Introduction to Mobile VAS and Multimedia Services

By ALI Saghaeian
Introduction to
Mobile Value Added Services
and Multimedia
Chief Analyst & Consultant
Telecoms, IT, and Media
Saghaeian [at] gmail.com
Mobile VAS

Objectives
• What is Value Added Service
• Understanding VAS
Ecosystem
• Reasons for Increasing
Importance of VAS
• Learning Key Attributes to
Drive VAS Adoption
• How to create a Sustainable
VAS Proposition
2
• Listing Current
VAS & Multimedia
offerings and their
performance in
the market
Exercise

Agenda
• Global Trend of Contents Usage
• Operators need to focus on VAS
• Voice VAS Classification
• Key Drivers for VAS
• Key Challenges for Service Providers
• Typical VAS Value-Chain
• Critical Factors for Successfully Launching New Services
• Some Operators’ VAS Examples
3Saghaeian [at] gmail.com

Monthly Internet Traffic Forecast: 2015 - 2019

Global Trend of Contents Usage

6
VAS is a defined term to identify non-core services of a
Telecom Operator
Value-added services(VAS) are non-core
services for telecom industry or in short, all
services beyond standard voice calls and
fax transmissions. value-added
services add value to the standard service
offering, spurring the subscriber to use
their phone more and allowing the operator
to drive up their ARPU
Key characteristics of VAS
• Non-core service which contributes a
minority portion to total operational
revenue
• Enhance the value of core services:
– Bringing in incremental revenue
– Stimulating revenue of core
business
– Strengthen the position of the core
service
• Increase the benefit of the core
service to the customers
Value added services (VAS) are
supplementary telecom services which
provide upon telecom network and other
telecom equipments. VAS helps to
improve the economic and functional
contribution of operators existing network.
Wikipedia
ITU

7
VAS brings Value to Reinvent Mobile
Direct benefit
• Revenue from services – this become more and more insignificant as many
services become commonplace
• Revenue from customer premises equipment (CPE) upgrade – the provision of
CPE is profitable for operators with average margins estimated at 35%
• Revenue from call stimulation – the recipient of an SMS or MMS may call the
sender
Indirect benefit
• Enhance customer retention – differentiation from competitors through a range of
unique, innovative VAS, operators can add value to their core propositions and
thus enhance customer retention
• Improve services offered by mobile operators, as they can encourage recapturing
some of the calls customers make through their mobile when they are at home

Operators need to focus on Data and VAS
Data (Mobile Broadband)
Voice & Messaging
Current Status
(ARPU)

9
VAS Ecosystem could be vast and includes both B2B and B2C
type of relationships
voice
Broadband
Data
Communication
VAS
TV
Content
Entertainment
VAS
Security
Data centers
Call centers
Connectivity
VAS
Desktop
Applications
BPO
ICT VAS
Operator
B2C relationshipB2B relationship (outsource) / In house

10
• Call forwarding
• Call barring
• Call waiting
• Voice mail
• Caller ID
Basic VAS
Entertainment
Information
Transaction
Communication
Voice VAS can be further classified into four categories
(C.I.E.T.) that go beyond simple connectivity
• Messaging
• Conference call
• Phone book
• Video calling
• Multi-number
• IP call
• Content portal
service (movie,
music, sports,
comics, games,
live TV)
• Ring back tone
Voice and
data
Service
connectivity
• Travel booking
• Restaurant booking
• Fixed payment
• Shopping
• Premium number ( toll
free number, voting
Connectivity
experience
enhancement
Beyond
connectivity
• Emergency
hotline
• Directory
service
• General news
• Weather
• Traffic
• Stock exchange
• Wake up
• Time reminder
Increasing
value chain
complexity
Increasing
operational
capability
requirement

Reasons for Increasing Importance of VAS
• Decrease in ARPU despite increase in MOU:
• With declining ARPU, the challenge is to develop alternative
revenue streams and retain customers by creating a basis for
differentiation.
• Greater need for differentiation among the service providers
• Greater competition
• Saturation in Metros and Urban cities
• Number Portability expected to come
• 3G/4G VAS:
• With added utility to mobile phone through 3G/4G, both
subscriber base and ARPU are expected to observe phenomenal
increase in the coming years

Key Drivers for VAS
Service Providers Perspective
Opportunity for bundling with other services 67%
Reducing Operational Costs 67%
Introduce New Application & Services 56%
Extension of Access Services 56%
Competition 50%
Ratified Standards 50%
Consolidated the number of Networks 39%
Legacy voice equipment obsolescence 30%
New Handsets 17%
Source: Infonetics Research

Key Attributes to Drive VAS Adoption
• Ease of Use and Experience
• Speed (low latency); Reliability; Quality of Service
• Ease of Provisioning & Configuration; OSS/BSS
• Data optimization; Network Performance
• Business Models; Ecosystem Management
• Standards based service delivery framework

Key Challenges for Service Providers
Complexity of choosing VAS mix
Ability to maximize revenue from major investments
• Balance the Portfolio with High price point vs. low cost services
• Promotion to Maximize Penetration and Adoption Rates
• Time of day promotion
Ecosystem complexity
• Content: Content Providers, Aggregators, Distributors
• Applications: Financial Institutions, Retailers, Government
• Foster business models to enable service providers, verticals and VAS
• vendors to drive adoption to manage a Win-Win business Model
Conflicting goals
• Robust internal architecture vs. low CapEx
• New 3G/4G investments vs. profitable applications on current 2G networks
• Internal transformation (siloed to distributed) vs. time-to-market

Creating a Sustainable VAS Proposition (1/2)
Capture your customer's imagination:
• Each customer is unique and has his/her own interest, requirements, wants, needs and desires.
Each unique customer reacts and responds differently to different proposition
• Innovate! Customers are constantly being bombarded by new products and services everyday
and this constant need for something that is 'out-of-the-box'
Fostering Interactivity:
• Two way communication is of absolute essence in creating a channel of communication
between the customer and you.
• It is important to interact in order to better understand the customer and continue to offer
products and services that are better suited to their needs.
Fulfilling unmet needs:
• Despite the plethora of options available to the average customer, the niche categories get
ignored. It is essential to look to these categories and create new products to engage them.
• Focus on customer service. Ensure that the products and services are creating customer
satisfaction and loyalty.

Developing sustainable revenue streams:
• Customers are attracted to different pricing models depending on their perception
of the value gained from it
• VAS providers have to offer a range of pricing models depending on demographic,
psychographic and behavioral factors
• It is essential to set price objectives according to each product and its specific target
as well as the profit potential.
• Different pricing models include flat rate, subscription based, step charging, and
bundle offers.
• Pricing models need to be created specifically for local markets to meet the needs
• It is of utmost importance that the tariff structure is transparent and is not complex
for the end customer to comprehend
Creating a Sustainable VAS Proposition (2/2)

Service Provider Business Model
More focus on growing revenue and enabling efficiencies

MNO / VAS Media in the Mix

Typical VAS Value-Chain

Critical Factors for Successfully Launching New Services
Having the right Customer
Value Proposition
Knowing how to Segment
and Target Customers
Launching the right
Products and Pricing Plans
Getting the Technology
Rollout right
1 2
3 4

21
In Conclusion … Lessons Learnt
1. Use VAS to positively influence
customer life-time value
• Manage the eco-system
• Offer range of pricing models
• Strong focus on customer service
2. Build VAS infrastructure
• Cross-selling and up-selling
• Bundling
• Simplicity
3. Foster interactivity
• Targeted promotions per segment
• Engage with your customers (two-
way communication)
• Enhance customer understanding,
segment of one
4. Re-engineer your commercial
model
• Partner
• Agent
• Powered by
• Branded
• Joint venture
5. Agile launch and optimization
cycles
• Design minimum viable
product
• Launch in agile fashion
• Optimize or sunset quickly
6. Data and insight
• Big data capability
• Data scientist role
• Inform decision-making

22
Some Operators’ VAS Examples (1/3)

23

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Any Questions?
25
ALI Saghaeian | saghaeian@gmail.com

Introduction to Mobile VAS and Multimedia Services

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