Mobile vas in emerging markets executive summary

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  • 1. Mobile VAS in Emerging Markets India and Egypt P5CC-65 October 2011
  • 2. ContentsSection Slide NumbersExecutive Summary 9Introduction 16 Definitions 17 Scope of the Study 20 Key Notes and Assumptions 21 • India Market Analysis 22 Market Trends 23 Subscriber Forecasts 24 ARPU and MoU 25 Wireless Revenue Forecasts 26 Wireless Broadband Market 27 • External Challenges: Drivers and Restraints 28 Drivers and Restraints 29P5CC-65 2
  • 3. ContentsSection Slide Numbers Drivers Explained 30 Restraints explained 32 • MVAS Market Forecasts 34 Market Engineering Measurements 35 Market Trends 37 VAS Subscriber forecasts 38 VAS ARPU forecast 39 VAS Revenue Forecast 40 • Analysis of VAS segments 42 SMS(P2P) 43 Caller Ring Back Tones 44 Premium Content 45 Mobile Internet 46 Mobile Commerce 47 Other Segments 49P5CC-65 3
  • 4. ContentsSection Slide Numbers Social Networking 50• Popular Content 51• Mobile Applications Market 53 Mobile Applications Market 54 Types of Mobile Application Stores 55 Market Drivers& Restraints 56 Mobile Applications Revenue and Business Models 57• Distribution Channels 58• Revenue Models 60• Market Share and Competitive Analysis 63 Operator Market Share 64 Market Share Evolution 65 P5CC-65 4
  • 5. ContentsSection Slide Numbers Competitive Environment 66 Profiles of Top Competitors (Operators) 67 Profiles of Top Competitors (Platform Providers) 68 Profiles of Top Competitors (Other VAS Vendors) 69 India Telecom Market Top Competitors 70 • PESTLE Analysis 71 • The Last Word- Three Big Predictions 73 • Egypt Market Analysis 74 Market Trends 75 Telecom Market Statistics 76 ARPU and MoU 77 Wireless Revenue Forecasts 78 Wireless Broadband Market 79 • External Challenges: Drivers and Restraints 80 Drivers and Restraints 81 Drivers Explained 82 Restraints explained 84P5CC-65 5
  • 6. ContentsSection Slide Numbers• MVAS Market Forecasts 86 Market Engineering Measurements 87 Market Trends 89 VAS Subscriber forecasts 90 VAS ARPU forecast 91 VAS Revenue Forecast 92 • Analysis of VAS segments 93 Mobile Banking 96 • Analysis of VAS Platforms 97 Market Trends 98 • Popular Content and Applications 99 VAS Evolution 101 • Distribution Channels 102 • Revenue Models 104 • Market Potential 106 P5CC-65 6
  • 7. ContentsSection Slide Numbers• Market Share and Competitive Analysis 108 Competitive Analysis-Market Share 109 Competitive Environment 111 Profiles of Top Competitors (Operators) 112 Profiles of Top Market Players 113 Egypt Telecom Market Top Competitors 114 • PESTLE Analysis 115 • The Last Word- Three Big Predictions 117 • Appendix 118 Table of Acronyms Used 121 P5CC-65 7
  • 8. IntroductionP5CC-65 8
  • 9. Definitions • 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. Product Segmentation Value Added Services Messaging Non SMS Services (P2P/P2A/A2P) Ring Back Data Voice/IVR Video/USSD Tones Services /etc Source: Frost & Sullivan analysisP5CC-65 9
  • 10. Other Market DefinitionsP2P SMSMessages from mobile to mobile wherein one user uses his/her handset to create message and then sendit to another user/users.A2P SMSMessages produced and sent from an application (such as a news alert) to a mobile subscriber.P2A SMSMessages sent from a mobile subscriber to an application (such as SMS-based response to a TV votingcontest).Premium ContentChargeable content and services delivered over mobile, which exclude messaging revenues and data trafficcharges.Mobile EntertainmentChargeable entertainment-related premium content such as mobile games, ringtones, wallpapers, icons,music, and video.P5CC-65 10
  • 11. Other Market Definitions (Contd…)Mobile InformationChargeable information premium content such as news (includes weather forecast, news update, directory,and entertainment news), search engines, location-based tracking (excludes telematics tracking services),and language thesaurus/translation.Mobile Music and Video SegmentChargeable music premium content that includes full-track song downloads and streaming mobile musicservices but excludes ringtones and ring back tones. Mobile video includes chargeable video-on-demand,mobile TV, and video streaming.Other Premium ContentChargeable premium content such as mobile commerce (m-commerce, that is, mobile wallet, mobilebanking), telematics, and mobile e-mail solutions for the mobile enterprise. Newer value-added services,such as mobile advertising and mobile marketing services, are also considered.P5CC-65 11
  • 12. Scope of the Study• This Frost & Sullivan study provides comprehensive insights into the emerging mobile markets of India and Egypt, to evaluate key opportunities in mobile VAS market. The base year of the study is CY 2010. The forecast period is till CY 2017.• The study will provide a detailed analysis of the mobile markets in these two countries in terms of subscribers and revenue growth, market drivers and challenges etc. Key trends in the VAS industry and their impact in the study period will be discussed.• It included detailed inputs on parameters like VAS subscribers and penetration, VAS revenues, data ARPU etc and their growth trajectory till 2017. It provides a comprehensive evaluation of VAS segments such as Infotainment, m commerce and VAS platforms such as messaging (SMS,MMS etc) ,RBT, IVR, Video, USSD. It attempts to gauge the market potential of each of these segments and platforms.• The report would carries insights on the changing end user preferences and related unfolding of opportunities. The prevalent business models and distribution channels in both the countries would be discussed in the report.• It provides a profile of the top operators, VAS vendors and other major ecosystem participants to showcase the competitive landscape existing in these countries.• The study will benefit the entire VAS ecosystem by enabling them to take strategic decisions in terms of identifying new revenue streams, enriching end user experience etc.P5CC-65 12
  • 13. Key Notes and Assumptions• For the purpose of this study, Frost & Sullivan seeks to analyze the changing MVAS landscape in emerging markets of India and Egypt• Revenues/ Valuations will be provided in U.S. dollars, unless specified otherwise.• All years are calendar years. Base year is CY 2010.• Only service providers that are regarded as major participants with a clearly defined telecom strategy and/or significant market revenues in key application markets will be covered under market share analysis.• List of service providers covered in market share analysis is subject to change according to the evolving market landscape and service providers’ market performance.• The exchange rate used is the average rate for CY 2010 and the rates are listed below: 1 USD 45.7 Indian Rupee (INR) 1 USD 5.9 Egyptian Pounds (EGP)P5CC-65 13
  • 14. Executive SummaryP5CC-65 14
  • 15. Executive Summary India•As of June 2011, India had about 851.7 million Wireless subscribers. Out of these around 70% ofsubscribers were active (VLR) subscribers. The teledensity based on the overall subscribers was around70.16%•As of CY 2010, VAS contributed to about 12% of the overall operator revenue. This is likely to reach 25% by2017•Around 320 million subscribers used Value added services in India as of June 2011. The VAS penetration(population) was about 26.3%•P2P SMS has traditionally been the highest contributor in the VAS segment followed by CRBT. However thistrend is likely to change and together, SMS and CRBT will contribute about 22% of the overall VAS revenuesin 2017•The VAS revenues is likely to reach 12.6 billion USD by 2017 at a CAGR of 30%.•Video calling, Mobile TV, Location Based Services and Mobile commerce are likely to witness increased usage and adoption in the near futureP5CC-65 15
  • 16. Executive Summary Egypt•As of June 2011, there were 76.43 million mobile subscribers in Egypt including a large number of inactive subscribers due to prevalenceof multi-SIM subscribers . The subscriber penetration stood at 95.07% (June 2011) and is expected to cross the cent percent mark in CY2012•The blended industry ARPU is estimated to increase from USD 4.56 in H1 2011 to USD 6.00 in 2017. While the Voice ARPU is expectedto continue to decline, data ARPU will increase owing to increased VAS uptake•Relaxation of government regulations and increasing penetration of mobile broadband services are likely to drive the usage of VAS anddata services. On the other hand, unstable socio-economic scenario, low smartphones penetration and high pricing of VAS services willhinder the growth of VAS industry in the country•VAS penetration is more than 75% percent in the country considering P2P SMS a VAS service. Non SMS VAS subscribers are estimatedto reach 47 million by 2017, taking the penetration level to 46% from present 23%•Revenues generated by the VAS industry are estimated to reach USD 3.80 billion by 2017, representing more than 52% of the operators’wireless revenues•Consumer focus is shifting from entertainment VAS to infotainment and utility based VAS services.The onus is on third party application developers and VAS vendors to help operators generate new revenue streams P5CC-65 16
  • 17. Executive Summary—Market Engineering MeasurementsMarket OverviewMVAS in Emerging Markets: India, June 2011 CAGR of VAS VAS Revenues Market Stage VAS Penetration VAS ARPU subscribers (till (USD billion) 2017) Mature 52.5% 2.85 $0.287 15.5% (June 2011) (June 2011) VAS CAGR of VAS Degree of Customer Price Market Penetration revenues (till Technical Sensitivity Concentration 2017 2017) Change 85% 27% 9 6.5 66 (% of market share held by (CAGR) (scale:1 [low] to 10 [High]) (scale:1 [low] to 10 [High]) top 3 companies) Note: VAS penetration has been calculated based on the total numberDecreasing Stable Increasing of actual subscribers in that particular year P5CC-65 17
  • 18. Executive Summary—Market Engineering MeasurementsMarket OverviewMVAS in Emerging Markets: Egypt, June 2011 CAGR of VAS VAS Revenues Market Stage VAS Penetration VAS ARPU subscribers (till (USD Billion) 2017) Mature 77.19% 0.32 $0.9 8.46% (June 2011) (June 2011) VAS CAGR of VAS Degree of Customer Price Market Penetration revenues (till Technical Sensitivity Concentration 2017 2017) Change 92.16% 32.62% 8 6 100 (% of market share held by (CAGR) (scale:1 [low] to 10 [High]) (scale:1 [low] to 10 [High]) top 3 companies) Note: VAS penetration has been calculated based on the total numberDecreasing Stable Increasing of Wireless subscribers in that particular year P5CC-65 18
  • 19. Key Takeaways (India) Increasing Smartphone penetration and1 usage of data services on the mobile will drive the VAS market ahead Top VAS revenue grossers like SMS and2 CRBT will be replaced by other services like data etc in the study period The focus of the operators will move from voice to data in the near future. VAS will be a3 revenue generation and brand differentiation tool Increasing focus on m-commerce, utility application like m-Health, m- Education etc4 will help in achieving inclusive growth in the country Mobile broadband and adoption of off deck5 value added services will bring forth a revised and equitable revenue share modelP5CC-65 19
  • 20. Key Takeaways (Egypt) Growing wireless market represents a huge 1 opportunity for VAS players in Egypt High literacy rate of the target population will 2 help in industry growth Operators are focusing on increasing 3 strategic alliances with ISPs, banks, vendors and global platform providers 3G infrastructure upgrades and increased affordability due to subsequent price 4 rationing provide great growth opportunities for VAS in the country Key to the success lies in providing 5 innovative utility services at attractive prices<0000-00> 20
  • 21. Market Engineering MethodologyOne of Frost & Sullivan’s core deliverablesis its Market Engineering studies. Theyare based our proprietary MarketEngineering Methodology. This approach,developed across the 50 years ofexperience assessing global markets,applies engineering rigor to the oftennebulous art of market forecasting andinterpretation.A detailed description of the methodologycan be found here. Source: Frost & Sullivan research.P5CC-65 21