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Revenues from VAS Set to Grow Strongly on Platform of Innovative Services and Customised Solutions Finds Frost & Sullivan - Will value-added services become a new revenue source for telecommunication service providers in sub Saharan Africa?
Revenues from VAS Set to Grow Strongly on Platform of Innovative Services and Customised Solutions Finds Frost & Sullivan

 

NewswireToday - /newswire/ - Cape Town, South Africa, 2011/11/22 - Will value-added services become a new revenue source for telecommunication service providers in sub Saharan Africa?.

   
 
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Value-added services (VAS) in the mobile and emerging fixed-mobile converged service markets have shifted from being a customer retention tool to becoming a new source of revenue for network operators and internet service providers.

To effectively face the challenge of declining average revenue per user (ARPU), and to maintain their market shares, network operators have adopted the strategy of offering VAS in addition to traditional voice, SMS, and internet connectivity services. The nascent VAS market is expected to grow strongly through innovative services and customised solutions.

New analysis from Frost & Sullivan (wireless.frost.com), Strategic Analysis of Value-added Services Best Practices in Selected Sub Saharan African Countries, finds that multimedia services, such as mobile entertainment services and enterprise solutions, including software as a service (SaaS) based telemetry services, will boost revenue prospects.

"Multimedia VAS, which include music, ringtones, and game downloads, are expected to be the primary mass market driver," explains Frost & Sullivan's Information and Communication Technologies Research Analyst Jiaqi Sun. "These services are based on SMS/MMS, USSD, IVR, Web, or combinations of these mediums, and add value by providing consumers with new experiences of mobile services."

VAS targeting enterprises concentrate on applications that enhance their operating efficiency through cost-effective deployment of enterprise communication solutions. Telemetry services, such as fleet management and mobile VPN, are examples encouraging the uptake of enterprise mobile services.

Despite the growth potential of VAS, areas of concern remain. For instance, the offer of VAS requires additional resources, which are often drawn from more profitable areas.

"The development of VAS requires network operators to set aside additional resources, which are typically allocated to more profitable business areas," explains Sun. "These resources can otherwise be used to generate quick revenue in other segments in the short term."

Network operators are also restrained by their limited ability to develop new technologies and content to achieve minimal time-to-market of new VAS. To offer VAS, network operators are required to build partnerships with content providers and application developers, which increases the time-to-market of new services and results in the loss of competitive advantages.

"The low penetration rate of advanced handsets is a barrier for network operators to offer high-end VAS," adds Sun. "Multimedia and other high-end VAS often require customers to own advanced handsets and multiple devices, which are expensive in the African market."

To maximise growth potential, network operators should focus on providing services or solutions with a higher value-to-price ratio than competitors. VAS can be offered either standalone or as part of service bundles, with more content or lower prices to enhance customer value.

"Moreover, network operators should provide practical and efficiency-enhancing services, as these services are stable, easy to operate, and improve productivity and team work," concludes Sun.

If you are interested in more information on this study, please send an e-mail with your contact details to Samantha James, Corporate Communications, at samantha.james[.]frost.com.

Strategic Analysis of Value-added Services Best Practices in Selected Sub Saharan African Countries is a part of the Market Insights – Mobile & Wireless Communications subscription, which also includes research on: Strategic Analysis WiMAX, LTE and CDMA in Sub Saharan Africa, Strategic Analysis of Cloud Computing Market in South Africa and Strategic Analysis of the Unified Communications Enterprise Markets in Selected Sub Saharan African Countries. These Market Insights are part of Frost & Sullivan Growth Partnership Service.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents.

Strategic Analysis of Value-added Services Best Practices in Selected Sub Saharan African Countries / 9838-65

 
 
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Revenues from VAS Set to Grow Strongly on Platform of Innovative Services and Customised Solutions Finds Frost & Sullivan

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