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Uncertain Payback for 3G Services in Emerging Markets
Increasing Interest in Entertainment and Sports but Revenue Potential Still Unproven
Boston, MA - December 15, 2010 – Value added services (VAS) can supplement voice and text revenues for mobile operators in emerging markets, but may not be enough to justify investment in 3G networks. According to, “3G VAS: Broadband Opportunities in Emerging Markets,” a new report from the Strategy Analytics Emerging Markets Communications Strategies (EMCS) service, consumers are interested in mobile VAS like sports video, music, interactive games and traffic cameras, but operators are challenged to price them suitably in order to make them appeal to a mass audience.
“Even in the double-digit growth markets of Asia and Africa, voice and SMS revenue will eventually stop growing,” notes Tom Elliott, Director of EMCS and the report’s author. “Services are Plan B.” Although some services, like mobile banking, do not require high bandwidth, others, such as video, are attractive only if they can be offered over fast 3G networks. Price-sensitive customers in emerging markets need to find enough value in these 3G services to justify a significant increase in communications spending which would pay for the networks that deliver them.
According to David MacQueen, Director of the Wireless Media Strategies (WMS) service, “Everybody seems to offer video calling when they roll out 3G. It is flashy, easy to understand and something you cannot do on the old network. But the use case just isn’t there for most emerging market consumers. Operators should focus on offerings that customers actually want –like entertainment and web access – and on appropriate ways to price them.”
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