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Job loss looms in telecoms sector as Ovum report tells networks cut off VAS firms

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Operators of Value Added Services (VAS), a group of third party service providers who rely on networks of GSM providers to drive their business may be in for trouble that may lead to job loss if the advice stemming from latest Ovum report to networks is anything to go by. VAS providers give volume digital services using networks of GSM companies.

Explaining more at the ongoing Mobile World Congress in Barcelona, Spain, Corporate Communications and Marketing Director of Upstream, Stavos Cosmetatos said the Ovum report means a disruptive shift from the way things are done.

Otherwise, the best way to remain in business and grow better confidence amongst subscribers’ is to begin to focus on delivering digital services on their own and stop using third parties because consumers trust them better.

He said these companies already control the billing systems and have the confidence of the consumer so it is important to use digital services as a strategy to maximize consumer experience instead of leaving it to third party providers.

According to Cosmetatos, “This is key if telecoms companies are to attract more people to subscribe to digital services and therefore maximize the monetization of the opportunities”.

The main money in contention is a whooping $70 billion opportunity in digital services which Ovum report said will be pocketed by telecoms operators in emerging markets like including Nigeria and others across Africa, Asia and South America.

The crux of the revelation is coming from a recent research jointly completed by leading mobile commerce company, Upstream and technology research company Ovum, which shows that untapped digital services opportunities in emerging markets alone is valued at $70 billion.

The report, conducted in a number of emerging markets across Africa, Asia and South America, indicates that 72 per cent of consumers stay with a particular operator because of several digital services they get from that operator.

Also, 62 per cent trust telecoms companies more than third party providers to deliver digital services, while another 64 per cent use either carrier billing or mobile money to pay for digital services.

Besides, the Ovum report also noted that some 30 per cent of consumers find digital services unappealing because they lack local content, while 47 per cent say they receive too many digital service messages and 25 per cent say they receive unsolicited messages.

Some 24 four per cent are also interested in rewards for subscribing to digital services, and 37 per cent want the cost of digital services to be reduced.

Indeed, 28 per cent of consumers prefer digital services that are linked to data/air time bundles and 34 per cent prefer services that do not burn their data.

Accordingly, Stavos Cosmetatos is advising companies to adopt more local content in their digital services and also spread the cost of the subscription over a longer period, and offer services as a package with bundles.

He also believes consumers’ request for rewards should be taken seriously by the providers because it will play a key role in their ability to gain from the $70 billion opportunity.

Cosmetatos argued further that some 34 per cent of consumers are not even aware their service provider offers digital services, due to poor marketing on the side of major networks.


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