Global Mobile VAS Revenue Slowdown, Says Industry Analysts Ovum. What Should Mobile Operators Do?

According to industry analyst firm Ovum, revenues from global mobile VAS solutions will grow at a reduced rate between 2010 and 2017. Europe in particular will be hardest hit, with revenues experiencing a negative CAGR of -7%.

This is bad news for operators that have invested in VAS solutions to help offset revenue decline in traditional voice services. These investments have been based on the expectation that users will pay incremental fees for additional and attractive services. In some markets, this is true – and also for some services. But mobile operators are increasingly confronted by strong competition from OTT providers offering richer content and services for free. In this context, mobile operators cannot simply keep competing on the same terms and with similar services. The question must be asked: what can European mobile operators do?

The answer is to focus on VAS solutions for which there are fewer OTT competitors and fewer free offers. Instead of targeting traditional VAS opportunities that are clearly offering diminishing returns, mobile operators need to consider markets and services that offer the potential for growth.

All of which sounds obvious and it raises the question, why aren’t they doing so? Well, perhaps they don’t know where to look. Enterprise and SME markets represent considerable growth opportunities – Infonetics has reported 17% revenue growth from hosted VoIP and UC services. This is an extremely promising market for mobile operators and it’s one that is easy to address, as we have seen from the experience of our customers.

Instead of fighting with OTT providers to offer services that have little or diminishing value, mobile operators should seize the opportunity to strategically prioritise markets where customers are willing to pay. And, in almost all cases, that means enterprise and SME customers who want and need quality services – and are prepared to pay for them. Free is fine for consumers, but is not a sustainable model for enterprise customers.

If the answer is to focus more on enterprise and SME customers and their needs, then operators may need help in order to do so. Why not talk to Gintel and see how we can share our expertise in delivering smart business communications solutions that enable operators to successfully target enterprise and SME users?

Infonetics, Ovum, VAS Solutions

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