Mobile VAS revenue to grow at 13% CAGR in Asia Pacific: Ovum

Mobile value-added service (VAS) revenues will grow at 13 percent CAGR in Asia Pacific during 2013-2018, according to Ovum.

Global mobile VAS revenue growth will be lower than the growth in the Asia Pacific region. Ovum says globally, mobile VAS revenues are set to grow at 10 percent CAGR between 2013 and 2018.

Besides Asia Pacific markets, Africa, which is finding mobile as the first device for connectivity, will drive increase in global mobile VAS revenues, said Ovum.

Ovum considers China as one of the mobile VAS growth drivers. The report does not mention about India, the second largest telecom market in the world.

The second region with significant growth is the Middle East and Africa, with a CAGR of 12 percent.

There will be high growth in VASs in Africa, propelled by services based on mobile entertainment and mobile utility.

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 range of monetizable services, despite a heavy OTT presence. The widespread enthusiasm for personalization in Asia and the strong role of the operators 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.

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International telecom body ITU on Monday said by end 2013 there will be 6.8 billion total mobile-cellular subscriptions. 2.7 billion people will be connected to the Internet. Mobile broadband connections over 3G and 3G+ networks are growing at an average annual rate of 40 percent, equating to 2.1 billion mobile-broadband subscriptions and a global penetration rate of almost 30 percent. Almost 50 percent of all people worldwide are now covered by a 3G network.

Ovum says mobile VAS growth will come from telecoms efforts in mobile TV, connected home services, security, payments, and digital games.

“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,” said Neha Dharia, analyst for Consumer Telecoms at Ovum.

Telecoms in North America and Asia-Pacific are attempting to grow VAS revenues by creating a range of new VASs.

Over the next five years, VAS innovation will focus mainly on mobile payments, connected home, security, and utility services.

According to an earlier telecom analysis, Ovum said broadband access will be the most significant growth opportunity between 2012 and 2017. The growth in demand will result in next-generation broadband revenues in emerging markets doubling to $193 billion and connections tripling to $3.7 billion.

Earlier, Ovum predicted that telecom industry revenues worldwide will exceed $2.0 trillion in 2012, supported by more than $330 billion in capital expenditures. Infrastructure equipment sales will exceed $83 billion, and sales of optical components for telecom will exceed $6.5 billion.

The key to managing challenges faced by telecoms is identifying and capturing a part of the higher-growth segments of the next five years. For retail telecoms, some key growth opportunities are mobile broadband, managed and hosted IP voice, enterprise Ethernet services, music subscriptions, public cloud services, digital games, and IPTV.

Wholesalers face a low-growth environment generally, although wholesale managed services offer above-average gains.

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