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The potential of e-sports. The rise of B2B2C. The challenge of balancing regulation with the freedom to innovate. There was much to discuss in a webinar that looked ahead to the future of mobile VAS…

In the early 2000s a community of innovators noticed the passion consumers had for their (2G) phones. They saw a business opportunity. Why not give this growing customer base the chance to use their phones for self-expression and entertainment?

And so a new industry – Mobile VAS (value added services) – was born. 20 years on, that industry is still flourishing – although it has changed dramatically.


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Today, VAS providers have broadened their focus from just entertainment (music, games, horoscopes) to utility and productivity (education, health etc). They have diversified away from pure content creation and curation into technical services (billing, messaging, anti-fraud etc).

Finally, they have moved on from targeting only consumers. Now, they work with enterprises too. B2C has expanded into B2B2C.

As we start a new decade, the VAS community is facing a new set of challenges and many exciting opportunities.

Last week, MEF hosted a webinar – Setting a roadmap for VAS in the 20s – to discuss them. Our four experts were:

Regulation still has a lot of influence on the market. The operators have their own policies. The regulators have theirs. There are so many rules it’s affecting innovation.”

  • Anzelle Robertson, Business Development, Sam Media
  • Bola Afuye, Head of Digital Services, 9 Mobile
  • Christopher Henseler, Operations Director Central Europe, Telecoming
  • Teniola Stuffman, Business Development Director, VAS2Nets Group

Here are the big talking points:

VAS providers have an opportunity to sell physical products

Over the last 20 years VAS specialists have had to observe where markets are dying while staying alert to new opportunities. For Anzelle Robertson and Sam Media, there is much potential in physical products. This is surprising, given the digital fundamentals of the business.

“Increasingly we are adding tangible benefits to our digital services,” she said. “We have distributed cardboard headsets to go with our VR products in Malaysia, Indonesia and the Phillipines. And we offer discounts at book stores for our language learning tools in Spain and South Africa.”

Christopher Henseler reminded the viewers that, in Europe at least, new payment rules are creating fresh opportunities for aggregators to enter ‘physical’ markets. He said: “With PSD2 regulation, there are many new businesses models opening up for us in DCB payments – in ticketing for parking and concerts and so on.”

Regulatory uncertainty still holds back some markets

The VAS market has always had to find the right balance between regulation and freedom to innovate. There is no sign of that struggle going away.

Teni Stuffman highlighted the problem in central Africa, where VAS2Nets operates. “Regulation still has a lot of influence on the market,” she said. “The operators have their own policies. The regulators have theirs. There are so many rules it’s affecting innovation.”

She believes VAS providers could collectively deliver something fairer and more workable. “I can imagine a situation where the VAS providers build some kind of subscription management platform that would enable an easier form of billing. This is against a situation where it’s all managed by telcos, and the same content costs 50c on one telco and 25c on another.”

Ultimately, the panellists agreed that regulatory clarity is very important. Not least because it encourages healthy and honest competition. Henseler said: “If one guy is not playing by the rules it affects everybody. It makes it difficult for companies who are trying to offer good value products….A lack of regulation has stopped us from entering some markets where we would have to compete with locals who take advantage of it.”

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Over zealous verification is killing some markets. Tech solutions can mitigate it.

Robertson accepted that MNOs had their reasons for imposing multi-step verification in the past. But she thinks new tech tools render these steps excessive.

“If we rewind to five years ago, there was major rise in mobile ad fraud, auto subscriptions, malware and the like. Understandably telcos took action,. They  insisted that people went through a 3 step verification and completed a reCAPTCHA before they could see, say, their love match on valentine’s day.

“But now we have mobile ad security specialists. We can see whether a click is coming from a real user or not. The best formula is to bring all the parties together, to approach carriers and say: we can take this problem out of your hands.”

There’s a booming market for B2B2C and telco APIs

A market that began by serving the demand for relatively frivolous consumer products now does lots of business with enterprises. Bola Afuye hinted at the potential of this activity in developing regions. “The market is shifting from B2C. Operators have the opportunity to monetise their assets. We can offer APIs and analytics that add a lot of value.. and can help with things like credit scoring and location.”

E-sports, VR, e-learning… VAS keeps finding new opportunities

There’s always a niche – even in a content market dominated by Netflix and other multi-nationals. Christopher Henseler sees potential in e-sports. “It’s huge, and it’s not widely covered by OTTs,” he says. Same goes for VR and 360 degree videos. “We’ve made short 360 degree films that you don’t even need a VR headset to watch. You don’t find this kind of content on established platforms.”

Robertson stressed the importance of locally-oriented content. She cited e-learning. “We’ve seen the demand for additional learning outside of the education that governments provide. We developed products with a university in the Netherlands, which we rolled out in SA, and are planning to launch in Kenya and Ghana.

Text alerts haven’t gone away. They’ve just become verification tools.

According to Bola Afuye, the market for old-school text alerts is dwindling readily, even in markets such as Nigeria where most customers do not have data access.

But these alerts haven’t gone away. They have merely migrated elsewhere. Afuye said: “VAS services based on SMS, USSD and IVR would have been 90 per cent of our revenues five years go. Last year, they were 30 per cent… So now something like SMS has become a channel for utilities. For example, for checking whether your car papers are valid. SMS or USSD works well here because connectivity is an issue.

Tim Green

Features Editor, MEF Minute