By: Ian Mansfield | 31st Jul 2011
The mobile value-added services (VAS) market in India is set to reach INR671 billion (US$ 15 billion) by 2015, when it will account for 31% of overall wireless revenue, according to the newest report from Analysys Mason in partnership with the Internet and Mobile Association of India (IAMAI).
The report states that the Indian mobile VAS market will commence to grow rapidly in the next two years. This procedure has already been set in motion as multiple structural elements fall into spot, such as increases to data access speeds, smartphone and feature telephone penetration, and the maturity of the content ecosystem.
Kunal Bajaj, Head of Analysys Mason’s India office and lead author of the report, stated: “Carriers are under tremendous pressure from competition and declining ARPUs, which have stunted revenue growth. Current trends in the sector indicate that now is the correct time for them to boost their focus on the VAS space to locate new opportunities for differentiation and earnings.”
The report’s important findings include:
- Carriers are increasingly focusing on non-voice services to drive revenue growth as voice services turn into commoditized. Throughout the next 5 years, VAS ARPU will improve by 48%, which will compensate for the 14% decline in voice ARPU. As a result, overall ARPU will stabilize and decline by only 4.5% in between 2011 and 2015.
- Mobile data will emerge as the next ‘killer application’, accounting for 32% of total incremental wireless revenue — primarily driven by the latent demand for connectivity, which wireline broadband has been unable to address since of availability issues.
- Mobile commerce will represent an INR20 billion revenue chance by 2015.
- Utility services that can present a scalable, technology-enabled solution to issues around access to details, chance and infrastructure (for example, healthcare, education and agricultural/husbandry suggestions) can add significant value and, as a result, improve the value proposition for users — particularly those in rural locations.
- Mobile video has been promoted as the key differentiator on 3G networks, but the restricted amount of allocated spectrum (5MHz) and associated capacity constraints will limit video-based services in particular segments and geographies.
