are quite a few tools and technologies available for each of the above factors (possible topic of another blog).
What are you noticing in your neck-of-the-woods? Dumb-pipe, intelligent-pipe...? Are there any other levers folks are using in the tussle between the telco and the VAS provider? Which of the above value-adds by the telco that you care for / can't do without?