Ringtone Industry Assignment | Section B | Group 10

The Indian mobile value added service (MVAS) market is estimated to reach $6.106 billion (Rs 33,280 crores) by 2013 at an estimated growth rate of 28 per cent. The market was at $4.771 billion (Rs 26,000 crores) in 2012 and it grew 32 per cent from $3.615 billion (Rs 19,700 crores) in 2011. This basically means that while the market size will continue to increase, its growth rate will mellow down. As of now, the MVAS market can be divided into two major categories — current MVAS that has a 63 per cent market share and emerging MVAS that accounts for the rest. The current MVAS category primarily consists of ringtones, caller ring back tunes and SMS services like live cricket updates, horoscope updates, voting, contests and wallpapers, etc. On the other hand, Emerging MVAS category consists of mobile apps and games that have enhanced content. These require higher data usage and need phones with an ability to download applications and process them, like smart phones and hence the low share of the MVAS market

Previously due to the lesser number of smart-phones the ringtone industry was primarily dependent on the telecom operators. There were very few options for the consumers and they would have to be dependent on the choices offered to them by their provider. But the scenario has changed. The number of smartphone users has increased and with the increased data connectivity options as well, the consumers have a wider and better array of choices to choose from.

The value chain of the ringtone industry can be depicted in the figure below

Since a significant amount of population still does not own a smartphone, any player which wants to enter this business should ensure that all the formats should be available for download. The value proposition which the company can offer is a singular provider of ringtones in all the available formats. The revenue model can be advertising which can be used by both the handset manufacturers as well as the service providers. Another revenue stream can be tie-ups with the telecom service providers through which it can offer download of ringtones through SMSes(for non smartphone users). One more source of revenue is to invite independent musicians to put up their track(ringtone) and charge a fee for the same. Royalty can be given to them each time someone downloads it. Not only will it be a source of revenue for them, it will also give them a better visibility. 

Since the mobile penetration is only going to increase, it is a good opportunity for companies to focus on the ringtone industry and bring some innovations as well. 

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Section B

Group 10

Zareena Ashraf

Sujay Kumar

Retika Bhat

Shyam Suresh

Raunak Sancheti

Sreekanth R

Vaisakh Krishnan