mobile vas in emerging markets 11 2-11
DESCRIPTION
I contributed in the Egypt part as professional expert.TRANSCRIPT
Mobile VAS in Emerging Markets - India and Egypt
Frost & Sullivan’s Growth Consulting can assist with your growth strategies
Aandal Margabanthu
Information & Communication Technologies
2,November 2011
2
Today’s Presenters
Aandal Margabanthu, Research Associate,
Information & Communication Technologies,
Frost & Sullivan
3
Focus Points
Agenda
� Introduction
� Market Definitions and Product Segmentation
� Why MVAS?
� Explosive Growth in Mobile Subscribers
� Scope of the Study
� Drivers and Restraints for Mobile VAS Market
� India VAS Market
� Egypt VAS Market
� Increasing VAS Penetration
� Growth in VAS Revenues
� Analysis of Popular VAS Segments
� Prevalent Business Models
� Revenue Sharing Model
� New Opportunities
� Strategic Conclusions
4
Introduction
5
Market Definition and Product Segmentation
Mobile Value Added Services as those services that offer differentiation for operators and also allows them
to charge a premium price. It includes Non voice services such as SMS ( P2P,P2A etc), MMS, RBT , data
services like the ones using GPRS, WLAN, 3G etc and other WAP,IVR,IVVR and USSD based services.
Value Added
Services
Messaging (P2P/P2A/A2P)
Non SMS Services
Ring Back Tones
Data Services
Voice/IVR Video/USSD/etc
Product Segmentation
6
Why MVAS?
Mobile phone has transcended from simple communication tool to an all-powerful
infotainment and utility tool
Mobile operators are shifting from Voice to Value Added and Data
Services
Importance
of MVAS
Explosive
growth of
Mobile Subscribers
Proliferation
of Smartphone
and Smart devices
Falling Voice ARPU
and reducing
operator’s margins
Evolving
end user
preferences
7
Mobile Subscribers Growth
0
500
1000
1500
2000
2010 2017
Subscribers(m
n)
India Egypt
Explosive Growth in the Wireless Subscribers
• The Indian and Egyptian markets have been witnessing an explosive growth in the subscriber base in the recent years due to increased affordability and innovative and price competitive services offered
• Another reason is the availability of cheap handsets with enhanced features like 3G support etc• Voice services still corresponds to about 80% of the operators revenues but there is an increase in data
usage in India and Egypt• The ARPU will continue to decline in the both the countries
Source : Frost & Sullivan
CAGR (India): 8.9%
CAGR (Egypt): 5.31%
822.9
1467.5
8
Scope of the Study
The study provides comprehensive insights into the emerging Mobile VAS markets of India
and Egypt. It includes detailed analyses on the following
• Growth in the Wireless Market with Subscriber, ARPU and Revenue Forecasts
• Key Trends, Drivers and Restraints for the MVAS Market
• VAS subscribers, penetration, ARPU and Revenue
• Analysis of Value Added Services (Messaging, Premium Content, RBT, Data etc) and
VAS platforms (SMS, IVR, WAP etc) including forecasts and revenues
• Distribution and Revenue Share Models
• New Opportunities in VAS
• Competitive Intelligence including market share by operators and key vendor profiling
9
Drivers and Restraints for the Mobile VAS Market
10
India VAS Market M
ark
et
Dri
vers
Mark
et
Res
train
ts
1-2 years 3-5 years 5-7 years
MVAS Market: Key Market Drivers and Restraints (India), 2010-2017
Launch of 3G services in late 2010 and impending
launch of LTE in 2012 will increase the data usage
Availability of customer centric, vernacular
information that can cater to the needs of all
segments
Underdeveloped mobile internet ecosystem with
irregularities in connectivity ,billing etc
Availability of feature rich Smartphones and feature
phones at an affordable price range
Lack of transparent VAS pricing scheme
Differentiation and Revenue Generation
tool for Operators
Regulatory Constraints for enabling VAS
Source: Frost & Sullivan analysis
High
Medium
High High
High High
Medium Medium High
Medium Medium
Medium Medium Medium
MediumMediumHigh
High High Medium
Medium
11
Egypt VAS MarketM
ark
et
Dri
vers
Mark
et
Res
train
ts
1-2 years 3-4 years 5-7 years
Availability of high speed data services at affordable
prices
High Pricing of VAS services
Relaxation in Government Regulations
Poor Smartphone penetration owing high
pricing and low disposable income levels
Differentiation and revenue generation
tool for operators amid declining voice
revenues
Unstable Socio Economic Scenario in
the country
MVAS Market: Key Market Drivers and Restraints (Egypt), 2010-2017
Source: Frost & Sullivan analysis
Medium
Medium
High High
High High
Medium High Medium
Medium HighLow
High Medium Low
LowMediumHigh
High Medium Low
Increased Availability of innovative Apps
and Services in the market
Lack of Awareness among end users about VAS
services available in the marketMedium Low Low
Absence of a transparent revenue sharing model between
service providers and VAS vendorsMedium Low Low
12
Increasing VAS penetration
The VAS subscribers in India and Egypt are likely to increase at a CAGR of 14.5% to reach
865.54 million by 2017, a majority of whom will be from India
VAS penetration in India as of June 2011 was 52.5% of the
actual subscribers
VAS penetration in India is likely to reach 85% of the actual
subscribers by end of CY 2017
Egypt had a VAS penetration of 77% as of June 2011
VAS penetration in Egypt is likely to reach 92% by Dec 2017
Note: Actual subscribers are calculated after reducing the number of multi SIM subscribers. Active subscribers are the total number of VLR subscribers
13
VAS Revenues
2.67
28
3.8
0.53
0
5
10
15
20
25
30
35
2010 2017
Revenues(USD billion)
India Egypt
Growth in VAS Revenues
• VAS and Data will become a USD 28 billion industry in India by 2017• Egyptian VAS revenues are likely to reach USD 3.8 billion by 2017• VAS and Data will contribute to more than 50% of the overall operator’s revenues in both the countries
Source : Frost & Sullivan
14
Analysis of Popular VAS Segments
• P2P SMS in India had an actual subscriber penetration of 50% in 2010 and contributed to about 30% of the overall
VAS revenues
• As of June 2011, more than 50% of the overall wireless subscribers in Egypt used P2P SMS
SMS(P2P)
• In India CRBT had a penetration of 30% in 2010 and it contributed to 23% of the overall VAS revenues
• Around 29% of the overall wireless subscribers used RBT and CRBT as of June 2011 in Egypt
CRBT
• 20% of the actual subscribers in India use Premium content including ring tones, music downloads, games, premium
SMS, contents etc as of 2010
• Around 24% of the overall subscribers as of June 2011 used premium content and services in Egypt
Premium Content and Services
• Mobile Broadband will be preferred broadband access technology in both the countries
• In India the number of end users using mobile broadband on handsets is slated to increase at a CAGR of 93%(2010-
2017)
• Wireless broadband adoption in Egypt is slated to increase at a CAGR of 17.2%(2010-2017)
Mobile Broadband
15
Prevalent Business Models
Content Owner End Users
Handset Manufacturer
Content Aggregator
Technology Enabler
Operators
Off Deck(D2C)
(Mobile Broadband)
Off Deck(D2C)
(Mobile Broadband/ Retail outlets)
On Deck
Operator based or On Deck model is the most common business model in these countries. Off Deck
or Direct to Customer model has not gained much popularity or adoption
16
Revenue Sharing Model
Content Owner
Content Aggregator
Technology Enabler
(Service Delivery
Platform Provider)
Network Operator
End User
• Presently there is no
transparent revenue Sharing
model between Operators and
VAS Vendors in Egypt.
• Operator’s share of revenue
ranges between 50% and 70%
while rest of the revenue is
shared between content
provider, content aggregator
and technology enabler
India Egypt
• Content Owner retains 5-
10% of revenue
• Content Aggregator retains
10-15% revenue
• Technology enabler
(Managed VAS Vendor)
Retains 10-20 % of
Revenue
• Mobile operator gets the
rest of revenue i.e. around
60-80 %
17
New Opportunities
Mobile Broadband Applications
• VoIP
• Video application including video on
demand and live TV
• Social Networking apps including multi-
user gaming etc
Mobile Broadband Applications
• VoIP
• Video application including video on
demand and live TV
• Social Networking apps including multi-
user gaming etc
Utility Applications
• Mobile Health
• Mobile Education
• Mobile Agriculture
• Mobile Governance
• Disaster management/alerts
• Emergency alerts
Utility Applications
• Mobile Health
• Mobile Education
• Mobile Agriculture
• Mobile Governance
• Disaster management/alerts
• Emergency alerts
Future VAS Offerings
Future VAS Offerings
Transactional and Commerce
Application
• Mobile Banking: A precursor to financial
inclusion
• Mobile Commerce (SMS/USSD/WAP)
• NFC related mobile payments and
transaction
Transactional and Commerce
Application
• Mobile Banking: A precursor to financial
inclusion
• Mobile Commerce (SMS/USSD/WAP)
• NFC related mobile payments and
transaction
Location Based applications
• Navigation application
• Fleet/Work Force Tracker
• Location based advertisements/alerts/information including
weather/traffic updates
• Location based coupons and deals from operators/vendors
Location Based applications
• Navigation application
• Fleet/Work Force Tracker
• Location based advertisements/alerts/information including
weather/traffic updates
• Location based coupons and deals from operators/vendorsSource : Frost & Sullivan
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Strategic Conclusions
19
Key Takeaways (India)
22Top VAS revenue grossers like SMS and
CRBT will be replaced by other services like data etc in the study period
Top VAS revenue grossers like SMS and CRBT will be replaced by other services like
data etc in the study period
33
The focus of the operators will move from voice to data in the near future. VAS will be a revenue generation and brand differentiation
tool
The focus of the operators will move from voice to data in the near future. VAS will be a revenue generation and brand differentiation
tool
44
Increasing focus on m-commerce, utility application like m-Health, m- Education etc will help in achieving inclusive growth in the
country
Increasing focus on m-commerce, utility application like m-Health, m- Education etc will help in achieving inclusive growth in the
country
55Mobile broadband and adoption of off deck
vale added services will bring forth a revised and equitable revenue share model
Mobile broadband and adoption of off deck vale added services will bring forth a revised
and equitable revenue share model
11Increasing Smartphone penetration and usage of data services on the mobile will
drive the VAS market ahead
Increasing Smartphone penetration and usage of data services on the mobile will
drive the VAS market ahead
20
Key Takeaways (Egypt)
22High literacy rate of the target population will
help in industry growth
High literacy rate of the target population will help in industry growth
33Operators are focusing on increasing
strategic alliances with ISPs, banks, vendors and global platform providers
Operators are focusing on increasing strategic alliances with ISPs, banks, vendors
and global platform providers
44
3G infrastructure upgrades and increased affordability due to subsequent price
rationing provide great growth opportunities for VAS in the country
3G infrastructure upgrades and increased affordability due to subsequent price
rationing provide great growth opportunities for VAS in the country
55Key to the success lies in providing
innovative utility services at attractive prices
Key to the success lies in providing innovative utility services at attractive prices
11Growing wireless market represents a huge
opportunity for VAS players in Egypt
Growing wireless market represents a huge opportunity for VAS players in Egypt
21
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For Additional Information
Caroline Lewis
Corporate Communications
91.022.6607 2000
Aandal Margabanthu
Research Associate
Information & Communication Technology Practice
Deepshri Iyer
Corporate Communications
91.022.6607 2000
Abhishek Chauhan
Senior Consultant
Information & Communication
Technology Practice