Traditional mobile value added services (MVAS), which primarily comprised of messaging, ring-back tones, and occasional web sessions, has now passed its product maturity cycle, thus laying the foundation to what we call VAS 2.0 or digital mobile services, covering interactive applications and internet-enabled services.

Mobile customers today are influenced by a “connected culture” and have a need to remain connected, informed and entertained continually through the use of digital mobile services. A number of factors are contributing to the growth and uptake of these services however; one of the biggest drivers is the changing devices landscape in the region. The Middle East region has been receiving a lot of attention from vendors who are working to “smart” up their entry level devices and introduce feature-rich smartphones at affordable price points, what we call smart-feature phones.

In seeking to maximise the VAS 2.0 opportunity, regional operators are luring smartphone owners to subscribe to various data-access packages. Besides, they are offering smartphones at subsidised rates when customers commit to a certain period. Regional telcos are also actively contributing to the digital content landscape through a number of initiatives such as the launch of operator-owned digital services, which aim to facilitate the consumption of traditional content through digitally-enabled and enhanced services. Furthermore, operators, and device and platform providers in the region are actively encouraging local application development through developer communities.

Moreover, initiatives by Arab countries for the development of digital content will boost the adoption of localised Arabic digital content services. For example, in Saudi Arabia, King Abdullah Initiative for Arabic Content has more than 60 projects for developing digital content. Qatar established the Digital Content Incubation Centre to promote entrepreneurship related to the production of Arabic content and a Creative Commons affiliate to encourage and protect digital creativity. Similarly, ‘Badir’, a technology incubator programme launched by King Abdulaziz City for Science and Technology (KACST) in 2007 has been funding and supporting many start-up projects related to mobile apps development.

These factors have led to a visible shift from traditional mobile value-added services to data-oriented services. However, there still exists a clear disconnect in the type of content and applications, which consumers use and demand, than what is being developed and supplied by aggregators and operators. As smartphone penetration rises, mobile tariffs rationalise and the availability of localised content increases, consumers will increasingly look for relevant localised content that provides them with a user-friendly and intuitive interface. Therefore, use of data analytics, on both content aggregators’ and operators’ part will play a major role in narrowing the supply and demand gap, enabling absolute visibility of both content consumption and data usage, as well as help differentiate and micro-segment products and services easily, thus addressing some key concerns in the digital content industry.

Going forward, the ability to understand the psychographic, geographic, and the demographics of consumers while also improve quality of service, increase customer satisfaction, and effectively communicating with customers anytime, anywhere will be key element to promoting the adoption of mobile content services over the next couple of years. Hence, operators will need to explore new customer engagement models, develop niche products for different customer segments, and understand how to leverage an ever increasing mass of customer data. They will also have to harness new market drivers such as social networking and mobile advertising, stretch their business models and facilitate the development of a self-sustaining digital content eco-system.

 

Juan Jose De La Torre is Vice President of Mobile and Web at Intigral.

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