Value added and multimedia services continue to develop in Russia. Telecom carriers seek for opportunities to offer bundles, including pay TV and mobile internet, which allow for both increase ARPU and reduce churn.
Among other important segments of the mobile VAS and multimedia market last year were SMS payments and ringback tones, which will be outstripped by applications and games in the future.
According to the report “Value added and multimedia services in Russia 2013. Development forecasts for 2013-2017” recently published by PMR, a research and consulting company, the Russian telecommunications services market, including value added and multimedia services as well as pay-TV increased by 5.6% y-o-y to RUB 1,221bn (€30.5bn) in 2012. The main market segments – mobile and fixed voice telephony as well as fixed line internet access – have already reached maturity and do not present operators with further large increases in sales revenues.
Russian telecom companies need to invest in network expansion and upgrade to increase both capacity and services’ availability to the end users. At the same time growing competition and stable or falling prices for basic telecommunication services on the market are putting further pressure on their profitability and earnings. As such, telecom operators started to develop other sources of revenue paying more attention to promoting different digital content products and services in their networks and an overall increase in ARPU.
A growth area for mobile telephony operators is the development of different product and services for the mobile multimedia content and value added services market. The launch of 3G networks and a fast increase in the number of smartphones in the country give the possibility for fast sales growth in this area. However, this market appeared to be more competitive. Besides the telecommunications operators, the vendors of mobile software applications (offered by appstores and numerous over the top providers) as well as other players compete for users.
Interest in multimedia content and added value services was observed in both the fixed and mobile segments of the telecommunications market. Fixed line operators are actively developing pay TV services offering the users a so-called triple play solution which includes fixed telephony, broadband internet access and broadcasting TV channels. The operators mention that the quality of their TV offer is an important decision making factor for the users and a driver of broadband internet and voice telephony sales. In addition to TV broadcasting the operators develop and offer users video on demand (major operators developed their web based portals of digital content), individual packaging of TV channels, access to digital games and content from smart TV sets as well as some other premium services including news and even ordering food for home or office delivery.
“Among the key trends observed recently on the mobile value-added services market in Russia it is important to note that the market structure has been gradually changing. First of all, content developers gained the chance to sell their solutions via appstores, avoiding content providers – they may only have a partnership with content providers for SMS payments or other payment processing. Secondly, content providers are paying more attention to the development of their own mobile products and services. Finally, some tangible brands including retailers, banks, etc. have launched their mobile applications, allowing access to their services” – Pawel Olszynka, a PMR analyst and one of the report authors, comments.
Mobile operators has already started to benefit from the sales of mobile internet, but the market in terms of its development (3G and LTE networks) remains relatively new, with a significant growth capacity. The Russian mobile internet market is now expected to show dynamic growth in 2013-2014 mainly due to further geographic expansion of mobile networks and an increasing number of smartphones and tablet PCs in use in the country.
The mobile multimedia content and value-added services market will grow even more dynamically over the same period, fuelled – besides the mentioned growing penetration of mobile devices – also by a decline in the price of mobile internet access in the country as well as the launch of new multimedia products on the market facilitated the demand for content and services in mobile operators’ networks.
Mobile video, applications (including in-apps of mobile operators) and games will gradually take over the market, replacing ringback tones and SMS payments as market leaders. The sales of pay TV services will continue to increase, although its rate of growth in the next two years will be lower in comparison to the mentioned mobile VAS services.
This press release is based on information contained in the latest PMR report entitled “Value added and multimedia services in Russia 2013. Development forecasts for 2013-2017”. You are welcome to contact the author of the report: Paweł Olszynka, Head ICT Market Analyst, tel.: +48 12 618 90 60, e-mail: [email protected]
For more information about the report please contact PMR’s Marketing Department, tel.: +48 12 618 90 00, e-mail: [email protected]
