Mobile Value Added Services Market Analysis

Mobile Value-Added Services (MVAS) (Global, 2022)

Introduction

Mobile Value Added Services (MVAS) have emerged as a key part of the telecommunications sector, as the penetration of mobile devices increases and the demand for enhanced services increases. MVAS have developed to include a wide range of services, including mobile payments, entertainment, location-based services and various applications that serve both the individual and the enterprise. These services not only increase the functionality of mobile networks but also offer new sources of revenue for operators, and thus stimulate innovation and competition. Moreover, the converging trends in technology, customer behavior and regulation continue to shape the MVAS environment, bringing with it both challenges and opportunities for all those who wish to take advantage of the mobile economy.

PESTLE Analysis

Political

In 2022, the MVAS market was influenced by many political factors, including government regulations and policies to improve the digital environment. For example, the Indian government had allocated about $1.5 billion to improve the mobile phone environment in remote areas, which would directly affect the MVAS market by increasing the potential number of users. In addition, the “digital India” plan, which has been carried out since 2014, has also led to a rise in the number of mobile phone users. The number of mobile phone users has exceeded 800 million.

Economic

In 2022 the economic situation was such that the demand for mobile value-added services was on the increase, based on rising incomes and the spread of smartphones. In the emerging markets, the average monthly revenue per user of mobile telecommunications was estimated at five and a half dollars, which showed the potential for a wide range of mobile value-added services. The total mobile data traffic had reached 77 exabytes per month, a thirty per cent increase over the previous year, a figure which again indicated the potential for mobile value-added services, as consumers sought to enhance their mobile experience.

Social

Then, in 2022, the trend of the society was to become a mobile-centric lifestyle. More than seventy percent of the people were using the mobile phones for daily life, such as shopping, banking and entertainment. This trend has also brought a large number of MVAS, especially in the field of e-commerce and mobile payment. A survey shows that 65% of users prefer mobile services with a sense of personalization. Therefore, social factors must be considered in the MVAS, and the needs of the users must be met.

Technological

In 2022, with the number of mobile phone users having reached six and a half billion, the MVAS market was booming. 5G, which would cover 40 per cent of the population by the end of 2022, had improved the speed of data transmission, thus facilitating the operation of MVAS. Artificial intelligence, meanwhile, had made mobile applications more attractive, and 50 per cent of MVAS companies had incorporated AI to enhance customer satisfaction.

Legal

In 2022, the MVAS market was influenced by the legal factors, such as the new European data protection law, which imposes a fine of up to twenty million euros or four percent of turnover on those who do not comply with it. In addition, various countries have enacted regulations to protect the consumers in the mobile transactions, and over thirty countries have introduced laws to protect the privacy of the users. These laws and regulations required MVAS companies to take measures to prevent fines and to win the trust of the consumers.

Environmental

In 2022 the MVAS market became increasingly concerned with environmental issues, with an emphasis on sustainable development and eco-friendly practices. The mobile industry accounted for about 4% of all global greenhouse gas emissions. This prompted many MVAS companies to adopt greener practices and more eco-friendly technology. For instance, more than a quarter of the world’s mobile operators committed to reducing their carbon footprint by implementing energy-efficient solutions and promoting paperless services, thus shifting their business practices towards a more sustainable approach.

Porter's Five Forces

Threat of New Entrants

The MVAS market has moderate entry barriers, because of the need for technological expertise and significant investment in the network. However, the cloud and the emergence of mobile technology have lowered some entry barriers, allowing new players to enter the market. Competition is strong, but it also forces the established players to constantly renew and develop their services.

Bargaining Power of Suppliers

In the MVAS market, the suppliers’ bargaining power is generally low. The market is characterized by a wide range of suppliers and vendors, which makes it easy for MVAS companies to switch suppliers or find alternatives. Suppliers’ power is further weakened by the rapid development of technology.

Bargaining Power of Buyers

The buyers in the MVAS market have a high bargaining power because they have many choices. In a multi-provider environment, where most of the value-added services are very similar, the customer can easily compare and change suppliers if their needs are not met. This makes it necessary for MVAS companies to offer low prices and good service to keep their customers.

Threat of Substitutes

The threat of substitutes in the MVAS market is moderate. There are substitutes which are able to fulfil similar needs such as free applications and social media. However, the unique features and personal services offered by MVAS companies create a niche which is difficult to copy. However, as technology continues to develop, a threat of substitutes will continue to be a concern for MVAS companies.

Competitive Rivalry

Competition is intense in the MVAS market, driven by the presence of numerous players and the rapid pace of innovation. Companies are constantly trying to increase their market share by introducing new services and improving existing ones. Competition also leads to price wars and increased marketing spending. In this environment, MVAS companies need to differentiate themselves from their competitors in order to succeed.

SWOT Analysis

Strengths

• High penetration of mobile devices leading to increased demand for MVAS.
• Diverse range of services including entertainment, education, and financial services.
• Ability to enhance customer engagement and loyalty through personalized offerings.

Weaknesses

• Dependence on mobile network operators for service delivery.
• High competition leading to price wars and reduced profit margins.
• Challenges in ensuring data privacy and security for users.

Opportunities

• Growing smartphone adoption in emerging markets.
• Integration of advanced technologies like AI and IoT to enhance service offerings.
• Expansion of 5G networks enabling more sophisticated MVAS solutions.

Threats

• Rapid technological changes requiring constant innovation.
• Regulatory challenges and compliance issues in different regions.
• Intense competition from OTT (Over-The-Top) services and alternative platforms.

Summary

In 2022, the telecommunications value-added services (TVAS) market is expected to be characterized by strong demand, which is based on the penetration of mobile devices and a wide range of services that enhance customer engagement. However, the market will face several challenges, such as high competition and regulatory barriers. In emerging markets and with the use of new technologies, there are opportunities for growth. However, operators should be aware of the rapid technological change and the threat of new service suppliers.