RISE IN SMARTPHONE OWNERSHIP GIVES PUSH TO N162bn VAS MARKET IN NIGERIA

Nigeria’s N162 billion ($1 billion) mobile Value Added Service (VAS) market is set for significant growth in the next few years, riding on the back of rising smartphone acquisition, the opening of new market as well as sustained effort by government and telecommunication companies (telcos) to enhance broadband availability, industries insider have said.
The national broadband Council is pushing for increased 3G coverage to 50 percent of the Nigeria population by 2015.
The number of smartphone user is, however, is expected to rise to more than 35 million in 2017 from 5.6 million as at the end of 2012, according to research company informa and Telecoms and Media.
The African’s mobile VAS market is expected to reach $11.5 billion by the end of 2014. The mobile VAS sector will witness significant growth due to rising smartphone penetration said UgoOkoye, chief executive officer (CEO), iconcept Limited.
Low-end smartphone are increasingly available and these type of mobile phone will likely grow at CAGR (compound annuals growth rate) of 15 percent over the coming years, according to market observers. With more smartphones in the hand of Nigeria, there would be a greater innovation with regard to creating new and better content service that everybody can use, said Okoye in an interview with Business Day.
According to him, the Mobile VAS sector has witnessed enormous growth in recent time because Mobile network Operation (MNOs) on longer rely solely on voice services for revenues. Initially
When the mobile network rolled out services in 2001 according to him over 99 percent of their service revenue was derived from voice.
“that has slowly declined year on year (YoY). Currently, VAS contributes about 10 percent of telecom operators revenue” he also stated.
Market observer are in the view that increasing adoption of smartphone and tablet PCs in enhancing the demand for for and used of Mobile VAS. This growth according to them, will continue over the years, as local content developers, MNOs the regulator, and other shareholders jostle to expand the scope of the market.
Paul Lee, director, global TMT research leader for Deliotte, said in an interview that the widespread adoption and used of instand messaging services (MIM) from over the Top (OTT) providers like Whatsapp, Viber, facebook and BBM, is an indication that communication no longer occurs exclusively on voice, especially amongst the nation vibrant youth population. This development is contributing significantly to declining voice revenues. Average Revenue per User (ARPU) for voice services is expected to declined steeply by the around $5 per month over the next years.
The figure is down from $6-$7 in April 2013 and $10 in 2008. “ the telecom operators have seen that smartphone penetration is on the rise and data service is the future. ”
“so, MNOs have to create a lot more VAS services such as mobile apps and content services. That’s is the only way they can find the right balance in their revenue stream”. Said the iConcept CEO.
Market observers say mobile VAS will become a sizzling growth ticket for telecoms operators, opening up new revenue over the next decade.
We are aggressively working with the original equipment manufacturer (OEMs) to push smartphones into the hands of Nigerians” said OsonduNwokoro, director, regulatory affairs, Airtel Nigeria.

source: Ben Uzor Jr./Business Day