Mobile VAS Click to edit Master

in Growth Markets title

Current trends and requirements to enable
style
mass market adoption of services

Click
Shailendra to edit Master
Pandey, Seniorsubtitle style
Analyst
Mobile Content & Applications
shailendra.pandey@informa.com

11/09/2009
04/08/2010
Informa 2009 Industry Survey:
Q. What will be the key topics, countries
or companies in 2010?
France Telecom is 3x bigger than Google
Vodafone is 66x the size of Facebook

Online versus mobile operator 2009 revenues ($bn)

80

70.1
70 66.5

60

50

40

30
23.6

20

10

1
0
Google Facebook France Telecom Vodafone

04/08/2010
 Global Mobile VAS Market
Informa Telecoms & Media estimates that the Global mobile VAS market was worth
US$200 billion in 2009. Over the next five years, the market is expected to grow at a
CAGR of 14.2% and generate revenues of around US$340 billion in 2014.

Global Mobile VAS Revenues, 2008-2014

(US$ bil.) 2008 2009 2010 2011 2012 2013 2014 CAGR (%)
Global Total 175.2 200.8 224.1 249.0 276.8 307.0 340.8 14.2%
Source: Informa Telecoms & Media
160

140

120
Asia Pac
100 North America
Western Europe
80
Eastern Europe
60 Latin America

40 Middle East
Africa
20

0
2008 2009 2010 2011 2012 2013 2014

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Emerging markets are driving growth
The emerging markets offer a strong growth potential and investment
opportunities for the telecoms industry. 15 emerging markets now together
account for more mobile subscriptions than rest of the world and this trend
will continue over the next five years.

15 high-growth mobile markets: China, India, Indonesia, South Africa, Nigeria, Egypt, Turkey,
Israel, Saudi Arabia, Brazil, Mexico, Argentina, Russia, Poland and the Ukraine.

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Emerging markets are also accounting for growing
share of Mobile VAS revenues
It is estimated that these 15 markets between them generated around 28%
of the global mobile VAS revenues in 2009, and the revenue contribution by
these high-growth markets will continue to increase over the next five years.
In 2014, these 15 markets are expected to account for close to 36% of the
global mobile VAS revenues.

Global mobile VAS revenues, the 15 high-growth markets vs. the rest of the world, 2008-2014

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 Global Mobile VAS Market, 2009 & 2014

US$200 billion, 2009 US$340 billion, 2014

1.8% 7.3%

Mobile messaging

33.7% Mobile entertainment 40.9%

53.2% Mobile Internet 39.8%

11.3% Others
11.9%

Source: Informa Telecoms & Media

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 Mobile VAS Market 2009
5.9%
7.2%
5.4% 9.5%
Mobile messaging
46.7%
32.9%
Mobile entertainment
Mobile Internet
79.2
% 13.2% Others

Middle East – US$7 billion

Asia Pacific – US$83 billion
2.0% 2.8% 3.3%

3.5% 14.0%
20.8%
33.1%

10.1% 53.0%
66.2%
80.5%
10.6%

Africa – US$4.5 billion Latin America – US$10.8 billion Eastern Europe – US$15.1 billion
Source: Informa Telecoms & Media
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 More data traffic, but each MB brings in
progressively less revenue
Traffic and revenue/GB trend for an Asian operator
7,000 1,800
Revenue per Gigabyte (US$)
HSPA and flat-rates launched in 3Q07
1,600

Total traffic (Terabyte)

6,000
1,400
5,000
1,200
4,000 1,000
3,000 800
600
2,000
400
1,000 200
0 0

Revenue per Gigabyte Total traffic

•2Q07-2Q09 - Traffic volume up by 900x
•Flat-rate reduced revenue/Gb from US$5,600 to $11!
•Equivalent of just $0.01 per Megabyte in 2Q09
Source: Operator; Informa Telecoms & Media
A business case for LTE?

04/08/2010
Mobile VAS Market Development
how to
ensure good
2G & 2.5G 3G and 3.5G
rev/MB Reduce
Voice-dominated Data-dominated churn and
SACs
Focus on acquisition Focus on retention
For revenues
Pay-per-use Subscription or bundled or just to
differentiate
Operator portals App stores

One size fits all Market segmentation Custom

offerings for
every user
From infrastructure-based competition to service-based competition

Source: Informa Telecoms & Media

 Factors Impacting Mobile VAS Provision

Emerging markets Developed markets

• SMS, IVR and USSD based services • Data-rich apps, multimedia services

• Low-margin, high-volume VAS • High-margin, low-volume VAS

• Demand mostly for local, vernacular • Strong demand also for popular global
content content

• Handset-agnostic service deployments • Handset-dependent service deployments

Source: Informa Telecoms & Media

04/08/2010
 Examples of Innovative Mobile VAS in Growth Markets

Service
Country Provider Service Category
China China Mobile Rural Information Service
South Africa MTN Please Call Me
Bangladesh GrameenPhone CellBazaar Utility
Kenya Safaricom M-Pesa
Turkey Turkcell, Avea Mobile Signature Service
China China Mobile Fetion
Social Networking
South Africa Mxit Mxit
Nigeria Globacom Glo Caller Tune Personalisation
Source: Informa Telecoms & Media

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 Mxit Mobile Social Networking Service

Most widely used mobile social

networking service in South Africa.

The service platform has been extended

into a range of new areas beyond simple
mobile chat and IM features.

Now a number of organisations are using

the platform to deliver different services
including maths education through a
program backed by Nokia South Africa.

Source: Informa Telecoms & Media

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 GrameenPhone’s CellBazaar Service

Allows users to buy or sell goods using

their mobile phone.

To sell something, users post the

information on CellBazaar site via their
mobile phone and buyers can then contact
them on their mobile.

There is no extra charge for using the

service – just the standard SMS/WAP
charges.

Source: Informa Telecoms & Media

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Future growth – embedded devices, M2M and
vertical/enterprise sectors The cost of embedding a
cellular modem needs to
M2M come down from $30 to
Embedded devices below $10 to make this
vision a reality

M2M service
providers saw
50-100%
Healthcare revenue
Operators need to Education growth in 2009
ensure that their M2M Government
divisions work with Utilities
Transport Getting the right
enterprise units
platform and business
Vertical sectors
model will be crucial
Future growth - using mobility to power emerging market
economies

Emerging markets are rich in

potential for mobile payments,
education, health, utilities and
government.

Market fragmentation and

competition between operators,
handset manufacturers and
financial institution risks slowing
the emergence of these new
services.

04/08/2010
Concluding remarks
3G services will boost data ARPU but SMS and IVR will continue to play
a crucial role in driving mass market VAS usage in emerging markets.

Future growth in emerging markets will depend on the operators,

handset vendors and content providers ability to work together.

Operators’ apps strategies will help them differentiate but also

compromise their existing content strategies and portals.

Flat-rate mobile broadband can’t be a long term strategy. Smart pricing

and attractive VAS will be necessary for long term growth.

M2M and vertical enterprise sectors will be key drives for future growth.
Further reading...
• New for 2009, Mobile Value Added Services in
Mobile Value Added Services
in Growth Markets
Available to clients through the
Mobile Content & Apps channel
of the Intelligence Centre
Login – http://ic.informatm.com
Also available from our online
store:
www.informatm.com/mobileservices
www.informatm.com
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Growth Markets strategic report from Informa
Telecoms & Media addresses and analyses the high
growth emerging mobile markets and the opportunities
to drive data ARPU through innovative and attractive
mobile value added services in these markets.
This report will also provide you with detailed
information and analysis on mobile VAS (Value
Added Services) currently being offered in growth
markets; the number of users, amount of usage, and
the revenues these services are generating; and what
challenges and opportunities mobile industry players
have in these markets.
04/08/2010 21
 Thank you

More information on our Mobile VAS market research at

https://commerce.informatm.com/reports/main/mobile-value-added-
services-in-growth-markets.html

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