Global Mobile Value Added Service Will See Slow Revenue Growth Through 2018

A new study from Ovum shows that value added service (VAS) revenue is going to be growing at a slow pace between now and 2018. Ovum provides clients with independent and objective analysis that enables them to make better business and technology decisions. 

The growth in global mobile VAS revenue will mainly be coming from the African and Asia-Pacific markets. According to Neha Dharia, “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.” She is an analyst for consumer telecoms at Ovum and the author of the report.

Even though it is still in the early stages of development, the African market appears to have the greatest potential. This is regardless of the fact that this market has lower revenue than the rest of the world. The Ovum report forecasts that there will be high growth in VASs in the African region over the next couple of years.

One of the factors that make this possible for this region is the fact that Africa is a mobile first market. This drives more services that take place on the mobile platform. More happens on a mobile device than on a PC. A reason for this could be the fact that most of Africa is not wired and therefore has to rely more on mobile access for most services.

On the Asia-Pacific side, the region will contribute the majority of mobile VAS revenue based on the large scale consumption of operators’ mobile services. This is particularly true with personalization services.

The report also forecasts that in the less developed parts of Asia-Pacific, operators will constantly reinvent VASs to offer a wide range of services that can be monetized. This is in spite of the fact of a heavy over-the-top (OTT) presence. The widespread enthusiasm for personalization in Asia and the strong role of the operator in China should assist in driving this trend.

The continued growth in subscriber numbers in the emerging markets is also a reason for the increase in VAS revenue. The push from operators to deliver more relevant mobile services is another reason.

Dharia said, “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.” Ovum’s research shows that telecommunications companies in North America and Asia-Pacific are attempting to grow VAS revenue by creating a range of new VASs.

In concluding the forecast, Dharia states “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.”