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11/09/2009

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04/08/2010

Mobile VAS in Growth MarketsCurrent trends and requirements to enablemass market adoption of services

Shailendra Pandey, Senior Analyst

Mobile Content & [email protected]


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Informa 2009 Industry Survey:Q. What will be the key topics, countriesor companies in 2010?


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France Telecom is 3x bigger than GoogleVodafone is 66x the size of Facebook

04/08/2010

23.6

1

70.1

66.5

0

10

20

30

40

50

60

70

80

Google Facebook France Telecom Vodafone

Online versus mobile operator 2009 revenues ($bn)


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04/08/2010www.informatm.comConfidential

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Global Mobile VAS Market

Informa Telecoms & Media estimates that the Global mobile VAS market was worthUS$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

0

20

40

60

80

100

120

140

160

2008 2009 2010 2011 2012 2013 2014

Asia Pac

North America

Western Europe

Eastern Europe

Latin America

Middle East

Africa


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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 togetheraccount for more mobile subscriptions than rest of the world and this trendwill 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 growingshare 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 theglobal 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


40.9%

11.9%

39.8%

7.3%

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

53.2%

11.3%

33.7%

1.8%

Mobile messaging

Mobile entertainment

Mobile Internet

Others


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46.7%

13.2%

32.9%

7.2%

Mobile messaging

Mobile entertainment

Mobile Internet

Others


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Mobile VAS Market 2009


Asia Pacific US$83 billion

80.5%

3.5% 14.0%

2.0%

Africa US$4.5 billion

79.2

%

5.4% 9.5%

5.9%

Middle East US$7 billion

66.2%

10.1%

20.8%

2.8%

Latin America US$10.8 billion

53.0%

10.6%

33.1%

3.3%

Eastern Europe US$15.1 billion


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More data traffic, but each MB brings inprogressively less revenue

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

0

200

400600

800

1,000

1,200

1,400

1,600

1,800

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

Totaltr

affic(Terabyte)

RevenueperGigabyte

(US$)

Traffic and revenue/GB trend for an Asian operator

Revenue per Gigabyte Total traffic

HSPA and flat-rates launched in 3Q07


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A business case for LTE?

04/08/2010


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Mobile VAS Market Development

From infrastructure-based competition to service-based competition

2G & 2.5G 3G and 3.5G

Voice-dominated Data-dominated

Focus on acquisition Focus on retention

One size fits all Market segmentation

Operator portals App stores

Pay-per-use Subscription or bundled


how toensure good

rev/MB Reducechurn andSACs

For revenuesor just todifferentiate

Customofferings forevery user


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Factors Impacting Mobile VAS Provision

Emerging markets

SMS, IVR and USSD based services

Low-margin, high-volume VAS

Demand mostly for local, vernacular

content

Handset-agnostic service deployments

Developed markets

Data-rich apps, multimedia services

High-margin, low-volume VAS

Strong demand also for popular global

content

Handset-dependent service deployments

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Examples of Innovative Mobile VAS in Growth Markets


CountryServiceProvider Service Category

China China Mobile Rural Information Service

South Africa MTN Please Call Me

Bangladesh GrameenPhone CellBazaarKenya Safaricom M-Pesa

Turkey Turkcell, Avea Mobile Signature Service

China China Mobile Fetion

South Africa Mxit Mxit

Nigeria Globacom Glo Caller Tune Personalisation

Utility

Social Networking


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04/08/2010www.informatm.com

Confidential

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Mxit Mobile Social Networking Service


Most widely used mobile socialnetworking service in South Africa.

The service platform has been extendedinto a range of new areas beyond simplemobile chat and IM features.

Now a number of organisations are usingthe platform to deliver different servicesincluding maths education through aprogram backed by Nokia South Africa.


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GrameenPhones CellBazaar Service


Allows users to buy or sell goods usingtheir mobile phone.

To sell something, users post theinformation on CellBazaar site via theirmobile phone and buyers can then contact

them on their mobile.

There is no extra charge for using theservicejust the standard SMS/WAPcharges.


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Future growth embedded devices, M2M andvertical/enterprise sectors

Embedded devices M2M

Vertical sectors

HealthcareEducationGovernmentUtilitiesTransport

Operators need toensure that their M2Mdivisions work withenterprise units Getting the right

platform and businessmodel will be crucial

M2M serviceproviders saw50-100%revenue

growth in 2009

The cost of embedding acellular modem needs tocome down from $30 tobelow $10 to make this

vision a reality


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04/08/2010

Future growth - using mobility to power emerging marketeconomies

Emerging markets are rich inpotential for mobile payments,education, health, utilities andgovernment.

Market fragmentation andcompetition between operators,handset manufacturers andfinancial institution risks slowing

the emergence of these newservices.


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Concluding remarks

3G services will boost data ARPU but SMS and IVR will continue to playa 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 cant be a long term strategy. Smart pricingand attractive VAS will be necessary for long term growth.

M2M and vertical enterprise sectors will be key drives for future growth.


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Further reading...

New for 2009, Mobile Value Added Services inGrowth Markets strategic report from InformaTelecoms & Media addresses and analyses the highgrowth emerging mobile markets and the opportunitiesto drive data ARPU through innovative and attractive

mobile value added services in these markets.

This report will also provide you with detailedinformation and analysis on mobile VAS (ValueAdded Services) currently being offered in growthmarkets; the number of users, amount of usage, and

the revenues these services are generating; and whatchallenges and opportunities mobile industry playershave in these markets.


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Mobile Value Added Servicesin Growth Markets

Available to clients through theMobile Content & Apps channel

of the Intelligence CentreLogin http://ic.informatm.com

Also available from our onlinestore:www.informatm.com/mobileservices


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Make better business decisions

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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