Research Notes

10 Tips for the Mobile Value Added Services Market

Telecom operators want to market their APIs to IT companies, media companies, system integrators, and other agents to make intelligent services. In our report OneAPI – Next Generation Value Added Services in the Mobile industry Strand Consult describes how operators and others can take advantage of APIs to improve their value added services (VAS) offerings. Here are 10 tips from the report.

1. Create VAS that are applicable across the ecosystem of hardware.
When mobile broadband first appeared, people believed that it would only be used with mobile phones when users were “on the road”. They never imagined that mobile broadband would be used with laptops, tablets, and other devices. Be sure to think about end users and all the practical ways they can use VAS.

2. Create VAS that are compatible with fixed line internet broadband, not just mobile broadband.
The open payment operator billing model is not just for mobile phones and mobile VAS. Leverage the fixed line broadband billing environment for your value added services. Media companies have a disadvantage with their walled garden strategy; they could have more billing points by using operatror billing with broadband.

3. Leverage service platforms with VAS.
The OneAPI model will be supplemented by service platforms, making it faster and easier for third partis to develop and sell services, in addition to using the operators’ billing systems. The service platforms will bind the services closer to the operators. Content delivery networks (CDNs) are service platforms that could be linked with VAS and operator billing.

4. Leverage “click to buy” functionality.
The OneAPI model will result in a wider variety of services there is used on other platforms than mobile phones, such as tablets and computers. Existing media channels can be used as marketing channels, similar to how the ringtones, Java Games and logo markets started. Having a simple and effective payment functionality, like “click to buy” is essential in a multi-device environment.

5. Ensure that your VAS helps to reduce production, sales and marketing costs.
Operators should focus on reducing production costs for VAS to make them more attractive. In additional, they should look for partners and customers that already have efficient and/or low cost marketing.

6. Have realistic expectations about advertising-funded models.
There is a lot of hype about advertising models and mobile advertising. The truth is that even the largest players struggle with advertising. Mobile advertising is cannibalizing Google’s search revenue from desktops. Facebook still hasn’t cracked mobile revenue nut. While advertising may support some services, not all VAS will be profitable with advertising.

7. Successful services will make everyday life easier and fun.
Entertainment for end users will dominate the market for VAS.Many believed that mobile telephony would never be used more than fixed line telephony, as fixed line telephony was more stable, had better sound quality, and was cheaper. Once mobile telephony traffic exploded, people said that companies would not switch to mobile telephony, as companies would not conduct business over unstable communication lines.This proved wrong as well. Mobility is a valuable commodity, and the modern mobile phone is used for much more than voice. Mobile phones are an important channel for entertainment to be sure.

8. Gateway companies that offer access to a variety of APIs across operators have a favorable business case.
Gateway companies act like a clearinghouse for operators and their potential partners and customers. Gateway companies can help lower the costs for content providers that want to use APIs to make VAS.

9. Focus on solutions that create competitive advantage, not “knock off” solutions.
Operators should try to make unique and competitive solutions, not knock-off versions of global concepts. Operators that provide their VAS as a competitive advantage for their customers will have a greater chance of success. We do not believe that operators will get success by making knock offs of different OTT services. Consumers prefer the real stuff.

10. Understand the difference between innovation and evolution.
Players that know the difference between innovation and evolution will be those that have the possibility of leading the development of the future mobile services market. The prerequisite for being successful on the VAS market is ensuring that the OneAPI model is implemented and evolved to the market need. This will ensure operators a profitable place in the value chain.

To receive more information about our report OneAPI – Next Generation Value Added Services in the Mobile industry and how we have helped mobile operators overcome these challenges, contact us.

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