Indian mobile VAS market to hit $2bn in 2008: PwC

According to a report by PricewaterhouseCoopers (PWC), the Indian mobile VAS market is all set to grow to $2 bn in 2008.Following a dip in revenues from voice-based services, mobile value-added services (MVAS) is all set to see a phenomenal growth across the world. Currently, mobile VAS in India accounts for 10% of the operator’s revenue, which is expected to reach 18% by 2010. The worldwide spending on MVAS, including mobile music, mobile payment and mobile advertising will reach $55.6 bn by 2011, the report added.

Mobile payment, which currently accounts for just 1% of the data services market, is set to add 70.9 mn users by 2010, the report states. According to the report, the key driver for the growth of VAS in mobile payment segment will be demand from rural and semi-urban areas, where a huge gap exists in banking infrastructure. Mobile wallet will also replace plastic cards (credit cards) in coming years, the report added.

“India has a high proportion of mobile subscribers to total telecom subscribers, driven by the faster wireless rollout, inexpensive handsets and low cost prepaid cards. Here, money transfers, driven by lack of banking infrastructure is a key service need,” the report said. Currently, about 44% of VAS revenue in India is driven by short messaging service applications. The youth segment will also continue to drive the market, particularly in the entertainment MVAS.

The mobile music segment is also set to fuel up with user spending on mobile music expected to increase to $32.2 bn in 2010 compared to $13.7 in 2007. While the revenue from mobile gaming is expected to grow to $9.6 in 2011 compared to $1.8 bn in 2007.

Mobile advertising, which is an important VAS segment, is expected to grow consistently to reach a valuation of $12.8 bn by 2011, compared to $2.7 bn in 2008. The growth in this segment will be fuelled predominantly by rollout of 3G networks, IPTV and high- end gaming on mobile phones. The size of mobile advertising in India is miniscule.

However, analysts believe it has potential to grow at 200% a year, giving operators a new revenue source. Currently, the VAS market is governed by short message service (SMS), Interactive voice response (IVR) and WAP portal platforms, delivering applications such as entertainment, advertisement, gaming and news.

Source: Economictimes