Global mobile value added service revenues are set to grow at a slow pace between 2013 and 2018, with a compound annual growth rate of 10 percent, according to Ovum.
“The largest share of revenues will come from the Asia-Pacific region, at 13 percent CAGR,” said Ovum analyst Neha Dharia. “The second region with significant growth is the Middle East and Africa, with a CAGR of 12 percent.”
The African market shows the greatest potential, given that it is still in the early stages of development and has lower revenues than the rest of the world, Ovum says.
But definitions are a new issue. Traditionally, value added services have been ancillary features and services that enhance the use of the core service. In the past, that has meant enhancing voice in some way. These days, some former ancillary services arguably have become staples in their own right, such as text messaging. And, in principle, value added services apply to other core services such as video entertainment and Internet access.
For that reason, the Ovum research suggests services based on mobile entertainment and mobile utility will be key, in part because Africa is a mobile-first market, and also partly because text and multimedia messaging, once considered ancillary value added services, now are considered staples.
Ovum suggests mobile personalization services will be important in the Asia-Pacific region. In the less-developed parts of Asia-Pacific, operators will have to create services that compete with over the top alternatives, though.
But some revenue also will come from mobile TV, connected home services, security, payments, and digital games, the “new” value added services.
And that is probably worth noting. Over time, the definition of what a “value added service” is will change. Many would not consider text messaging to be in that category any longer. And even some new services, such as home security or home automation, would be considered “new services,” not necessarily “ancillary” services that traditionally are value added parts of a core offer.
Likewise, many would not consider mobile payments systems such as Isis, the mobile wallet owned by AT&T, Verizon Wireless and T-Mobile US to be “ancillary,” but a new line of business. By definition, that is not a value added service.
So some of us would argue the revenue magnitude, and growth rates, of true “ancillary” or value added services could be smaller than many forecast. By definition, home security, mobile payments and mobile TV are “new services,” and not ancillary to an existing core service.
Edited by Alisen Downey