3G to Accelerate Mobile VAS Market

by Muntazir Abbas    Jan 15, 2009

The VAS market is growing in tandem with mobile telephony services in the country, today. VAS broadly refers to content-based services that vary from voice business, wherein the service providers can charge as per usage or application. However, the VAS consumption is largely derived by youth, who do more on P2P networking, mobile entertainment, and gaming. With the arrival of 3G services, the mobile VAS market is all set to grow multifold.

Analyst iSuppli estimates India’s wireless subscribers will grow to 715 million by the end of 2012, while VAS could contribute more than 25% of the total cellular revenues by 2012.

The studies from various sources worldwide project the value of mobile data market to touch $10 billion by 2010. On the gaming front, NASSCOM and the US research firm InStat/MDR finds out that India’s wireless-game market is expected to generate annual revenue of around $335 million by 2009. More than 50% of the total mobile phone subscribers use VAS, this includes games and ring tones- the study suggests.

"The arrival of 3G is significant to the VAS market in India. It could offer additional opportunity to those who want to do more on information front", said Shahab Khan, training manager with Tata Indicom. It will facilitate data search services, including Yellow Pages and GPRS- based services that comprises of M-Newspaper, mobile locator, picture downloads, JAVA- enabled content and games, he said.

The VAS services can be broadly divided into two major categories where as the revenue sharing is around 1:4 between these. However the least contribution comes in from the services that include caller back tones (CRBT), games, downloads, ring tones and wallpapers, while the second vertical is query-based SMS that includes content services, contests, rail queries, news updates, polls, surveys, m-banking, multilingual messaging, SMS alerts, InsuranceManager, and chain and multilingual messaging.  

The VAS market can be categorized into entertainment, infotainment and m-commerce. While the growth in m-commerce segment is sluggish that can be attributed to the apprehension of conducting transactions on mobile, as well as lack of awareness. But however, Juniper Research in its latest study reveals that the number of mobile phone subscribers that use their phones for mobile banking transactions will exceed 150 million globally by 2011.

"The demand for value added services is high, and it will soon become a part of our daily life", said Nehal Maniar, senor vice president at C-SAM Solutions, which operates as a joint venture with MeraMobi. Mobile content revenues are expected to grow from $23 billion in 2008 to $52 billion by 2013 according to Juniper. The research firm suggests that under the On-Portal model, content providers will see their share of the market rise from 54% in 2008 to 68% by 2013, providing they can secure more attractive terms from MNOs.


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