1. Mobile VAS in Emerging Markets
India and Egypt
P5CC-65
October 2011

2. Contents
Section Slide Numbers
Executive Summary 9
Introduction 16
Definitions 17
Scope of the Study 20
Key Notes and Assumptions 21
• India Market Analysis 22
Market Trends 23
Subscriber Forecasts 24
ARPU and MoU 25
Wireless Revenue Forecasts 26
Wireless Broadband Market 27
• External Challenges: Drivers and Restraints 28
Drivers and Restraints 29
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3. Contents
Section Slide Numbers
Drivers Explained 30
Restraints explained 32
• MVAS Market Forecasts 34
Market Engineering Measurements 35
Market Trends 37
VAS Subscriber forecasts 38
VAS ARPU forecast 39
VAS Revenue Forecast 40
• Analysis of VAS segments 42
SMS(P2P) 43
Caller Ring Back Tones 44
Premium Content 45
Mobile Internet 46
Mobile Commerce 47
Other Segments 49
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4. Contents
Section Slide Numbers
Social Networking 50
• Popular Content 51
• Mobile Applications Market 53
Mobile Applications Market 54
Types of Mobile Application Stores 55
Market Drivers& Restraints 56
Mobile Applications Revenue and Business Models 57
• Distribution Channels 58
• Revenue Models 60
• Market Share and Competitive Analysis 63
Operator Market Share 64
Market Share Evolution 65
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5. Contents
Section Slide Numbers
Competitive Environment 66
Profiles of Top Competitors (Operators) 67
Profiles of Top Competitors (Platform Providers) 68
Profiles of Top Competitors (Other VAS Vendors) 69
India Telecom Market Top Competitors 70
• PESTLE Analysis 71
• The Last Word- Three Big Predictions 73
• Egypt Market Analysis 74
Market Trends 75
Telecom Market Statistics 76
ARPU and MoU 77
Wireless Revenue Forecasts 78
Wireless Broadband Market 79
• External Challenges: Drivers and Restraints 80
Drivers and Restraints 81
Drivers Explained 82
Restraints explained 84
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6. Contents
Section Slide Numbers
• MVAS Market Forecasts 86
Market Engineering Measurements 87
Market Trends 89
VAS Subscriber forecasts 90
VAS ARPU forecast 91
VAS Revenue Forecast 92
• Analysis of VAS segments 93
Mobile Banking 96
• Analysis of VAS Platforms 97
Market Trends 98
• Popular Content and Applications 99
VAS Evolution 101
• Distribution Channels 102
• Revenue Models 104
• Market Potential 106
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7. Contents
Section Slide Numbers
• Market Share and Competitive Analysis 108
Competitive Analysis-Market Share 109
Competitive Environment 111
Profiles of Top Competitors (Operators) 112
Profiles of Top Market Players 113
Egypt Telecom Market Top Competitors 114
• PESTLE Analysis 115
• The Last Word- Three Big Predictions 117
• Appendix 118
Table of Acronyms Used 121
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8. Introduction
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9. Definitions
• Mobile Value Added Services as those services that offer differentiation for operators and also
allows them to charge a premium price. It includes Non voice services such as SMS ( P2P,P2A
etc), MMS, RBT , data services like the ones using GPRS, WLAN, 3G etc and other
WAP,IVR,IVVR and USSD based services.
Product Segmentation
Value Added
Services
Messaging Non SMS Services
(P2P/P2A/A2P)
Ring Back Data Voice/IVR Video/USSD
Tones Services /etc
Source: Frost & Sullivan analysis
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10. Other Market Definitions
P2P SMS
Messages from mobile to mobile wherein one user uses his/her handset to create message and then send
it to another user/users.
A2P SMS
Messages produced and sent from an application (such as a news alert) to a mobile subscriber.
P2A SMS
Messages sent from a mobile subscriber to an application (such as SMS-based response to a TV voting
contest).
Premium Content
Chargeable content and services delivered over mobile, which exclude messaging revenues and data traffic
charges.
Mobile Entertainment
Chargeable entertainment-related premium content such as mobile games, ringtones, wallpapers, icons,
music, and video.
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11. Other Market Definitions (Cont'd…)
Mobile Information
Chargeable information premium content such as news (includes weather forecast, news update, directory,
and entertainment news), search engines, location-based tracking (excludes telematics tracking services),
and language thesaurus/translation.
Mobile Music and Video Segment
Chargeable music premium content that includes full-track song downloads and streaming mobile music
services but excludes ringtones and ring back tones. Mobile video includes chargeable video-on-demand,
mobile TV, and video streaming.
Other Premium Content
Chargeable premium content such as mobile commerce (m-commerce, that is, mobile wallet, mobile
banking), telematics, and mobile e-mail solutions for the mobile enterprise. Newer value-added services,
such as mobile advertising and mobile marketing services, are also considered.
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12. Scope of the Study
• This Frost & Sullivan study provides comprehensive insights into the emerging mobile markets of
India and Egypt, to evaluate key opportunities in mobile VAS market. The base year of the study
is CY 2010. The forecast period is till CY 2017.
• The study will provide a detailed analysis of the mobile markets in these two countries in terms of
subscribers and revenue growth, market drivers and challenges etc. Key trends in the VAS
industry and their impact in the study period will be discussed.
• It included detailed inputs on parameters like VAS subscribers and penetration, VAS revenues,
data ARPU etc and their growth trajectory till 2017. It provides a comprehensive evaluation of
VAS segments such as Infotainment, m commerce and VAS platforms such as messaging
(SMS,MMS etc) ,RBT, IVR, Video, USSD. It attempts to gauge the market potential of each of
these segments and platforms.
• The report would carries insights on the changing end user preferences and related unfolding of
opportunities. The prevalent business models and distribution channels in both the countries
would be discussed in the report.
• It provides a profile of the top operators, VAS vendors and other major ecosystem participants to
showcase the competitive landscape existing in these countries.
• The study will benefit the entire VAS ecosystem by enabling them to take strategic decisions in
terms of identifying new revenue streams, enriching end user experience etc.
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13. Key Notes and Assumptions
• For the purpose of this study, Frost & Sullivan seeks to analyze the changing MVAS landscape in emerging markets of
India and Egypt
• Revenues/ Valuations will be provided in U.S. dollars, unless specified otherwise.
• All years are calendar years. Base year is CY 2010.
• Only service providers that are regarded as major participants with a clearly defined telecom strategy and/or significant
market revenues in key application markets will be covered under market share analysis.
• List of service providers covered in market share analysis is subject to change according to the evolving market landscape
and service providers’ market performance.
• The exchange rate used is the average rate for CY 2010 and the rates are listed below:
1 USD 45.7 Indian Rupee (INR)
1 USD 5.9 Egyptian Pounds (EGP)
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14. Executive Summary
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15. Executive Summary
India
•As of June 2011, India had about 851.7 million Wireless subscribers. Out of these around 70% of
subscribers were active (VLR) subscribers. The teledensity based on the overall subscribers was around
70.16%
•As of CY 2010, VAS contributed to about 12% of the overall operator revenue. This is likely to reach 25% by
2017
•Around 320 million subscribers used Value added services in India as of June 2011. The VAS penetration
(population) was about 26.3%
•P2P SMS has traditionally been the highest contributor in the VAS segment followed by CRBT. However this
trend is likely to change and together, SMS and CRBT will contribute about 22% of the overall VAS revenues
in 2017
•The VAS revenues is likely to reach 12.6 billion USD by 2017 at a CAGR of 30%.
•Video calling, Mobile TV, Location Based Services and Mobile commerce are
likely to witness increased usage and adoption in the near future
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16. Executive Summary
Egypt
•As of June 2011, there were 76.43 million mobile subscribers in Egypt including a large number of inactive subscribers due to prevalence
of multi-SIM subscribers . The subscriber penetration stood at 95.07% (June 2011) and is expected to cross the cent percent mark in CY
2012
•The blended industry ARPU is estimated to increase from USD 4.56 in H1 2011 to USD 6.00 in 2017. While the Voice ARPU is expected
to continue to decline, data ARPU will increase owing to increased VAS uptake
•Relaxation of government regulations and increasing penetration of mobile broadband services are likely to drive the usage of VAS and
data services. On the other hand, unstable socio-economic scenario, low smartphones penetration and high pricing of VAS services will
hinder the growth of VAS industry in the country
•VAS penetration is more than 75% percent in the country considering P2P SMS a VAS service. Non SMS VAS subscribers are estimated
to reach 47 million by 2017, taking the penetration level to 46% from present 23%
•Revenues generated by the VAS industry are estimated to reach USD 3.80 billion by 2017, representing more than 52% of the operators’
wireless revenues
•Consumer focus is shifting from entertainment VAS to infotainment and utility based VAS services.
The onus is on third party application developers and VAS vendors to help operators generate
new revenue streams
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17. Executive Summary—Market Engineering Measurements
Market Overview
MVAS in Emerging Markets: India, June 2011
CAGR of VAS
VAS Revenues
Market Stage VAS Penetration VAS ARPU subscribers (till
(USD billion)
2017)
Mature 52.5% 2.85 $0.287 15.5%
(June 2011) (June 2011)
VAS CAGR of VAS Degree of
Customer Price Market
Penetration revenues (till Technical
Sensitivity Concentration
2017 2017) Change
85% 27% 9 6.5 66
(% of market share held by
(CAGR) (scale:1 [low] to 10 [High]) (scale:1 [low] to 10 [High]) top 3 companies)
Note: VAS penetration has been calculated based on the total number
Decreasing Stable Increasing of actual subscribers in that particular year
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18. Executive Summary—Market Engineering Measurements
Market Overview
MVAS in Emerging Markets: Egypt, June 2011
CAGR of VAS
VAS Revenues
Market Stage VAS Penetration VAS ARPU subscribers (till
(USD Billion)
2017)
Mature 77.19% 0.32 $0.9 8.46%
(June 2011) (June 2011)
VAS CAGR of VAS Degree of
Customer Price Market
Penetration revenues (till Technical
Sensitivity Concentration
2017 2017) Change
92.16% 32.62% 8 6 100
(% of market share held by
(CAGR) (scale:1 [low] to 10 [High]) (scale:1 [low] to 10 [High]) top 3 companies)
Note: VAS penetration has been calculated based on the total number
Decreasing Stable Increasing of Wireless subscribers in that particular year
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19. Key Takeaways (India)
Increasing Smartphone penetration and
1 usage of data services on the mobile will
drive the VAS market ahead
Top VAS revenue grossers like SMS and
2 CRBT will be replaced by other services like
data etc in the study period
The focus of the operators will move from
voice to data in the near future. VAS will be a
3 revenue generation and brand differentiation
tool
Increasing focus on m-commerce, utility
application like m-Health, m- Education etc
4 will help in achieving inclusive growth in the
country
Mobile broadband and adoption of off deck
5 value added services will bring forth a
revised and equitable revenue share model
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20. Key Takeaways (Egypt)
Growing wireless market represents a huge
1 opportunity for VAS players in Egypt
High literacy rate of the target population will
2 help in industry growth
Operators are focusing on increasing
3 strategic alliances with ISPs, banks, vendors
and global platform providers
3G infrastructure upgrades and increased
affordability due to subsequent price
4 rationing provide great growth opportunities
for VAS in the country
Key to the success lies in providing
5 innovative utility services at attractive prices
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21. Market Engineering Methodology
One of Frost & Sullivan’s core deliverables
is its Market Engineering studies. They
are based our proprietary Market
Engineering Methodology. This approach,
developed across the 50 years of
experience assessing global markets,
applies engineering rigor to the often
nebulous art of market forecasting and
interpretation.
A detailed description of the methodology
can be found here.
Source: Frost & Sullivan research.
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