The Everest Research Institute has estimated that recurring costs can be reduced by 20-25% by using fewer suppliers. The key drivers of this are less effort by the buyer to manage supplier relationships and delivery plus better optimized resourcing from suppliers. Where a single supplier delivers all VAS applications as part of a coherent, well-packaged solution, the mobile operator will clearly lower costs in setting up and managing supplier relationships. As the relationship deepens and the VAS supplier and mobile operator marketing and technical teams collaborate more on service innovation, the mobile operator will be able to create more services that will differentiate the mobile brand in the market or take advantage of niche opportunities for subscriber acquisition and growth.
Selecting a single supplier isn’t the only way that costs can be managed. IBM recommends that CIOs work with suppliers that can provide creative pricing structures that enable essential business transformation to continue despite severely constrained IT budgets. Whether the mobile operator will prefer capex to be spread over a number of years or a licence model based on metrics that are in line with the operator’s own commercial and operational KPIs, the VAS supplier needs to offer creative and flexible commercial models that allow the mobile operator to manage costs and the timing of the those costs.
Jinny ViO – VAS-in-One – allows the mobile operator to source all VAS from a single provider. From next generation messaging and call completion solutions to revenue generating applications such as Ring Back Tone and configuration management through OTA device management, Jinny ViO provides the operator with the complete VAS in a Box solution. Built on a standard platform, Jinny ViO easily delivers all VAS applications to the mobile operator and allows the mobile operator to deal with a single supplier for VAS. Using a single supplier offers two major benefits for the operator. Firstly, the operator saves up to 25% on opex by dealing with a single vendor and secondly, by working closely with Jinny to develop VAS applications that give real competitive advantage in the market, the mobile operator can drive growth in subscriber numbers and in the breadth of services that the subscriber uses with the operator.
Further, as an experienced provider of VAS applications to hosting providers, MVNEs and MVNOs, government agencies and mobile operators, Jinny has a flexible and creative approach to pricing that can meet the needs of the operator to manage costs. This approach can make a significant difference to a mobile operator in the current market environment where the operator is experiencing pressure on ARPU, rising customer acquisition and retention costs and rising churn.
In February, Telefonica announced their 2010 results and while revenues rose 7% between 2009 and 2010, operating expenses rose 14%. This cost pressure is being felt by all operators and any innovation that a VAS provider can perform to alleviate cost will help the operator deliver value to its shareholders. Jinny ViO allows the operator to source all VAS applications from a single vendor and to structure the cost model according to its needs. By investing in ViO today, the mobile operator will not only be taking advantage of an innovative portfolio of next generation VAS applications but will also be managing costs for today and for tomorrow.
Author: Cathal O’Toole, Jinny Senior Product Manager
 The Hidden Costs and Complexity of Managing Multiple ADM Suppliers, Eric Simonson, Everest Research Institute
 Doing more with even less: today and tomorrow, IBM
 2010 Annual Report, Telefonica Group