Mobile Value Added Services (M-VAS)


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Please email me at "saghaeian [AT] gmail [DOT] com" for any request on VAS research & consulting.
This presentation includes topics such as Market Overview, Global & Regional Trends, Market Developments & Services, Different Mobile Value Added Services, How to Differentiate and Monetizse the Mobile Networks, Importance of VAS, Segmenting the VAS Market, Mobile VAS Growth Market Characteristics, Key Attributes to Drive VAS Adoption, Key Drivers for VAS, Key Challenges for Service Providers, How to Build the VAS Proposition, Creating a Sustainable Proposition, Rethinking VAS Value-Proposition, Mobile VAS Value Chain, Mastering new business models, Service Provider Business Model, Growth Opportunities with New Services, Barriers for Uptake of New Services, Strong Drivers for New Services and Critical Factors for Successfully Launching New Services.

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Mobile Value Added Services (M-VAS)

  1. 1. Mobile Value Added Services (M-VAS)Offering New & Differentiated Services Ali Saghaeian Chief Analyst, Teyf Group
  2. 2. Agenda• About Teyf Research & Consulting Group• Market Overview & Trends• Mobile Value Added Services (M-VAS)• VAS Drivers and Challengers• Building Sustainable VAS Proposition• VAS Value Chain and Business Model• Emergence of New Services 2
  3. 3. Who We Are• One of the Few Professional consultants in telecoms; focused on emerging markets.• Unique Mixture of Different Skills and Expertise (from scientific studies to analytic, from consulting to holding conferences, Publishing Magazine & Web-site)• 10 Years of Impeccable Track-Record with our professional analysts’ research programs accomplished in bringing full satisfaction of client organizations• The Most Cited Sources in the Telecoms Business Media and among equity research specialists• Intelligence on the Local Telecoms Market (Teyf Group is famous as Iran telecom think tank)
  4. 4. Our Services Statistics and Data Research Articles• Teyf Database Service provides Providing latest analytical articles ofthe latest news and statistics the most valid national andabout Telecom sector. The international sourcesservices are as follows:• Mobile, WiMAX, VAS, M-Payment, IPTV, . . . Information on Iran Telecom• subscribers statistics• Prediction (subscriber This service provides latestbase, penetration) information, analyses, and• Information about operators statistics of Iran Telecom which • Operators licenses cover these sectors: • Operators market share • Mobile • Operators key indicators • Fixed (ARPU, Churn, Minute of Use) • Broadband• Information about Vendors • VAS
  5. 5. Recent Projects 2008-10 2008-9 CRA CRAPreparing Complete & Compliant Preparing Iran’s 3rd Mobile OperatorRegulatory & Technical Criteria for Tender DocumentsWiMAX Licensing Preparing Complete and CompliantTechnical and Business Evaluation of Regulatory and Technical Criteria forMobile WiMAX Licensing in Iran Mobile Number Portability 2009-10 2010-11 Preparing IPTV Business Model forSupporting MMD (Ireland) & MTN- Iran Broadcasting (IRIB)Irancell in Preparing Commercial Mobile TV Technical and BusinessDue Diligence of 2 Iranian ISPs market analysis
  6. 6. Market OverviewEvolution of Global Market Drivers 6
  7. 7. Market Overview: Global Trends 7
  8. 8. Global & MEA Market Trends Expected growth in Personal Communications, Mobile Entertainment, Mobile Commerce and Mobile Enterprise categoriesGlobal MEAMobile Social Networking Online User Generated Content and SocialRevenues could reach $52 billion by Networking Community gaining2012, with CAGR of 30-50% popularityMobile Entertainment Music downloads to reach over 45 millionRevenue to reach over $84 by 2013billion by 2012 Gaining interest in location based servicesMobile location based services (family or friends tracker; trafficRevenue to reach $13.3 billion by 2013 information)Mobile Payments Micro payments to reach about $5B byover 20B transactions by 2011 2013Sources: Informa Telecoms & Media, Juniper Research, ABI Research, Motorola, IE Market Research Adoption rates, regional differences and interoperability creates risk!
  9. 9. Trend of Market Development -- Reduction of Voice ARPU Revenue Architecture of Global Operators ARPU Trend of European Operators In next 2 years, the revenue of the operators will increase by 12% Voice ARPU is decreasing, while DATA ARPU is increasing
  10. 10. Current Services Still Some Money to Make World wide Mobile Entertainment revenue share by Content/Service type 2007 2012 Total= $15.4B Total= $35.8BSource: IDC 2008 Growth is there in both current and future content revenue models 10
  11. 11. Comparison of Most Popular Mobile Phone Activities in GCC and Europe● It is evident that proportion of data service users is higher in Europe vis-avis GCC.● Voice calling and SMS dominate in both regions, though the order is reversed. As we look down the top-ten list we see broad similarities. e.g, music, games and multimedia services like MMS feature strongly on both. 11
  12. 12. Youth Drives Usage of Services or Features beyond Voice and SMS Unforeseen Efficiency/Interaction Safety Integrated events Beginner Normal user Advanced user Super advanced userMake/receive calls (talking) Make/receive calls (talking) Make/receive calls (talking) Make/receive calls (talking)Send/receive SMS Send/receive SMS Send/receive SMS Send/receive SMS Send/receive missed calls, beeps Send/receive missed calls, beeps Send/receive missed calls, beeps Camera function to take pictures Camera function to take pictures Camera function to take pictures Use calendar/diary function Use calendar/diary function Use calendar/diary function Camera function to take video clips Camera function to take video clips Listen to music/MP3 player Listen to music/MP3 player Play games on mobile Play games on mobile Bluetooth Bluetooth Check voice mail Use handsfree or headset Tendency Listen to radio (FM or operator) Older Younger
  13. 13. Mobile Value Added Services Differentiate & Monetize Mobile NetworkFrom basic communication and information needs to bringingmore and more entertainment & utilities to consumers throughhandsets, PCs or special terminals, at any place and at any time
  14. 14. Why VAS is ImportantIn mobile telecommunication industry, VAS is defined as services thatare:1. Not part of the basic voice offer.2. Allow the mobile operators to develop another stream of revenue. Category VAS Category Characteristic ExampleEntertainment designed for mass Games, Caller Ring Back appeal Tone (CRBT), music download. Info characterized by the SMS ,Stock Update, useful information Location Based Service (LBS).M-Commerce services involving M-banking and m-payment monetary transaction using the mobile phone
  15. 15. 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 in Iran• 3G VAS: – With added utility to mobile phone through 3G, both subscriber base and ARPU are expected to observe phenomenal increase in the coming years 15
  16. 16. VAS standing on 4 Pillars 16
  17. 17. Segmenting the VAS Market• Try understanding your customers• Times have changed Don’t offer everything to everyone• Try different methods of selling for different people• Change the Packaging
  18. 18. Mobile VAS Growth Market CharacteristicsThe Yes Butters The Why Notters First internet experience through mobileRegulation not clear for VAS deviceDifficult to source local content Hungry and active mobile usersNo international intellectual rights High response rates to advertisingrepresentativesNo standards add to slow implementation Personal relationship with operatorsNo well defined billing and consolidation Shape the market as partnerstandardDifficult to legally enforce agreements Missing alternative payment methodsNot possible to generate enough revenue from Few competitors, means higher marginsadvertising model 18
  19. 19. 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
  20. 20. Key Drivers for VASService Providers PerspectiveOpportunity 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
  21. 21. 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
  22. 22. How to Build the VAS Proposition
  23. 23. Creating a Sustainable PropositionCapture your customers 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-boxFostering 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.
  24. 24. Creating a Sustainable Proposition (Cont.)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
  25. 25. Rethinking VAS Value-PropositionApproach the situation in 3 phases: – Build VAS infrastructure • Bundling • Cross-selling and up-selling • Pricing per segment • Promotions per segment – Use VAS to positively influence customer life-time value – Re-engineer the commercial model and overall ecosystem 25
  26. 26. Mobile VAS Value Chain
  27. 27. Typical VAS Value-Chain 27
  28. 28. Typical VAS Value-Chain (Alternative View)
  29. 29. Framework for Rapid VAS Service Creation
  30. 30. Mastering new business models From simple to complexOperators ConsumersContent & serviceproviders Advertising
  31. 31. Service Provider Business ModelMore focus on growing revenue and enabling efficiencies
  32. 32. Growth Opportunities with New Services Mobile AccessMobile • USB DonglesAccess • Broadband connectivity enabled mobile phones Social NetworkingSocial • Mobile BloggingNetworking, • Media sharing e.g. pictures andCommunities profiles • Online communities Advertizing, Mobilized MediaAdvertizing, • Mobile advertising toMobilized users, Location based infoMedia • Mobilized media
  33. 33. Barriers for Uptake of New Services• Usability and usefulness• Handset restrictions• Limited content• Service performance• Cost• Lack of critical mass• No need
  34. 34. Strong Drivers for New Services Marketing Friends or others use it ConvenienceCuriosity Best option at the moment Time to kill
  35. 35. Critical Factors for Successfully Launching New Services1 2 Having the right Knowing how to Customer Value Segment and Target Proposition Customers3 4 Launching the right Getting the Technology Products and Pricing Rollout right Plans
  36. 36. Thanks for attention! Ali Saghaeian Chief Analyst, Teyf Group Mobile: +98 913 391 2982