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Operators are increasingly turning to an ever-expanding base
of Value Added Applications Suppliers (VAAS) to deliver Total
Consumer Offerings (TCO) and sustain and grow ARPU.
The challenge of managing VAAS
As of now, there are over 100 VAAS operating in the country,
providing 400 applications to operators. Clearly managing
this vast network of suppliers is proving to be a Herculean
task for mobile operators, who often have to dedicate special
manpower to monitor and manage these relationships and technically
validate their new applications. Most operators are challenged
by the nitty-gritty of negotiating and fixing revenue share
for each VAAS and each application, managing service agreements
and their life cycles, amending agreements as applications
increase and providing network connectivity and system management
for linking VAAS servers or hosting content. Issues such as
tracking transaction data for billing reconciliation and settling
disputes arising out of mismatches in such transactions, marketing
VAS products and fixing tariff for these services are also
greatly stretching the resources of mobile operators.
VAAS management outsourcing is the way to go
While operators should continue to directly handle their
Voice and SMS services (which are a core part of the business
today), they are advised to outsource non-core areas including
the tracking of transaction data for billing between the operator
and VAAS, creation of transaction rating based tariff plans
for applications, management reporting, etc. By outsourcing
VAAS interaction and relationship management, industry analysts
believe, mobile operators can greatly improve their operational
efficiencies, productivity and profitability.
Let us consider a scenario where the Service Provider has
a system which has a centralized SMSC which offers VAS services
to its subscribers. All the circles of the service provider
are linked to this central SMSC in order to cater to the local
subscriber requests.
VAAS have their content collocated at the service provider's
site or have a dedicated link from their content server, located
at off-site, to the service provider's network. In some cases,
content is also collocated at different sites of the service
provider in the various parts of the country where it is present.
Under these circumstsances, the service provider can meet
the subscriber request locally.
Every application supplied by VAAS is assigned a unique
identification number known as short code. The short code
is the primary parameter for transaction reconciliation and
revenue share between the service provider and VAAS.
The transactions are reconciled and rated, after considering
the tariffs applicable and revenue share agreement, for each
of the unique short code for each VAAS. The VAAS billing is
linked to Short Code, Tariff assigned for the service and
associated revenue share between the Service Provider and
VAAS, While the CDR for subscriber billing links the Service
requested with Service Provider's Tariff.
When a subscriber requests for a VAS download, the request
is forwarded to the central SMSC by the respective circle
network.
Once the subscriber selects a service with a unique short
code assigned to it, the network gateway receives the request
from the central SMSC. Network gateway contacts the desired
VAAS Content Server is contacted by the network gateway and
the request for a download is made.
VAAS maintains comprehensive transaction record of requests
made to its content server by the service provider's SMSC
and requests serviced by its content server back to service
provider's SMSC.
Once the central SMSC receives the downloaded content serving
the request of subscriber, it is forwarded to respective circle
MSC/SMSC for further delivery to subscriber.
There is no mechanism available with the service provider
at the central SMSC to record the number of transactions per
short code. Such records are collated at the respective circles.
There is a mismatch in data collated by VAAS database server
and that collected at respective circles of the service provider.
This leads to "Transaction Reconciliation" mismatch
and payments to VAAS get delayed. This mismatch also results
in "Revenue Loss".
This may happen as the subscriber may have switched off his/her
handset or gone out of coverage area or moved to a roaming
location, whereby, the content could not be delivered to the
handset in three attempts over a 24-hour period. Consequently,
the service provider cannot charge the subscriber for the
service, while the VAAS has performed its service.
The mismatch is more pronounced in case of "Pre-Paid"
subscribers. The requested content/application will not be
delivered to pre-paid subscribers with zero balance or those
under roaming.
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