This would be a increase of 58 per cent from its current size of Rs 2,850 crore, according to a report jointly prepared by the Internet And Mobile Association of India and IMRB International.
A break up of the total market size reveals that P2P (person to person) SMS or text messaging, continues to dominate the industry with Rs 1,140 crore, followed by ringtones including caller ring back tones at Rs 1,026 crore, Person to Application and Application to Person at Rs 428 crore, games and data at Rs 171 crore and others (MMS etc) at Rs 86 crore.
Commenting on the study Subho Ray, president, IAMAI, said, "This is the first attempt to get an estimate of this market and we are hopeful that the MVAS industry with now get the required attention from the government and the industry."
The P2P SMS revenue is accrued completely to the telecom operators. The remaining MVAS revenues are distributed among content owners, developers and the telecom operators on a revenue sharing basis.
In the case of MVAS (except P2P SMS) the revenue sharing arrangement is heavily in favour of telecom operators. This model is significantly different from more developed markets such as China where typically the operators are entitled to 20-30 per cent only.
In the case of enterprise solution services the revenue share arrangement between operator and short code owner is typically 70 per cent and 30 per cent respectively.
Ray added that for the market to grow and come out with innovative solutions three issues must be set right at the outset: revenue sharing and schedule of payments which is currently heavily in favour of telecom operators; stable and long term enabling policies by the government; and intra industry issues such as IPR etc.
Without these, the industry will not have sustained growth.