Indian VAS Market Worth INR671bn by 2015

The mobile Value Added Services (VAS) market in India is set to reach INR671bn (£9bn) by 2015, when it will account for 31 per cent of overall wireless revenue, according to the latest report from telecoms, media and technology analyst, Analysys Mason in partnership with the Internet and Mobile Association of India (IAMAI).

The report, Evolution of Mobile VAS in India, was developed after detailed discussions with more than 50 key players across the telecoms industry in India, including leading operators, technology platform providers, original equipment manufacturers (OEMs) and VAS players. India’s Minister of State Communications and IT, Shri Sachin Pilot, released the key findings of the report at an event hosted by Analysys Mason and the IAMAI in New Delhi.

The report states that the Indian mobile VAS industry will start to grow rapidly in the next two years. This process has already begun, as multiple structural elements fall into place, such as increases to data access speeds, smartphone and feature phone penetration, and the maturity of the content ecosystem.

The report notes that carriers are increasingly focusing on non-voice services to drive revenue growth as voice services become commoditized. During the next five years, VAS ARPU will increase by 48 per cent, which will compensate for the 14 per cent decline in voice ARPU. As a result, overall ARPU will stabilize, and decline by only 4.5 per cent between 2011 and 2015.

Mobile data will emerge as the next killer app, accounting for 32 per cent of total incremental wireless revenue, primarily driven by the latent demand for connectivity, which wireline broadband has been unable to address because of availability issues.

The report also forecasts that mobile commerce will represent an INR20bn  revenue opportunity by 2015 and says also that utility services that can provide a scalable, technology-enabled solution to issues around access to information, opportunity and infrastructure (for example, healthcare, education and agricultural/husbandry advice) can add significant value and, as a result, enhance the
“Carriers are under tremendous pressure from competition and declining ARPUs, which have stunted revenue growth,” says Kunal Bajaj, head of Analysys Mason’s India office and lead author of the report. “Recent trends in the sector indicate that now is the right time for them to increase their focus on the VAS space to find new opportunities for differentiation and earnings.”

You can access the report summary presentation and the launch presentation here. The report is available for purchase here.