The Promose of the African VAS Market

Jim Machi : Industry Insight
Jim Machi

The Promose of the African VAS Market

I was asked a question a few weeks ago about “the future” of value-added services in Africa. This question was deeper than it first appeared because the person asking me the question was really wondering whether VAS will be “required” once 3G services, and thus over the top services (OTT), become bigger over time in Africa. Before we really get down to answering the question, it’s important to remember that a value-added service is a service beyond voice that the consumer is willing to pay for. This does not necessarily mean that it has something to do with mobile broadband and smartphones. In fact, the advent of value-added services (and innovative value-added services at that) occurred with basic feature phones long before mobile broadband was even feasible. SMS, and derivatives of SMS such as voice SMS, televoting using SMS, gaming using SMS, and color ring-back tones are examples of value-added services that  have generated revenue for service providers because they provide value to the subscribers.

So yes, VAS has a very bright future in Africa. According to the June 2012 Wireless Intelligence report, “Global Cellular Market Trends and Insight,” Africa has an almost 17% annual mobile connection growth rate, which is the world’s fastest growing, and 3G accounts for more than 10% of all connections in Africa. This shows the great potential for all kinds of value-added services.

And right now, Dialogic customers offer a wide range of VAS that are applicable to and being sold in Africa today, ranging from text messaging (including voice SMS), mobile payments (including exchanging pre-paid from one phone to another phone), IVRs and roaming solutions.   Please see the Dialogic Solution Showcase on our website for examples of deployed services. We will see more VAS going forward, and we should get a glimpse of some of these new services at AfricaCom in November.

So, back to the reason behind the original question I was asked. What a value-added service is will change as networks change and as subscriber demand changes. However, the key principles of value-added services will remain, which is why VAS will always be a key ingredient to a service provider offering even as the networks change:

  • Use VAS as alternative to voice communication mechanisms, such as texting. As smartphones and mobile broadband enter the market, this will likely morph to include other communication mechanisms, such as those provided by instant messaging or Facebook.
  • Use VAS as a personalization vehicle, such as with color ring back tones or social networking interaction.
  • Use VAS as entertainment, such as with televoting for TV shows or playing games. Again as mobile broadband enters the market, we will see people using their phones to watch TV or videos on YouTube as an example.
  • Use VAS as a way to improve your productivity, such as with location-based services or IVRs.
  • Use VAS for mobile commerce, such as with payments or mobile banking. As mobile broadband becomes more prevalent, and people start using their smartphones as an on-ramp to the internet, you will likely also see more mobile advertising (think about going to the internet today and how common it is to see advertisements).
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