What MVAS growth holds in store for marketers?

With 15% growth in Mobile Value Added Services, marketers have the opportunity of effectively integrating content and delivering it at the right place, at the right time

e4m by Saloni Surti
Updated: Aug 21, 2013 8:04 AM
What MVAS growth holds in store for marketers?

According to statistics by IAMAI – IRMB report, Mobile Value Added Services (MVAS) market is expected to reach Rs 29,300 crore by the end of 2013, from Rs 26,000 crore in 2012, thus marking a y-o-y growth of 15 per cent.

Mobile Value Added Services hold extreme importance for mobile players and marketers as they are heavily depended on the space (in addition to displays advertisements) for monetisation and consumer connect purposes. While arrival of smartphones has restricted VAS services such as ringtone, songs and wallpaper downloads, for a certain set of users they still rule the charts, especially in tier II and III cities.

The MVAS landscape 
While the overall mobile subscriber base is declined by six per cent to reach 868 million (in Q1 of 2013), the steady decline in handset prices has increased the rural subscriber base by six per cent to reach 343 million. According to TRAI reports, there are 431 million mobile internet capable subscribers. The ARPU (Average Revenue Per User) is Rs 105 for GSM and Rs 95 for CDMA users. Overall ARPU has grown by 14 per cent to reach an average if Rs 100.

The MVAS space is broadly divided in consumer and enterprise market. The consumer market (which consists of services including CRBT, push services, games download, etc.) forms the major part. The enterprise market (which includes services such as book keeping or cloud based services) is currently in its initial phase. However, the IAMAI – IMRB report suggests that the market is estimated to grow by 25 per cent to reach Rs 600 crore by the end of FY 2013. 

Further, the report finds that the enterprise market is expected to grow by 30 per cent in FY 2014 to reach Rs 780 crore.

The challenges
While MVAS has managed to witness significant growth, there are a number of elements that work in negative ways for the space, hampering its potential.

Increasing mobile internet penetration
With the falling 3G rates and increasing penetration of smartphones, consumers have a whiff of high capability devices. However, this also led to consumers inclining more towards handset build applications (such as IoS, Android, etc.) for their external data needs, reducing the use of VAS to a certain extent.

TRAI regulation
With increasing importance of consumers’ privacy, TRAI issued strict deadlines which require VAS service providers to deactivate a service within four hours of the request, making it difficult for service providers to offer seamless integration.

Penetration of chat applications
With higher usage of internet-based chat apps, the data revenue is increasing, but SMS revenue is coming down, impacting growth of MVAS significantly.

According to research, Indians are connected to their cellular devices emotionally. Also, mobile is now popularly becoming the screen of preference for a number of reasons, thus creating a huge need gap in terms of content on the medium and monetisation of that content. Ironically, growth of MVAS can be the antidote to both these problems.

In the growth of MVAS lies a huge opportunity for marketers, telecom service providers and handset manufacturers. To fulfill the need of the hour, handset manufacturers can create more affordable devices, telecom players have the occasion of creating stronger services and reasonable rates, and marketers have the opportunity of integrating with content and delivering right content at the right place.

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