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Global Adoption of Mobile Value-Added Services

Emerging markets will be the key driver in the growth of global mobile value-added service (VAS) revenues from $200 billion in 2009 to $340 billion in 2014, according to the latest market study by Informa Telecoms & Media.

China, India, Indonesia, South Africa, Nigeria, Egypt, Turkey, Israel, Saudi Arabia, Brazil, Mexico, Argentina, Russia, Poland and the Ukraine are expected to account for 36 percent of the global mobile data revenues in 2014.

“Compared to the developed world, there are very different economic, social, demographic and cultural challenges in the emerging markets. In many countries, 3G services are still not available, or are limited to mobile subscribers in larger cities," according to Shailendra Pandey, senior analyst at Informa.

Therefore, operators have to depend on 2G services such as SMS, USSD (Unstructured Supplementary Service Data) and IVR (Interactive Voice Response) systems, to be able to drive mass market adoption of their mobile VAS, and to successfully reach subscribers in smaller towns and rural areas.

Mobile operators and service providers in emerging markets have been more innovative and proactive in developing and deploying new mobile VAS than their counterparts in the developed world. In particular, operators are seeing strong uptake of utility type services including mobile payments, P2P funds transfer and agricultural information services.

The reason being that these services are having a big impact on the day-to-day lives of the local population and are contributing to the social and economic development of the population in these markets.

Services such as M-PESA from Safaricom in Kenya, the Rural Information Service from China Mobile, the Please-Call-Me service from MTN in South Africa, and the CellBazaar service from GrameenPhone in Bangladesh are some good examples.

Mobile social networking is also growing in emerging markets, but most of the services are instant messaging chat applications. One of the most successful service examples is China Mobile's IM service called Fetion, which has over 100 million registered users. The addressable market for the Fetion service is large as it can work using IVR, GPRS and SMS access modes.

Mobile App stores have so far not received the same attention from the operators in emerging markets as they have in the U.S. and Western Europe, but some large operators like China Mobile have already launched their own app stores.

Earlier this year,China Mobile has collaborated with Nokia to launch MM-Ovi. It has been reported that over 4 million mobile apps had been downloaded from this App store by March 2010.

With high market saturation and limited growth prospects in developed countries, the emerging markets are becoming a key focus for mobile industry players -- including operators, handset manufacturers and infrastructure vendors, as well as the VAS platform and technology vendors.

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