Value-added Service Characteristics
All VAS share the same characteristics:
1. Not a form of basic service but rather adds value total service offering
2. Stands alone in terms of profitability and/or stimulates incremental
demand for core service(s)
3. Can sometimes stand alone operationally
4. Does not cannibalize basic service unless clearly favorable
5. Can be an add-on to basic service, and as such, may be sold at a
premium price
6. May provide operational and/or administrative synergy between or
among other services – not merely for diversification
Every VAS will demonstrate one or more of the above characteristics.
Furthermore, a value-added service will never stand in stark contrast to any of
the above characteristics.
VAS also have a certain time dimension associated with them. Subjectively
speaking, a value-added service today becomes a basic service when it
becomes sufficiently common place and widely deployed to no longer provide
substantive differentiation on a relative basis.
Relationship to other Services
There are two types of VAS. The first service type are those value-added
services that stand alone from an operational perspective. These types of
services need not be coupled with other services, but they can be. Many non-
voice services fall into this category. They are often provided as an optional
service along with voice services, but they could be offered and used by
themselves without the voice service. For example, SMS could be offered and
used as a service without voice calling.
The second, and arguably more numerous and important type of VAS, are
those services that do not stand-alone. Instead, this category adds value to
existing services. While it seems implicit in the definition of value-added, this
is an important principle that makes value-added services stand apart from
other services.
Value-added Services Examples
There are many services that could be considered "value-added". For
discussion purposes, we will a few of these services below.
Push-to-Talk
Push-to-Talk (PTT) is a VAS because it:
Drives additional revenue to the wireless carrier, but doe not cannibalize
existing revenues
Provides differentiated service offerings
May be packaged with various other VAS such as MIM to provide even
greater value
Call Management Services
This type of service can not stand alone as a service. Instead, it adds value to
a core service by allowing the subscriber to manage incoming and/or outgoing
calls. For example, value-added service interactions occur when the
subscriber receives a call. Many call management services allow the
subscriber to establish when, where, and under what circumstances they may
be reached by calling parties. This provides value to the core service - voice
communications - by way of increased control and flexibility.
Depending on the specific commercial situation, this value-added service
could be offered as either a premium service (at a premium price) or be
bundled with other the core service offering. The benefit of bundling would be
to provide a differentiated core service and/or to increase the use of the core
service.
Location Sensitive Billing
This is another example of a service that can not stand-alone. Instead,
location sensitive billing (LSB) adds value to the core service by location
enabling the core service. Location sensitive billing can be used in conjunction
with post-paid, prepaid, and/or VPN based mobile communications services to
establish zones for which differentiated billing treatment may be applied. For
example, a "home zone", "work zone", and "premium price zone" could be
established to allow an operator to offer differentiated service to its customers.
This is viewed as a value-added service to both the customer and the mobile
operator. The customer benefits from LSB through his ability to use the mobile
phone at preferred rates based on location. The wireless carrier benefits from
incremental revenues derived from additional usage and from premium
charge zones where there is already high demand and perhaps overly taxed
system capacity. While the issue of potential cannibalization of existing
service arises, customer behavior and studies indicate a net benefit derived
from overall increased usage and revenues.
Taken together, call management services and LSB also depict characteristic
number six, operational synergy. Call management services add value in
terms of providing the user options depending on location. For example, the
user may want to receive certain calls at the home zone, but not at work, and
perhaps receive only urgent calls when traveling or on vacation. LSB provides
the additional synergistic benefit of location based billing when the user is in
those various locations.
Mobile Data Services
This is an example of a value-added service that does stand-alone. Mobile
data services are considered value-added because they depict many of the
characteristics discussed earlier.
Does not cannibalize existing services
Can be offered at a premium price
Provides differentiation
Can provide synergy with basic service
Largely due to the current state of mobile communications evolution, many
non-voice services can be considered to be value-added. However, the extent
to which additional value-added services can be layered on top of mobile data
services will determine the limit of their value. For example, many non-voice
services will have even greater value through personalization. Two of the
most significant ways to personalize wireless services are through location
enabling them and making them personal profile driven.
Mobile data services are utilized to obtain information, content, and to perform
transactions. All of these activities are more meaningful if they are tailored to
the individual. Location based services add value by way of putting the data
into a location context for the user. Personal profiles further enhance the value
through Personalization.