Slow growth in global mobile VAS revenues over 2013—18

LONDON, UK: Global mobile value-added service (VAS) revenues are set to grow at a slow pace between 2013 and 2018, with a CAGR of 10 percent, according to global analyst firm Ovum.

In a recent market forecast, Ovum found that the increase in global mobile VAS revenues would be driven mainly by the African and Asia-Pacific markets.

Neha Dharia, analyst for Consumer Telecoms at Ovum and author of the report said: "The largest share of revenues will come from the Asia-Pacific region, at 13 percent CAGR. The second region with significant growth is the Middle East and Africa, with a CAGR of 12 percent."

The African market shows the greatest potential, given that it is still in the early stages of development and has lower revenues than the rest of the world. There will be high growth in VASs in this region over the forecast period, propelled by services based on mobile entertainment and mobile utility. This growth is heightened by the fact that Africa is a mobile-first market, which leads to more services being consumed on mobile than on the PC.

Meanwhile, the Asia-Pacific region will contribute the majority of mobile VAS revenues based on the large-scale consumption of operators' mobile services, particularly personalization services. In the less-developed parts of Asia-Pacific, operators will constantly reinvent VASs to offer a wide range of monetizable services, despite a heavy OTT presence. The widespread enthusiasm for personalization in Asia and the strong role of the operator in China will also help to drive this trend.

The increase in VAS revenues can also be attributed to the continued growth in subscriber numbers in the emerging markets and the push from operators to deliver relevant mobile services. The growth will come from telco efforts in mobile TV, connected home services, security, payments, and digital games.

Dharia states: "There is a slowdown in play due to third-party services offering apps and content for free. This is strongest in the European markets, with a -7 percent CAGR."

According to Ovum's research, telcos in North America and Asia-Pacific are attempting to grow VAS revenues by creating a range of new VASs.

"The mobile VAS market is dynamic, and allows telcos to innovate and find new revenue-generating services. Over the next five years, this innovation will focus mainly on mobile payments, connected home, security, and utility services," concludes Dharia.