VAS Revenues Drop After Short Code Change

ET reports that the change in short code policy has resulted in revenues for some VAS companies dropping by almost 50-70 percent, although. Webdunia President and COO Pankaj Jain says they’ve seen almost a 50 percent drop in number of SMS content requests, and short code service providers including IMI, Boungiorno, Yahoo, ACL and others have been impacted. VAS providers want the four digit short codes to be allowed for six to eight more months. More here.

The government policy had mandated that the digit 5 be added as a prefix for all short codes (for example, 3333 would become 53333). The drop in revenues has come primarily because the SIM Tool Kit (STK) has been made redundant. The STK is a menu in the mobile SIM-card which allows users to request content like astrology, news, sports, music etc. Thus any content requested via the SIM-toolkit will not get a response, costing VAS providers potential revenue. Since only new SIM cards can have the updated short codes, there doesn’t seem to be a solution in sight. Also, who would take on the cost of replacing old SIM cards, and why would the consumers get them replaced?

Interesting response from a government official: “An operator should have taken written consent before providing such services. The VAS providers did not take permission from us before allotting the codes to themselves.”