The mobile value added services (MVAS) market in China is valued at 18.2 bn in 2008 it is expected to reach INR 34.5 bn in 2011. Netscribes’ report begins with a snapshot of China’s mobile market. It analyses the MVAS value chain and provides information regarding the popular MVAS services. Market entry procedure describes entry procedure for a foreign investor in the Chinese MVAS market. The report also highlights key government regulations. Market overview gives a brief overview of the existing scenario with market size and growth figures as well as data for VAS’s share of total revenue of major mobile operators. An analysis of drivers reveals that increasing mobile penetration, growing popularity of mobile entertainment, rising income levels, declining ARPU and introduction of 3G is driving growth in this sector. The key challenges identified include dependency on telecom operators, competition from free WAP sites, and billing and transmission failures. The competitive landscape profiles the major players in this sector. The report also provides details regarding the key developments in this sector.

1. Mobile Value Added Services - China
January 2010

2. Executive Summary
MVAS market in China is valued at USD XX bn in 20- -; expected to reach USD YY bn by 20- -
At present, a% of the mobile consumers are using mobile value-added services
Market
SMS and Caller Ring Back Tones (CRBT) are the two most popular MVAS services in China
MVAS providers rely primarily on mobile operators to provide billing and collection services
Drivers:
–
PLE
Increasing mobile penetration
Challenges:
– MVAS providers are highly dependent
Drivers &
Challenges
–
–
–
–
M
Growing popularity of mobile entertainment
A
Rising income levels
S
Declining ARPU
Introduction of 3 G
on telecom operators
– Competition from free WAP sites
– Billing and transmission failures
Market comprises of four types of MVAS players
Internet Portal
Pure MVAS Players Telecom Operators Niche Service Provider
Operators
Competition Company 1 Company 2 Company 3 Company 4
Company 5 Company 6 Company 7 Company 8
MVAS firms also face competition from free WAP portals
Relationship between mobile operators & MVAS firms is changing from cooperation to
competition
MOBILE VALUE ADDED SERVICES – CHINA.PPT 2

3. •Introduction
•Value Chain and Services
•Market Entry Procedure
•Government Regulations
•Market Overview
•Drivers & Challenges
•Competition
•Key Developments
MOBILE VALUE ADDED SERVICES – CHINA.PPT 3

4. The Chinese mobile market has the world’s largest
subscriber base and it is growing at a% annually
Mobile Market in China Mobile Subscribers
•The Chinese market has three mobile mn
operators with China Mobile dominating: 800 b%
zz
LE
Company A yy
600
Company B xx
P
400
Company C
M
200
•Total Revenues: China’s three main telecom
A
firms attained a combined revenue of USD XYZ 0
S
bn in 20-- 2006 2007 2008
•Total Subscribers: ABC mn (20--)
Wireless Operators Market Share (20--)
Mobile subscribers account for ab% of total
subscriber base Company C
z
•Prepaid to Postpaid ratio - a:b Company B
•Projections 2010: y
Telecom business volume: xy% growth
Business revenue: c % growth
AB mn mobile subscribers
x
Company A
Source:
MOBILE VALUE ADDED SERVICES – CHINA.PPT 4

5. MVAS is growing at b% annually as operators diversify
revenues from non-voice services to offset declining ARPU
Market Overview Market Size and Growth
• Mobile operators in China have been aggressively
USD bn
promoting MVAS to offset the decline in Average
Revenue Per User (ARPU), which is predominantly 40 z
LE
voice-based revenue 30
xy%
P
• At present, a % of mobile consumers use MVAS y
20
• SMS and Caller Ring Back Tones (CRBT) are the two
M
x
most popular MVAS Services in China 10
% Revenue 2008
SMS
CRBT
Company A
ab%
de%
SA Company B
bc%
ef%
0
2006 2008
VAS’s Share of Total Revenue
2011
Company A
• Advanced MVAS services based on WAP/
Company B
MMS/Java/BREW platforms are also becoming
Company C b% e%
popular
• Currently, China’s mobile operators deliver their
services through 2 & 2.5G wireless standards
d%
MVAS market in China is evolving from 2G services to 2.5G a%
and will continue with 3G standards
• MVAS providers rely primarily on mobile operators to n/a c%
provide billing and collection services 2007 2008
Source:
MOBILE VALUE ADDED SERVICES – CHINA.PPT 5

6. Drivers - Summary
Growing popularity of Mobile
Increasing Mobile Penetration Rising Income levels
Entertainment
Demand Side
Drivers
Supply Side
Declining ARPU Introduction of 3G
MOBILE VALUE ADDED SERVICES – CHINA.PPT 6

7. Challenges - Summary
MVAS providers are highly
dependent on telecom
operators
Challenges
Competition from free WAP
Billing and Transmission Failures
sites
MOBILE VALUE ADDED SERVICES – CHINA.PPT 7

8. Major Players (3/8)
Player Business Description
Company 1 • It provides a wide range of entertainment services
• It offers a variety of games via the mobile platforms
LE
• It provides its products and services in over XY companies, covering over AB countries or
regions
Company 2
P
• It develops and distributes wireless games and other entertainment applications across a
M
range of platforms which include SMS, WAP over GPRS, BREW and Java
Company 3
A
• Its portfolio is based on original content as well as joint development with content partners
S
• The company was founded in 20-- and is based in Location 1, China
• It is online distributor of music and music-related products such as ringtones, ring-back-
tones, and true-tones to mobile users in China
• The company primarily operates in Location A, Location B and Location C
• It is headquartered in Location Y and employs around X people
• It merged with web-based online video portal ABC Limited in Nov 20--
Financials:
• It recorded revenues of USD XYZ mn and an operating loss of USD ABC mn in the 20--
Source:
MOBILE VALUE ADDED SERVICES – CHINA.PPT 8

9. Thank you for the attention
The Mobile Value Added Services – China report is part of Netscribes’ Telecom Industry Series.
For more detailed information or customized research requirements please contact:
Gagan Uppal Gaurav Kumar
Phone: +91 22 4098 7530 Phone: +91 33 4064 6214
E-Mail: gagan.uppal@netscribes.com E-Mail: gaurav.kumar@netscribes.com
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MOBILE VALUE ADDED SERVICES – CHINA.PPT 9