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Bruised by the tariff war, the operators in South Asia, including India are seeking relief in the revenues from value added services. Now the focus is likely to shift from simple services, like caller ring back tone to premium content-mobile entertainment.

According to a recent Frost & Sullivan report, in India-which is one of the fastest growing markets in the region-the mobile VAS market is set to grow at a bullish rate of 16.6% from 2008 to 2015.

It is because of this pace of growth of VAS, Indian market is seeing several small VAS players and aggregators giving a tough fight to the stronger players in the space. Keeping in mind the potential of mobile entertainment, some VAS providers have been dedicating focus on their strengths like direct-to-consumer (D2C) mobile content.

ROK Entertainment Group has launched TINY TV across India, in partnership with BSNL. Priced at Rs 150 per month, TINY TV is a subscription based mobile TV service in the country, to be streamed over 2.5G networks.

Currently, 3%-4% of mobile VAS revenues are driven by entertainment services like music and gaming on mobile handsets. A number of Internet giants are also capitalizing on mobile entertainment to gain access to a captive user.

The mobile entertainment segment is set to see a surge when 3G becomes a rage in India. At present, PSU operators-M TNL and BSNL are offering 3G services, that include video streaming and mobile TV. Once 3G battle is open to private players, mobile entertainment is likely to get a further push.

The research agency observes that the mobile VAS market in South Asia and Middle East is anticipated to exhibit a strong to moderate growth, owing to untapped potential for VAS in these regions, 3G networks proliferation, and a saturation of revenues, and adoption of plain vanilla mobile voice services. The market is also expected to witness the emergence of stronger mobile VAS content providers/aggregators, with the ability to grasp better revenue shares from the mobile operators.

Another hot telecom market in India is Pakistan. Frost & Sullivian estimates the CAGR of mobile VAS market here will be 16.8 % between 2008 and 2015.

Saudi Arabian mobile market has a high mobile penetration. However, the country still witnesses steady year-on-year growth in this sector. VAS market is expected to exhibit CAGR of 10.6% between 2008 and 2015.

Sri Lanka has a relatively moderate mobile user penetration of 42.4 %; hence there is good potential for growth. 3G services such as Video SMS, Dial and Watch TV have been introduced.

UAE has one of the highest mobile subscription penetrations in the South Asia and the Middle East region. Mobile operators there are increasing their focus on revenue streams from VAS and mobile TV and mobile Internet. Mobile VAS market is estimated to exhibit CAGR of 11.9% between 2008 and 2015.

The Egyptian mobile market still possesses a sizeable under-penetrated addressable market, thereby providing avenues for growth. Relatively strong CAGR of 14.1% is estimated for the mobile VAS market in Egypt between 2008 and 2015.

Heena Jhingan

heenaj@cybermedia.co.in