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Nairaland Forum / Science/Technology / Phones / Challenges For Nigeria Mobile Vas In 3g Era (1924 Views)
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Challenges For Nigeria Mobile Vas In 3g Era by okoegwale: 3:36pm On Nov 01, 2007 |
The granting of the 3g license to four companies without auction finally settles the hotly debated issue of 3g licensing. Apart from Alheri Engineering, other winners of the license are already operating GSM Networks in the last few years and the acquisition of the license will help to consolidate their positions and with the last Gsm Licence Holder, Mudabala finally settling for Etisalat as partner in the Nigerian deal,the stage is now set for keen competition. Over the last few years, voice has always been the major revenue base for National Mobile Operators In Nigeria. However, with the rapid development of mobile communication and the licensing of 3g Spectrum, this will greatly increase ability to perform lots of other services that will drastically change the business pattern of the telecom industry and bringing a set of new challenges. Mobile value added services are those services that are not part of the basic voice offer and are availed off separately by the end user. They are used as a tool for differentiations and allow the mobile operators to develop another stream of revenue. As time goes on, a value added service may become commoditized. Nigerian VAS market is grouped along the following categories informational, entertainment and Mobile commerce. For the Nigeria Vas Market to grow rapidly to meet expected demands of the 3G technology, all stakeholders will have to work together to create a self sustaining ecosystems for this growth to sustain. It would take the joint efforts of the all concerned to address significant roadblocks and thus unlock the true potential of mobile VAS in Nigeria. Unfavorable Revenue sharing model between operators and value added service providers and the focus mainly on entertainment based services which appeal only to a segment rather than utility and enterprise based services seems to be a leading cause of slow growth in this sector. To maximize the advantage that 3g technology presents, Operators will have to develop and deploy innovative services that will appeal to subscribers. Mobile phone has gone beyond their fundamental role of communications and have graduated to become the extension of the personality of the subscribers. Phones are no longer only to get in touch but to express themselves, their attitudes, feelings and interest and for these reason, subscribers always want more from their phones. Perception of a good Network is not only from the voice angle but from benefits and value added services they provide. Voice has simply become commoditized and it is no longer basis for differentiations in the mobile Sector. Operators need to focus on Value added services to survive the cut throat competition they are experiencing right now, reduction in voice revenues and to achieve growth forecast. Though presently there are quite a handful of innovative Value added services like the Remote mobile phone book back up, Savemycontacts, Vehicle tracking systems, ring tone downloads and the highly successful caller Tunes. Caller Tunes has demonstrated that subscribers are ready to adopt a service that offers them an option of personalization. Mobile users always want to carry forward their individuality to their mobile phones. While the informational and Mobile Commerce are really struggling in the mobile VAS market in Nigeria, Entertainment Value added services seems to be more popular because they are designed for mass appeal and leisure time usage while Mobile commerce is popular in Banking industry but with few users. Simple reason is that subscribers have not just seen or perceived a compelling reason to engage the Mcommerce and others. British Broadcasting Corporation reported that Nigerians are leading visitors to its site worldwide with 61% and distantly followed by South Africa at 19%.This is a classic example of usage due to compelling reason. In other parts of the world, sport and Adult contents (where allowed) are the chief revenue earners in the mobile value added service industry. Entertainment VAS seems to be the leading service that is driving the VAS market in Nigeria, this is because entertainment based VAS drive the market both value and volume terms. It will make whole lot of economic sense to build Entertainment content drive around the local Nigeria Music and Nollywood which is reputed to have generated N522 Billion Naira. The Nigerian Film industry has grown rapidly to become the third largest film producing industry in the world after Hollywood in the US and Bollywood in India. With the production of over 500 movie titles per year, Nollywood, as the Nigerian film industry has come to be known, is beginning to attract the attention of global cinema and it is increasingly seen as one of Nigeria 's positive cultural contributions to the international community. The Indian Bollywood has just completed the testing of short Bollywood Movies on Mobile phones at the 3gsm conference at Barcelona, Spain and by implication Indian is set for the second invasion and colonization of local movie industries worldwide but this time via the mobile phones. The main players in the Mobile value added service chain in Nigeria apart from the National mobile operators are the content aggregators. They provide content to mobile operators, perform in-house content development and aggregating contents from other small players. They own the short codes and they have a tie up with multiple operators to ensure subscribers of all operators can access same short codes. Revenue sharing chain percentages will either encourage more independent developers or discourage them from rolling out innovative services that will promote the 3G. As it stands right now, if the operators do not radically change the present revenue sharing structures which allows them to retain chunk of the value added services revenue, development efforts might not be encouraging after all. Growth is stifled in the Vas market in Nigeria because National mobile operators are playing safe and concentrating only on mass services for which content is readily available and chances of failure less. Entertainment value added service despite the fact that its practical value is minimal, is popular because of is mass appeal especially to youth segment and it is promoted over Mobile commerce and infotainment which has the capacity to create real value for subscribers. Mere deployment of the 3G Networks will not automatically incite Content aggregators to start developing contents. Additional investments in supporting infrastructure like in areas of Digital map for those going into location based VAS which promises to be one of the leading services in Enterprise solution VAS in Nigeria. Prevalence of low end Mobile Handsets is a major factor in the uptake and penetration of advance mobile technologies. Many services are not performing to their potentials despite their usefulness and many others which cannot be introduced. As the mobile markets grows, most new entrants are the low ARPU end users as most big spenders had already been taken up and hence most mobile handset coming on board might not have the features that support advance technologies. Operators worldwide are taking initiatives to collaborate with Mobile phone makers to make 3G services available to more people with less entry cost through handset development, logistics and marketing initiatives. Notable among such collaborations is the 3G for All campaign spearheaded by the Gsm Association that will reduce 30% off from the LG phone that has been chosen. The 3G for All campaign is the second programme designed by the GSMA to create economies of scale for handset makers and their component suppliers. The GSMA's Emerging Market Handset programme stimulated the development of a range of ultra-low cost mobile phones aimed at first-time buyers in developing countries. Absence of utility services, with high practical value but for lack of publicity and marketing from the developers or Value added service provider side is resulting in unpopularity of such services. National mobile operators will have to review their policy on third party services marketing. While there are no uniform policy regarding third party services marketing across the industry but most operators do not promote third party service no matter how viable such services are. Mobile commerce and infotainment services should be promoted by operators as this will assure subscribers on its workability and dependability rather through rather unknown third party value added service providers. Lastly pricing will play a significant role on the success of Mobile VAS. Presently entertainment VAS has the best pricing because of its perceived value and operators tend at most times to use that as a benchmark for other Mobile VAS like infotainment and mcommerce which are still struggling to gain foothold. While some operators are making Gprs service available to all segments of subscribers, some are actually attempting to make it available to only post paid subscribers. Since Gprs is the chief 3g driver, its fee strategy is an important element in service development. Though monthly rent systems is the most popular method of using the internet worldwide but it might not be suitable for the Nigerian subscribers because they are still unsure of their Gprs usage. Subscribers will seldom buy unlimited use time for a service they are yet to trust and accept. Subscribers are not willing to accept a reduced suite of services in the context of acquiring a degree of cost control which is normally associated with pre-paid accounts while postpaid users have realized that they need better and more timely information to manage their spending on new services. As new 3G services start coming board and homegrown content becomes the norm, users want to have control and visibility over spend limits and service packages and will want to explore other billing options including hybrid prepaid/postpaid accounts and pay per use options. With this method subscribers can quickly sign off any service which they do not find useful. For Mobile Value added services to deliver expected benefits in Nigeria, National mobile operators and 3g license holders must pay attention to overall service development ,value chain reforming and commercial mode creation. There is also need to gather the power of the industry chain, balance the roles in the chain ,cooperate with each other and thus build up the competitive advantage in the development of Nigerian 3G mobile value added service industry. Okoegwale Emmanuel okoegwale_igho@yahoo.com |
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