Mobile Value Added Services - India - Sample


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India’s telecom industry has shown strong growth. The primary reason for increasing revenues in this sector is due to the rise in wireless subscribers. Mobile phones are becoming more affordable and are viewed as a necessity today for instant communication. However, over the years the average revenue per unit (ARPU) accruing to operators has been falling, shifting emphasis to alternative means of revenue generation. This has led to growing interest in the mobile value added services (MVAS) market which is forecasted to grow by 39% annually from 2007-11.

The report begins with market overview including market size, growth and key segments. The revenue sharing model has been discussed coupled with the various delivery platforms available. A demand and supply side analysis of drivers explains factors contributing to the growth potential. The demand side drivers include increasing consumer demand, a growing medium for advertising, rising demand for regional content, growing rural market while on the supply side declining ARPU, rising mobile tele-density and the introduction of 3G based applications have boosted the market. The key challenges identified include a biased revenue sharing model, lack of awareness among consumers, dominance of prepaid customers, lack of copyright protection and authentication standards and feature rich handsets beyond the buying power of users.

The report identifies the existing trends in the Mobile VAS market including increase in PE/VC investments, growing demand for mobile music and mobile gaming, partnerships between mobile manufacturers/operators and MVAS players towards consolidating their positioning the market, the inorganic growth path adopted by major players and the growing demand from corporates for enterprise VAS.

The future outlook section discusses the various value-added services that are forecasted to grow coupled with their applicability and the corresponding user base. The major players, across the value chain, have been identified and an overview as well as the business outlook for each company has been provided.

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Mobile Value Added Services - India - Sample

  1. 1. Mobile Value Added Services - India April 2009
  2. 2. Executive Summary SAMPLE Market Drivers & Challenges Trends Competition <ul><ul><li>Estimated worth INR XX mn in 2008; expected to grow to INR YY mn in 2011 </li></ul></ul><ul><ul><li>Value added services (VAS) accounts for a% of operators revenue </li></ul></ul><ul><ul><li>Services offered can be categorized into information, entertainment and M commerce </li></ul></ul><ul><ul><li>Increased focus of PE/VC firms </li></ul></ul><ul><ul><li>Growth in demand for mobile music and gaming </li></ul></ul><ul><ul><li>Partnerships between mobile manufactures/ operators & MVAS players </li></ul></ul><ul><ul><li>Growth via acquisitions </li></ul></ul><ul><ul><li>Strong demand from corporates for enterprise VAS </li></ul></ul><ul><ul><li>A highly fragmented market with many small and medium sized companies </li></ul></ul><ul><ul><li>Drivers: </li></ul></ul><ul><ul><li>Demand Side </li></ul></ul><ul><ul><ul><li>Increasing consumer demand for VAS </li></ul></ul></ul><ul><ul><ul><li>Medium for advertising </li></ul></ul></ul><ul><ul><ul><li>Demand for regional content </li></ul></ul></ul><ul><ul><ul><li>Growing rural market </li></ul></ul></ul><ul><ul><li>Challenges: </li></ul></ul><ul><ul><li>Biased revenue sharing model </li></ul></ul><ul><ul><li>Lack of copyright protection and authentications standards </li></ul></ul><ul><ul><li>Dominance of pre-paid customers </li></ul></ul><ul><ul><li>Lack of consumer awareness </li></ul></ul><ul><ul><li>Lack of purchase of feature rich handsets </li></ul></ul><ul><ul><li>Supply Side </li></ul></ul><ul><ul><ul><li>Declining ARPUs </li></ul></ul></ul><ul><ul><ul><li>Rising mobile teledensity </li></ul></ul></ul><ul><ul><ul><li>Introduction of 3G based applications </li></ul></ul></ul><ul><li>Y </li></ul><ul><li>V </li></ul><ul><li>B </li></ul>Aggregator <ul><li>Z </li></ul><ul><li>W </li></ul><ul><li>C </li></ul><ul><li>X </li></ul><ul><li>U </li></ul><ul><li>A </li></ul>Technology Enabler Content Provider/Creator <ul><li>X </li></ul><ul><li>Y </li></ul><ul><li>Z </li></ul>Foreign Players <ul><li>A </li></ul><ul><li>B </li></ul><ul><li>C </li></ul>Domestic Players
  3. 3. <ul><li>Introduction </li></ul><ul><li>Market Overview </li></ul><ul><li>Drivers & Challenges </li></ul><ul><li>Trends </li></ul><ul><li>Future Outlook </li></ul><ul><li>Competition </li></ul><ul><li>Key Developments </li></ul>
  4. 4. Indian Telecom Market has been growing with rapid increase in CDMA and GSM mobile subscribers <ul><li>Total Revenue </li></ul><ul><ul><li>2008 – USD XX bn </li></ul></ul><ul><li>Total Subscribers – U mn (2008) </li></ul><ul><ul><li>Fixed Subscribers - V mn </li></ul></ul><ul><ul><li>Mobile Subscribers - W mn </li></ul></ul><ul><li>Tele-density: a% (March 2008) </li></ul><ul><li>Projections: </li></ul><ul><ul><li>Total revenues to increase to USD YY bn by 2012 </li></ul></ul><ul><ul><li>Tele-density of the country to go up to b% by end of fiscal year 2009-10 </li></ul></ul><ul><ul><li>X mn mobile connections by 2012 </li></ul></ul><ul><ul><li>Y mn GSM subscribers by the end of 2009 </li></ul></ul>SAMPLE Overview Mobile Subscribers (2008) Source: Wireless Operators Market Share (Mar’ 09) g% Company 1 a% Company 2 b% Company 3 c% Company 4 d% Company 5 e% Company 6 f% Company 7 A U 2004 B V 2005 C W 2006 D X 2007 E Y 2008 GSM CDMA mn
  5. 5. Mobile Value Added Services market is growing strongly with demand for entertainment services dominating the market <ul><li>Mobile VAS market is worth INR XX bn in 2008 and is forecast to reach INR YY bn in 2011 </li></ul><ul><li>Mobile VAS accounts for a% of mobile operator’s revenues </li></ul><ul><li>Mobile VAS can be categorised as – </li></ul><ul><ul><li>Information - News alerts, stock prices, air/rail ticket status, bank account balance/transaction alerts etc. </li></ul></ul><ul><ul><li>Entertainment - Songs, ringtones, caller ring-back tones (CRBTs), wallpapers, games, jokes etc. </li></ul></ul><ul><ul><li>M-Commerce - M-payment, M-banking etc. </li></ul></ul>SAMPLE Overview Data and Voice Break-up Source: MVAS Market Size & Growth 2009(e) 2008(e) 2007 2006 2005 2004 Video/TV Games Information Services Music Ringtones/ Graphics 0% 100% 20% 40% 60% 80% Market Segmentation u% a% A 2007 v% b% B 2008 w% b% C 2009(e) x% c% D 2010(e) y% d% E 2011(e) SMS VAS Non-SMS VAS a% INR bn u% a% 2004 v% b% 2005 w% c% 2006 x% d% 2007 y% e% 2008 Data Voice Segment X to witness highest growth Share of data revenue is increasing %
  6. 6. Drivers Drivers Declining ARPU Rising Mobile Tele-Density Increasing Consumer Demand for VAS Growing Medium for Advertising Demand Side Supply Side Increase in Demand for Regional Content Introduction of 3G Based Applications Growing Rural Market
  7. 7. Challenges Challenges Feature Rich Handsets beyond the Buying Power of Users Lack of Copyright Protection and Authentications Standards Dominance of Prepaid Customers Lack of Awareness among Consumers Biased Revenue Sharing Model
  8. 8. Key Trends 17.6 Trends Growth via Acquisitions Strong Demand from Corporate for Enterprise VAS Partnerships between Mobile Manufactures/ Operators & MVAS Players Growth in Demand for Mobile Music and Gaming Increased Focus of PE/VC Firms
  9. 9. Introduction of A and the growth in demand for B will boost the market SAMPLE Source: U V W X Z Introduction of 3G Technology Change in revenue model <ul><li>Auction for 3G is expected to take place in FY 20-- - -- </li></ul><ul><li>Will boost mobile broadband penetration as it will allow for high speed data transfer </li></ul><ul><li>Operators share expected to decline to b% </li></ul><ul><li>Other players across the value chain accounting for almost c%, as compared to a% currently </li></ul>U V X B C MVAS is expected to account for x% of operator’s revenues by 20-- Top Applications in 2008 a% of subscribers (approx. X mn) using high-end phones can be targeted Top Applications in 2010
  10. 10. A highly competitive market with players constantly developing services to capture market share <ul><li>The market is highly fragmented with a large number of domestic players </li></ul><ul><ul><li>There are more that X companies registered with the Internet and Mobile Association of India (IMAI) as VAS enterprises </li></ul></ul><ul><li>Many domestic players have also presence in the international markets </li></ul><ul><ul><li>Company Y has presence in more than A countries with a% of revenues from overseas </li></ul></ul><ul><ul><li>Company Z services are available in USA, Ireland, UK, Spain, South Africa, UAE, Sri Lanka and Singapore </li></ul></ul><ul><li>Foreign players have also entered the domestic market to capitalize on the profit incentives </li></ul><ul><li>Major players </li></ul><ul><ul><li>Domestic – Company 1, Company 2, Company 3 </li></ul></ul><ul><ul><li>Foreign – Company 4, Company 5, Company 6 </li></ul></ul>SAMPLE Overview Market Share Source: a% Company 1 b% Company 2 c% Company 3 d% Others 65%
  11. 11. Thank you for the attention About Netscribes Netscribes is a knowledge-consulting and solutions firm with clientele across the globe. The company’s expertise spans areas of investment & business research, business & corporate intelligence, content-management services, and knowledge-software services. At its core lies a true value proposition that draws upon a vast knowledge base. Netscribes is a one-stop shop designed to fulfil clients’ profitability and growth objectives. The Mobile Value Added Services report is a part of Research on India’s Telecom Industry Series. For more detailed information or customized research requirements please contact: Disclaimer: This report is published for general information only. Although high standards have been used the preparation, Research on India, Netscribes (India) Pvt. Ltd. or “Netscribes” is not responsible for any loss or damage arising from use of this document. This document is the sole property of Netscribes (India) Pvt. Ltd. and prior permission is required for guidelines on reproduction. Natasha Mehta, CFA Phone: +65 8448 0449 E-Mail: [email_address] Gagan Uppal Phone: +91 98364 71499 E-Mail: [email_address] Research on India is a product of Netscribes (India) Pvt. Ltd. Research on India is dedicated to disseminating information and providing quick insights on “hot” industries in India and other emerging markets. Track our new releases and major updates in these industries on