Technology Salon

Washington DC

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a discussion at the intersection of technology and development

Why VAS Vendors Are Key to M4D Solutions


The “How to Work with VAS Vendors for M4D Impact?”, Technology Salon featured a lively discussion with Vijay Sai Pratap, Julia Burchell, and Kristen Roggemann. We focused on value-added service (VAS) vendors, the third-party organizations who create, integrate, launch, and maintain mobile services outside of ‘core’ Mobile Network Operator services: voice, SMS, and data.

Participants debated several important questions regarding VAS vendors, and while they, unsurprisingly, did not always agree, they raised critical points. Here are my big three takeaways:

1. VAS Vendors aren’t just the “business middlemen.”

As worded by a participant at the Salon, there are people in the international development community who view VAS Vendors as business middlemen, profiting greatly from services that could arguably be done entirely by development actors or the MNOs. However, as asserted in the The Role of VAS Vendors in M4D report, the mobile development community should not be so quick to discount the role VAS Vendors can play in M4D solutions. Relationships with VAS Vendors actually have the potential to benefit the development community through:

  • Greater efficiencies, due to saving time and delegation;
  • Higher quality of service and more people using those services, due to a strong design
    and marketing;
  • Improved sustainability and impact, due to commercial knowledge and experience.

That being said, VAS Vendors can make a substantial profit for their work, a fact that some of the participants did not support – especially considering that MNOs often have the ability to produce their own VAS, and development actors often want to see concessions or discounts due to their social mission. Nevertheless, other participants pointed out that the VAS Vendors do not reinvent the wheel, rather they contribute their expertise and experience, in a way that also benefits MNOs and international organizations.

2. VAS Vendors can bring sexy back.

One topic of the discussion revolved around the idea of localization and appealing to users. VAS Vendors understand the local mobile ecosystem and know what the consumers want and are willing to pay for.

Ring back tones are a great example. Customers pay to have songs played when someone calls them, to entertain the caller before the customer is able to answer the call. This is a pay service, and yet in some markets, VAS Vendors have found ways for social development organizations to create and popularize health messages as the ring back tone.

With innovations like these, VAS Vendors have the ability to increase reach and sustainability, two qualities that are essential for successful for development programs. Sure, these services might cost a bit more, but the ability to localize and be relevant is a key VAS Vendor skill that’s especially important as ICT4D continues to shift toward “design with the user in mind.”

3. VAS Vendors aren’t the panacea for the M4D community.

Despite the fact that partnerships between VAS Vendors and the M4D community can bring about mutual benefits, VAS Vendors are not perfect for every single situation. In fact, no issue in development has a single intervention that works perfectly and completely.

As one of the participants of the Salon said, VAS Vendors are just another option for the international development community and we should determine what options work best for us. The The Role of VAS Vendors in M4D report examines eight different business models to work with VAS Vendors and in our discussion, there were two times when VAS Vendors were key:

  1. When there are multiple MNOs, none with majority market share, and a VAS Vendor can access them all quickly, saving time in coordination and execution.
  2. Where there is a dominant MNO that is very difficult to work with directly outside of a VAS Vendor-mediated relationship

So some organizations may choose VAS Vendors, some may choose to work with MNO APIs directly, and some may choose to build their own VAS. The right choice, as always, depends on the mobile ecosystem context in which you are working.

By Tamara Chin Loy, MAMA Global.

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