VAS touted for operator growth in emerging markets

VAS touted for operator growth in emerging markets

12 JUN 2014

LIVE FROM MOBILE ASIA EXPO 2014: Executives from emerging market operators stressed the importance of value added services (VAS) for driving continued growth of their businesses.

Thomas Hundt (pictured), CEO of Smart Axiata in Cambodia, said low fixed internet penetration has “meant the mobile internet is kicking off quite quickly” in the country, while more than 50 per cent of devices sold in 2013 were smartphones — trends that enable a range of VAS activity.

The Cambodian number two is looking to build alternative revenue streams and boost customer loyalty by providing services that “fit around consumers’ behaviour” and are unique to Smart in what is a largely prepaid market.

As part of this strategy, Smart offers content streaming, ring tones, premium SMS services, the ability for customers to gain an advance on their balance (SmartLoan), and access to popular apps on feature phones (SmartBox).

The operator is also embarking on content play and enabling customers to use their mobile numbers for identity. It even offers the ability to purchase insurance via their mobile device.

An area of development is digital services, encompassing mobile advertising, mobile money, mobile and e-commerce, entertainment and M2M.

Such has been the success of Smart’s VAS strategy it now has a 31 per cent share of non-voice revenue in Cambodia. “At the end of the day these are all small parts of the puzzle to create retention,” Hundt said.

With voice not subject to substitution by OTT services and SMS never a huge revenue generator for Smart, Hundt welcomed the arrival of OTT messaging players as their presence would drive mobile usage without harming existing revenue. “In this case it’s better to collaborate,” Hundt said.

Voice remains an important revenue driver for Smart, however: “We need to milk the voice cow as long as we can do that,” Hundt said.

Nicholas Swierzy, chief strategy officer for Ooredoo Myanmar, said his company plans to make an impact in the newly-opened up market, by quickly moving beyond phone and text.

Ooredoo plans to introduce its IdeaBox programme in which developers work with the operator to achieve network interoperability for services and apps.

This will be critical in developing local content, according to Swerizy, who said: “We’ve taken a real grass roots approach to really understand what the needs of the country are beyond connectivity,” Swierzy said.

Like Smart Cambodia, Ooredoo is expecting traction for OTT services, a major reason why it decided to build an all-IP 3G network, which will go live in the third quarter of the year.

Sundeep Kathuria, EVP for policy and regulation at Vodafone India, said operators looking at a VAS strategy in emerging markets need to “deep dive into market segments [and] look into social factors and consumer requirements”.


Tim Ferguson

Tim joined Mobile World Live in August 2011 and works across all channels, with a particular focus on apps. He came to the GSMA with five years of tech journalism experience, having started his career as a reporter... More

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