MM Awards

Premium Rate Service Revenues Falling but Gaming, Gambling and Giving Still Growing

David Murphy

[caption id="attachment_55618" align="alignleft" width="150"]coral-casino-lobby-games Gambling is one of the '3 Gs' propping up premium rate service revenues in the UK[/caption]

The premium rate service (PRS) market in the UK was worth £686.6m in 2014, down 3.2 per cent on the previous year, and is projected to fall again to £637.5m in 2015, according to the latest research from independent research and analysis firm mobilesquared.

Premium rate services are services consumed on a phone that are paid for by adding their cost to the user’s fixed or mobile phone bill or deducting it from pay-as-you-go credit.
The Annual Market Review 2014, commissioned by regulator PhonepayPlus, reveals that the PRS industry continues its decline, but is set to experience growth from the ‘3Gs’ of ‘giving, gaming and gambling’, which will account for 40 per cent of the total PRS market in the UK in 2014.

Mobile-based PRS, consisting of operator billing, Premium SMS, charitable donations and voice shortcodes, accounted for 60 per cent of total PRS revenues in 2014 (£411.9m). Voice-based PRS suffered a 20 per cent drop in revenue between 2013 and 2014, from £344.6m to £274.7m.

The UK was estimated to have had 19.3m PRS users as of the start of 2014, accounting for 35 per cent of the total population aged 11 and over. However, the PRS market is hemorrhaging users, with the number of expected PRS users to fall to 16.5m by the start of 2015. Annual average revenue per user (ARPU) for PRS was £35.60 in 2014, equating to an average monthly spend by a PRS user of £2.97.

Mobile’s dominance as a payment type for PRS will increase this year, and account for 66 per cent of total PRS revenues. In 2015, mobile-categorised services are expected to generate revenues of £419.3m (excluding VAT). Giving, gaming and gambling are expected to experience an increase in revenues in 2015, which will account for 49 per cent of the PRS market.

"The annual market review depicts a market in transition,” said Jo Prowse, acting CEO at PhonepayPlus. “Whereas some services are finding the market environment challenging, mobilesquared's report identifies areas of real growth in PRS. I recommend the research to anyone interested in an objective analysis of the premium rate services market now and in the near future."