J’son & Partners Consulting presents main results of the research of telecom operators’ strategies in the sphere of mobile applications (apps).
The global trend is a decrease of voice and SMS/MSM revenues of cellular operators.
There are two causing factors:
Competition between operators;
Changes in consumption model of communictaion services by subscribers.
In order to gain the highest profitability operators try to play on adjacent markets. Mobile apps market and its infrustructure are very appealing for them and present sort of a platform for developing the priority directions.
Mobile apps market summary in Russia and in the world, 2010 – 2015
Mobile apps – program product developed specially for mobile devices, smartphones, tablet PCs or any other mobile devices. Mobile apps help to solve different applied tasks: starting from mobile maps and accepting of emails till very specified functions. The main goal is to help the users, make their lives easier and to provide different ways for solving daily tasks from different angles.
Mobile apps are on the peak of popularity these days. Increasing not only number of developers but also the number of available apps and its downloads. More and more companies want to creat their own app that will bring them profit and massive popularity will help to be a step ahead of the competitives. Previously mobile apps have been a segment of mobile content market, now it is an independent direction.
Key market players are: AppStore, Google Play, Windows Phone Store, BlackBerry App World, Nokia Ovi Store, Samsung Apps and many other shops.
Mobile apps market was established in 2008. Apple was the first company that has launched the innovative model of apps distribution. Google was next and become one of the most serious competitor to Apple. Cellular operators that previously distributed the content via VAS model are actively integrating in the new model of content distribution. In the research presented a retrospective of mobile apps market with an overview of changes in key indicators.
Volume of the global mobile apps market
J'son & Partners Consulting experts forecast the growth of market volume. The reduction of growth rate will not affect prices ($). Market will keep the increasing trend but a little bit slower than before.
Mobile apps market volume at the end of 2013 will be 16.3 bln. USD in the world and will reach 65. 8 bln.USD point in 2016.
Volume of the Russian mobile apps market
J'son & Partners Consulting forecasts slow market growth in comparison with the overseas markets in the coming year, although in 2014 – 2016 growth rates will overstep the global.
Nevertheless the growth rate will stay stable until 2016. There are following reasons: increasing popularity of mobile apps and a variaty of them in the mobile apps shops and provided directly by mobile operators. Directions where you can use mobile apps is also expanding.
According to J'son & Partners Consulting the volume of mobile apps market in Russia will reach 246 mln.USD in 2013 and 1158 mln.USD in 2016. The average growth rates per year will be 171% in the period 2013 – 2016.
Market drivers and barriers
Among the most important drivers J'son & Partners Consulting experts stipulate:
Decreasing costs for communication via mobile devices
Growth of TabletPCs penetration rate
Influence of mobile social networks
Launch of new platform - Windows 8
Construction of 4th generation of LTE
Changes in consumption model – Global mobilization
Increasing popularity of geopositioning.
Main market barriers are:
Payment difficulties for developing markets’ users
Low awareness of users about possibilities of mobile apps.
VAS market summary in Russia and in the world, 2011-2016
Mobile operators receive revenues from transfer of voice and non-voice connection or VAS-services. Today voice transfer market is getting closer to its peak and operators try to develop new directions and offers for their subscribers – non-voice services also called VAS, additional mobile services and just additional services.
Operators all around the world are becoming market players and making money on TV and music content, apps and mobile advertising. VAS-services are being used by individuals and legal entities.
VAS – Value Added Services. In the telecom sphere this definition covers all non-voice services and services that are not connecting with CSD data transfer and fax.
World VAS market
Ovum estimated that the global volume of VAS market in 2012 increased for 22% from 257 bln.USD till 315 bln.USD. It is expecting to reach 419 bln.USD in 2016 with CAGR of 7,2%.
Mobile broadband access to the Internet will influence the growth of revenues for VAS business and this revenues will reach 717 bln.USD in 2016 with CAGR 17%. Main segment’s driver is the increasing demand of smartphones and TabletPCs.
Russian VAS market
J’son & Partners Consulting estimates the growth of russian VAS market from 266 bln. RUB in 2013 till 405 bln. USD in 2016.
Main trends of VAS market
Standardization of VAS services and monopolization of the branch. On VAS market currently existing the standard range of services and all mobile operators support them. Standard VAS model is becoming not interesting and cellular operators are in the search of new strategies for monetization.
Increasing of VAS share in the revenue structure of telecom-operators. VAS share according to J’son & Partners Consulting is continuing increasing in the revenue structure and presents 30%.
The share increase of smartphones facilitates the revenue growth of context VAS-services provided by mobile operators. Together with increasing sales of smartphones on the russian market, the range of mobile services operators and revenues are also expanding.
VAS market drivers
J'son & Partners Consulting listed the following important factors:
Development of Internet. Increasing penetration rate of 3G on Russian territory and the creation and development of LTE networks.
Growing sales of smartphones/communicators.
Appearing of new models of smartphones and TabletPCs that support LTE.
Reduction of tarrifs for the basic services and number of new subscribers start to fall.
Strategies of the leading telecom-operators aiming to increase their revenues from mobile apps
Operators are developing strategies in order to increase profit from VAS. For example, launch tariff plans for smartphones that help increase ARPU from the use of VAS and purchase companies producing VAS.
In the research are presenting the strategies of the leading world and Russian telecom operators:
China Mobile, Vodafone, Telefonica, Orange, Airtel, America Movil, AT&T, Verizon, MTS, Beeline and Megafon.
As a result several strategies that used by telecom operators had been identified:
Creation of the own apps shops
Creation of the own apps
Integration of operator’s billing in the mobile apps
Selling mobile phones and smartphones with the implemented mobile apps from operator
Creation of the specialized community of mobile apps developers with a certain instruments and services
Creation of platforms for mobile apps development
Creation of the additional instruments for developers of mobile apps
Creation of the new model for mobile apps revenues diversification
Development of the own operational systems for smartphones
Implementation of the standard API operators’ services
The development and implementation of the platforms for content selling
Detailed results of the research are presented in the full version of the report: “Strategies of the Telecom-operators in the Mobile Apps Sphere” (72 p.)
3. Sources and Methodology
4. Mobile apps market overview in Russia and in the world 2010-2015
4.1. Development of russian and global mobile apps markets, 2010-2015
4.2. Key market players and platforms
4.2.2. Google Play
4.2.3. Windows Phone Store
4.2.4. Other platforms for selling mobile apps
4.3. Market drivers and barriers
5. Content VAS market overview in Russia and in the world, 2010-2015
5.1. Development of russian and global content VAS market 2010 – 2015
5.2. On portal vs. off portal
5.3. Market drivers and barriers
6. Review strategies for revenue increasing with a help of mobile apps of the leading
6.1. Operators’ apps
6.2. Operators’ shops
6.3. Branded smartphones
6.4. Strategies of the leading mobile operators
6.4.1. China Mobile
6.4.6. America Movil
7. Adjacent markets
7.1. Smartphones makret in Russia and in the world
7.2. Broadband wireless connection in Russia and in the world
List of companies mentioned in the report
Annex 1. List of abbreviations
Annex 2. Screenshots of mobile apps shops
List of Figures
Fig.1. Global mobile apps market, bln.USD
Fig.2. Volume and dynamics of global mobile apps market, bln. USD
Fig.3. Volume and dynamics of russian mobile apps market growth, mln. USD, 2009 – 2012
Fig.4. Volume and dynamics of mobile apps market growth, mln. USD, 2013 – 2016
Fig.5. Structure of the mobile apps russian market, mln.USD, 2010 – 2016
Fig.6. Dynamics of the global mobile VAS market (bln.USD), 2011-2016
Fig.7. Global market of mobile access to the Internet, 2011 – 2016
Fig.8. Global market structure of mobile VAS (bln.USD) in 2009 – 2016
Fig.9. Compairing revenues of mobile content services and mobile apps that have been paid via OTT services (bln.USD) in 2009 – 2016
Fig.10. Revenue share of non-voice services by countries, 2011-2012
Fig.11. Forecast of VAS services market development in Russia, 2012 – 2016, bln.RUB
Fig.12. VAS market structure in Russia, bln. RUB
Fig.13. VAS share in the revenue structure of the mobile operators in Russia, 2012-2016, %
Fig.14. Smartphones global market volume, 1Q 2011 – 1Q 2013, mln.pcs.
Fig.15. Smartphones global market structure by operational systems, 1Q 2011 – 1Q
Fig.16. Smartphones market volume, Russia, 1Q 2011 – 1Q 2013, mln.pcs.
Fig.17. Smartphones’ market structure by operational systems, Russia, 1Q 2011 – 1Q 2013, %
Fig.18. Subscribers base (thousand) and market shares of LTE operators in Russia, 2012
Fig.19. Subscribers base (thousand) and market shares of LTE operators in Russia, 2012
Fig.20. Number of commercial networks and LTE subscribers in the world, 2012-2017
List of Tables
Table 1. Revenue structure of MTS company of mobile VAS in Russia 2011-2012, mln.RUB, %
Table 2. China Mobile company profile
Table 3. Vodafone company profile
Table 4. Telefonica company profile
Table 5. Orange company profile
Table 6. Airtel company profile
Table 7. American Movil company profile
Table 8. AT&T company profile
Table 9. Verizon company profile
This Information Note is Prepared by J’son & Partners Consulting, We strive to provide factual and prognostic data that fully reflect the situation and are available to us before issuing the material. J’son & Partners Consulting reserves the right to revise the data after publication of new official information by the market players.
For additional information:
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