India’s telecom industry has shown strong growth. The primary reason for increasing revenues in this sector is due to the rise in wireless subscribers. Mobile phones are becoming more affordable and are viewed as a necessity today for instant communication. However, over the years the average revenue per unit (ARPU) accruing to operators has been falling, shifting emphasis to alternative means of revenue generation. This has led to growing interest in the mobile value added services (MVAS) market which is forecasted to grow by 39% annually from 2007-11.
The report begins with market overview including market size, growth and key segments. The revenue sharing model has been discussed coupled with the various delivery platforms available. A demand and supply side analysis of drivers explains factors contributing to the growth potential. The demand side drivers include increasing consumer demand, a growing medium for advertising, rising demand for regional content, growing rural market while on the supply side declining ARPU, rising mobile tele-density and the introduction of 3G based applications have boosted the market. The key challenges identified include a biased revenue sharing model, lack of awareness among consumers, dominance of prepaid customers, lack of copyright protection and authentication standards and feature rich handsets beyond the buying power of users.
The report identifies the existing trends in the Mobile VAS market including increase in PE/VC investments, growing demand for mobile music and mobile gaming, partnerships between mobile manufacturers/operators and MVAS players towards consolidating their positioning the market, the inorganic growth path adopted by major players and the growing demand from corporates for enterprise VAS.
The future outlook section discusses the various value-added services that are forecasted to grow coupled with their applicability and the corresponding user base. The major players, across the value chain, have been identified and an overview as well as the business outlook for each company has been provided.
2. Executive Summary
Estimated worth INR XX mn in 2008; expected to grow to INR YY mn in 2011
Market Value added services (VAS) accounts for a% of operators revenue
Services offered can be categorized into information, entertainment and M commerce
Drivers: Challenges:
Demand Side Supply Side Biased revenue sharing model
– Increasing consumer – Declining ARPUs Lack of copyright protection and
LE
Drivers & demand for VAS – Rising mobile teledensity authentications standards
Challenges – Medium for advertising – Introduction of 3G based
P
Dominance of pre-paid customers
– Demand for regional applications
content Lack of consumer awareness
Trends S M
– Growing rural market
A
Increased focus of PE/VC firms
Growth in demand for mobile music and gaming
Partnerships between mobile manufactures/ operators & MVAS players
Lack of purchase of feature rich handsets
Growth via acquisitions
Strong demand from corporates for enterprise VAS
A highly fragmented market with many small and medium sized companies
Domestic Players Foreign Players Content Technology
Aggregator
Provider/Creator Enabler
Competition • A •X
•B •Y •X •Y •Z
•C •Z •U •V •W
•A •B •C
MOBILE VALUE ADDED SERVICES – INDIA.PPT 2
3. • Introduction
• Market Overview
• Drivers & Challenges
• Trends
• Future Outlook
• Competition
• Key Developments
MOBILE VALUE ADDED SERVICES – INDIA.PPT 3
4. Indian Telecom Market has been growing with rapid increase in
CDMA and GSM mobile subscribers
Overview Mobile Subscribers (2008)
•Total Revenue mn
2008 – USD XX bn GSM E
200
•Total Subscribers – U mn (2008) 150 CDMA
D
LE
Fixed Subscribers - V mn 100 C Y
Mobile Subscribers - W mn B X
P
50 A V W
U
•Tele-density: a% (March 2008) 0
•Projections:
SAM
Total revenues to increase to USD YY bn by
2012
2004 2005 2006
Wireless Operators Market Share (Mar’ 09)
2007 2008
Company 1
Tele-density of the country to go up to b% a%
by end of fiscal year 2009-10 g% Company 2
Company 3
X mn mobile connections by 2012
b% Company 4
Y mn GSM subscribers by the end of 2009 Company 5
f%
Company 6
e% c%
Company 7
d%
Source:
MOBILE VALUE ADDED SERVICES – INDIA.PPT 4
5. Mobile Value Added Services market is growing strongly with
demand for entertainment services dominating the market
Overview Data and Voice Break-up
• Mobile VAS market is worth INR XX bn in 2008 and is Data
Share of data
forecast to reach INR YY bn in 2011 Voice revenue is increasing
• Mobile VAS accounts for a% of mobile operator’s 100% u% v% w% x% y%
revenues
80%
• Mobile VAS can be categorised as –
LE
60%
Information - News alerts, stock prices, air/rail ticket status, a% b% c% d% e%
bank account balance/transaction alerts etc. 40%
(CRBTs), wallpapers, games, jokes etc.
M-Commerce - M-payment, M-banking etc.
MP
Entertainment - Songs, ringtones, caller ring-back tones 20%
0%
2004 2005 2006 2007 2008
Market Segmentation
2004 SA Video/TV
Ringtones/
MVAS Market Size & Growth
INR bn
200
SMS VAS
Non-SMS VAS
2005 E
Graphics
2006 Music 150 a% D
y%
2007 Information C
100 x%
Services
B w%
2008(e) Games A
50 v% d%
u% c%
2009(e) Segment X to b% b%
a%
witness highest 0
0% 20% 40% 60% 80% 100% growth 2007 2008 2009(e) 2010(e) 2011(e)
Source:
MOBILE VALUE ADDED SERVICES – INDIA.PPT 5
6. Drivers
Increasing Consumer Growing Medium for Increase in Demand
Growing Rural Market
Demand for VAS Advertising for Regional Content
Demand Side
Drivers
Supply Side
Rising Mobile Tele- Introduction of 3G
Declining ARPU
Density Based Applications
MOBILE VALUE ADDED SERVICES – INDIA.PPT 6
7. Challenges
Biased Revenue
Sharing Model
Feature Rich
Handsets beyond Lack of Awareness
the Buying Power among Consumers
of Users
Challenges
Lack of Copyright
Protection and Dominance of
Authentications Prepaid Customers
Standards
MOBILE VALUE ADDED SERVICES – INDIA.PPT 7
8. Key Trends
Increased Focus of PE/VC
Firms
Strong Demand from
Growth in Demand for
Corporate for Enterprise
Mobile Music and Gaming
VAS
Trends
Partnerships between
Growth via Acquisitions Mobile Manufactures/
Operators & MVAS Players
MOBILE VALUE ADDED SERVICES – INDIA.PPT 8
9. Introduction of A and the growth in demand for B will boost the
market
Introduction of 3G Top Applications in 2008
Change in revenue model
Technology
U
V
W
• Operators share
• Auction for 3G is X expected to decline
expected to take
Z to b%
place in FY 20-- - --
• Other players across
• Will boost mobile
the value chain
broadband Top Applications in 2010 accounting for
penetration as it will
almost c%, as
allow for high speed U compared to a%
data transfer
V currently
X
B
a% of subscribers (approx. X mn) C MVAS is expected to account for
using high-end phones can be
x% of operator’s revenues by 20--
SAMPLE
targeted
Source:
MOBILE VALUE ADDED SERVICES – INDIA.PPT 9
10. A highly competitive market with players constantly developing
services to capture market share
Overview Market Share
•The market is highly fragmented with a large
number of domestic players
There are more that X companies registered with Company 1
the Internet and Mobile Association of India a%
LE
(IMAI) as VAS enterprises
•Many domestic players have also presence in Company 2
P
b%
the international markets
SA
with a% of revenues from overseas
M
Company Y has presence in more than A countries
Company Z services are available in USA, Ireland,
UK, Spain, South Africa, UAE, Sri Lanka and Others
d%
c% Company 3
Singapore
•Foreign players have also entered the
domestic market to capitalize on the profit
incentives
•Major players
Domestic – Company 1, Company 2, Company 3
Foreign – Company 4, Company 5, Company 6
Source:
MOBILE VALUE ADDED SERVICES – INDIA.PPT 10
11. Thank you for the attention
The Mobile Value Added Services report is a part of Research on India’s Telecom Industry
Series.
For more detailed information or customized research requirements please contact:
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MOBILE VALUE ADDED SERVICES – INDIA.PPT 11