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Mobile Value-added Services (VAS) in 4G: Market Analysis and Forecasts for LTE-based VAS 2013 - 2018

Mobile Value-added Services (VAS) in 4G: Market Analysis and Forecasts for LTE-based VAS 2013 - 2018

In the pre-LTE marketplace, the biggest mobile value-added services (VAS) are mobile apps and mobile advertising. This does not change simply with the introduction of LTE, as there will only be roughly 184 million LTE subscribers globally against 7.2 billion subs overall by year end 2013. A transformation will occur over a period of years in which certain key mobile VAS applications will establish a sustainable market position for the network operators. In fact, this must occur for carriers to establish new revenue streams for business growth beyond core voice and data services as well as anticipated margin squeeze.

The first part of this report assesses the current state of LTE. The report then analyzes value-added services (VAS) in the post LTE era. The research takes an umbrella approach as it evaluates data, mobile advertising, and mobile apps first, and then considers market verticals. Mind Commerce explains how revenues are realized in each market. Mind Commerce examines Rich Communications Suite (RCS) and Voice over LTE (VoLTE). The report describes how the market will develop, in general, and also evaluate what countries are likely to adopt VoLTE by taking a detailed look at infrastructure, spectrum, and the competitive landscape in each country.

The report includes forecasts for 2013 – 2018 for every major VAS application category including:

  • Mobile Data
  • Voice over LTE (VoLTE)
  • Rich Communication Suite (RCS)
  • Mobile Advertising
  • API-based Apps
  • Social Networking
  • Coupons and Loyalty
  • Geo-location
  • Mobile Gaming
  • Mobile Virtual Goods
  • Video, TV, and Second Screen
  • Mobile Health
  • Mobile Entertainment
  • Machine-to-Machine (M2M)
  • Connected Vehicles
  • Public Safety
  • Messaging (non RCS)
  • Small Cell Targeted Advertising
The report includes conclusions and recommendations for network operators, content providers, application developers, and infrastructure providers. The Report also includes vendor analysis from selected companies including Empirix, OpenCloud, Openmind Networks, Samsung, and Tropo.

Key Findings:

Challenges to carrier business include existing concerns, such as Over-the-Top (OTT) service providers, as well as emerging threats such as Direct (Peer-to-Peer) Communications, which shall ironically be enabled via LTE.

Network operators must deal with the threat of these “dial around” voice over wireless IP (or VoIP over Wireless OTT) OTT service providers by offering their own “dialable” VoIP. Dialable VoIP is enabled through Voice over LTE (VoLTE). Network operators must also offer Rich Communications Suite (RCS) as a multimedia VAS application to combat OTT competition. Carriers must also embrace API integration with various third-parties to offer their own VAS.

It is our strong recommendation to incumbent carriers that they recognize that core bearer based revenues will go down over time. They must leverage LTE infrastructure and capabilities to offer their own differentiating capabilities including premium-priced VAS applications

Report Benefits:
  • Global and regional forecast for key apps: VoLTE and RCS
  • Forecasts for 2013 – 2018 for every major LTE VAS application
  • Identify challenges and opportunities for LTE services providers
  • Understand the business drivers and key success factors for VoLTE and RCS
  • Identify opportunities for infrastructure providers and application developers
  • Understand LTE technology and supporting next generation network infrastructure
  • Identify emerging opportunities including Connected Vehicles and Small Cell Advertising
Target Audience:
  • OSS/BSS Solution Providers
  • Mobile Network Operators
  • Mobile Software Developers
  • Mobile Payment Service Providers
  • Handset and Tablet Manufacturers
  • Content and Applications Mediators
  • Social Commerce Vendors and providers
  • Mobile Marketing and Advertising Providers
  • Telecommunications Infrastructure Providers


General Methodology

Mind Commerce Publishing's research methodology encompasses input from a wide variety of sources.

We rely heavily upon our Subject Matter Experts (SME) in terms of their market knowledge, unique perspective, and vision. We utilize SME industry contacts as well as previous customers and participants in our market surveys and interactive interviews.

In addition, we rely upon our extensive internal database, which contains modeling, qualitative analysis, and quantitative data. We review secondary sources and compare to our primary sources to update previous findings (for prior version reports) and/or compile baseline information for technology and market modeling.

We share preliminary models with industry contacts (select previous clients, experts, and thought leaders) to verify the veracity of initial modeling. Prior to final report production (analysis, findings, and conclusions), we engage in an internal review with internal SMEs as well as cross-expertise, senior staff members to challenge results.

We believe that forecasts should be prepared as part of an integrated process which involves both quantitative as well as qualitative factors. We follow the following 3-step process for forecasting.

Forecasting Methodology

Step 1 - Forecasts Input: The inputs for the present and historical revenues are derived from industry players. Financial and other quantitative data for individual sub-market categories are derived from original research and tested with interviews with major industry constituents.

Step 2 - Forecasting of Future Years: Mind Commerce extends forecasts based on a variety of factors including demand drivers as well as supply side data. Key success factors and assumptions are considered.

Step 3 - Validation of Data: The final step is to validate projections, which is accomplished in consultation with both internal and external industry experts, including both topic and regional experts. Adjustments are made to the forecasts based on factors identified throughout this process.


1.0 Executive Summary
2.0 Introduction
3.0 Long Term Evolution (Lte)
3.1 Lte 2013 Status Update
3.2 Lte Subscriptions
3.3 Lte Release 11 And The Roadmap Beyond
3.4 Lte Direct
3.5 Lte Direct Applications
4.0 Lte Value-added Services (Vas)
4.1 Assumptions About Mobile Subscriptions And Mobile Data
4.2 Mobile Data
4.3 Mobile Advertising
4.4 Api-based Apps Downloads
4.5 Social Networking/Matching
4.6 Coupons, Loyalty And Venue-based Services
4.7 Geo-location Based Services
4.8 Mobile Gaming
4.9 Mobile Virtual Goods
4.10 Video, Tv, Pay-tv And Second-screen
4.11 Mobile Health
4.12 Music Services (Including Ringback And Ringtones)
4.13 Machine-to-machine (M2m)
4.14 Connected Vehicles
4.15 Public Safety Lte
4.16 Messaging, Texting, And Sms (Not Related To Rcs)
4.17 Small Cell Targeted Advertising
4.18 Miscellaneous Subscription Services
4.19 Lte Vas Roll-up
5.0 The Most Actively Anticipated Vas: Volte
5.1 How Volte Works
5.2 Why Volte Is In The Best Interests Of Mobile Operators
5.2.1 Management Of Macro Spectrum
5.2.2 Greater Efficiency Of Micro Spectrum
5.2.3 Improved Qos
5.2.4 Less Hardware And Cots Equipment
5.2.5 Roaming Will Be Dramatically Easier
5.2.6 Less Expensive Per Bit Backhaul
5.2.7 Comparable Device Perform Better On Lte Than On 3g Networks
5.3 Factors That Could Slow The Growth Of Volte
5.3.1 Spectrum Issues Including The Lack Of Globally Harmonized Spectrum
5.3.2 Lack Of Spectrum Coherency In The United States
5.3.3 Device Manufacturers Are Reticent To Support Volte
5.3.4 Technical Challenges In The Network
5.3.5 Relaxed Rules On Network Sharing In The European Commission
5.3.6 The Global Recession Continues
5.4 The Status Of Current Volte Mobile Operators
6.0 Rich Communications Suite (Rcs)
6.1 Rcs/Joyn®
6.2 Release Standards, Suites And Profiles In The Joyn® Platform
6.3 Rcs/Joyn® As Of Today
6.4 Rcs/Joyn® And The Elephant In The Room
6.5 Rcs Approaches Not Involving Joyn®
6.6 Ott Service Providers
6.7 Mobile Operators Versus Over-the-top Service Providers
6.8 Mobile Operators And Ott Providers: Coexistence?
6.9 Rcs/Joyn Revenues
7.0 Prospects For Volte And Rcs Deployments By Region
7.1 Asia Pacific
7.1.1 Australia
7.1.2 China
7.1.3 Hong Kong
7.1.4 India
7.1.5 Japan
7.1.6 South Korea
7.1.7 Rest Of Asia Pacific
7.1.8 Forecast Asia Pacific Volte
7.2 Cala
7.2.1 Argentina
7.2.2 Brazil
7.2.3 Chile
7.2.4 Colombia
7.2.5 Mexico
7.2.6 Puerto Rico
7.2.7 Rest Of Cala
7.2.8 Forecast Cala Volte
7.3 Eastern Europe
7.3.1 Hungary
7.3.2 Poland
7.3.3 Romania
7.3.4 Russia
7.3.5 Rest Of Eastern Europe
7.3.6 Forecast Eastern Europe Volte
7.4 Middle East And Africa
7.4.1 Continental Africa
7.4.2 Saudi Arabia
7.4.3 South Africa
7.4.4 Rest Of Middle East And Africa
7.4.5 Forecast Middle East And Africa Volte
7.5 North America
7.5.1 Timeline Of Activities In The North American Market
7.5.2 At&T
7.5.3 Bell Mobility
7.5.4 Clearwire
7.5.5 Rogers Wireless
7.5.6 Sprint
7.5.7 Telus Mobility
7.5.8 T-mobile/Metropcs
7.5.9 Verizon Wireless
7.5.10 Rest Of Region North America
7.5.11 Forecast North America Volte
7.6 Western Europe
7.6.1 Strategies Of The Pan-european Mobile Carriers
7.6.2 France
7.6.3 Germany
7.6.4 Italy
7.6.5 Spain
7.6.6 Sweden
7.6.7 United Kingdom
7.6.8 Rest Of Western Europe
7.6.9 Forecast Western Europe Volte
7.7 Roll-up Forecast Global Volte
8.0 Vendor Analysis
8.1 Empirix
8.2 Opencloud
8.3 Openmind Networks
8.4 Samsung
8.5 Tropo
9.0 Conclusions And Recommendations
9.1 Carriers
9.2 Content Providers
9.3 Application Developers
9.3.1 Consumer Market
9.3.2 Enterprise Market
9.3.3 Independents
9.4 Infrastructure Providers
9.4.1 Ericsson
9.4.2 Huawei
9.4.3 Nokia Siemens Networks
9.4.4 Alcatel-lucent
9.4.5 Zte
9.5 Wireless Device Providers
9.5.1 Overview
9.5.2 Lte Handset Issues
10.0 Glossary
11.0 Appendices
11.1 Lte Technology And Architecture
11.1.1 Lte Technology
11.1.2 Lte Advanced
11.1.3 Lte Infrastructure Elements And Architecture
11.2 Lte Architecture Details
11.2.1 Service Architecture
11.2.2 Layer 2 Of Lte
11.2.3 Downlink Logical
11.2.4 Uplink Logical
11.2.5 Mobility Across Enbs
11.3 Ip Multimedia Subsystem (Ims)
11.4 Service Centralized And Continuity Application Server (Scc)
List of Graphs
Figure 1. Depiction of LTE Direct Public Expression
Figure 2. Qualcomm Differentiated Apps/Services for Proximate Discover
Figure 3. Evolution of Mobile Advertising
Figure 4. VoLTE Commitments and Deployments, GSA May 2013
Figure 5. Legacy Services, RCS-e, and RCS5
Figure 6. OTT Service Providers vs. Mobile Operators
Figure 7: Dynamic Address Book (DAM)
Figure 8: Wireless Network Infrastructure RAN Vendor Ranking Matrix 2012
Figure 9: Core Network Vendor Ranking Matrix 2012
Figure 10: 4G Handset Technical Issues
Figure 11: LTE E-UTRAN Infrastructure Network Elements
Figure 12: LTE EPC Infrastructure Network Elements
Figure 13: Understanding LTE Network Elements and Channels
Figure 14: IMS Planes
Figure 15: IMS Model
Figure 16: Service Centralized and Continuity Application Server
List of Tables
Table 1. Global Value of All LTE VAS, $US Millions, 2013- 2018
Table 2. LTE in 2013
Table 3. LTE Subscriptions, by Region, Subscriptions Millions, 2013-2018
Table 4. Formal Status of LTE Release 10, 11, and 12
Table 5. Mobile Subscriptions by 2G/3G and LTE, Subscriptions Millions, 2013-2018
Table 6. Mobile Data Consumption per Mobile Subscription, by 2G/3G and LTE, Subscriptions Millions, PB, 2013-2018
Table 7. Estimate Revenues Made by Mobile Operators. From Data Usage Plans, % of Which Comes From LTE, $US Millions, 2013-2018
Table 8. Mobile Advertising Revenues by Type and by Device, all Mobile, $US Millions, 2013-2018
Table 9. Mobile Advertising Revenues Derived from LTE VAS, by Type and by Device, $US Millions, 2013-2018
Table 10. Size of Mobile Apps Market (less Embedded Advertising), Revenues from LTE, $US Millions, 2013-2018
Table 11. Financial Milestones in Social Media
Table 12. Metrics, Tendencies, and Nuances in Mobile Social Networking
Table 13. Estimated LTE VAS Revenues from Social Networking Sites (Memberships and Ad Revenues), $US Millions, 2013-2018
Table 14. Value of Mobile Coupon Redemptions, LTE, $US Millions, 2013-2018
Table 15. Value of Mobile Coupons, Loyalty-Based, and Venue Based Services, All Mobile and LTE, $US Millions, 2013-2018
Table 16. Acquisitions of Location-Based Services Companies or Technical Collaborations
Table 17. Global Market Size of Location-Based Services (LBS) and Ad Revenues from LBS, $US Millions, 2013-2018
Table 18. LTE Global Market Size of Location-Based Services (LBS) and Ad Revenues from LBS, $US Millions, 2013-2018
Table 19. Revenues from Global Gaming Apps Market and From Ads from the Mobile Gaming Market, $US Millions, 2013-2018
Table 20. Revenues from Global LTE Gaming Apps Market, LTE Mobile Ads, and LTE Gaming Subscription Services, $US Millions, 2013-2018
Table 21. Approximate Value of LTE Data for Video, Web Browsing and Internet, and used to Play Mobile Games, $US Millions, 2013- 2018
Table 22. Revenues from Mobile Virtual Goods and from LTE Virtual Goods, US$ Millions, 2013-2018
Table 23. Revenues from Multiscreen, Streaming TV Services and Pay TV, VOD, Revenues from LTE, $US Millions, 2013-2018
Table 24. Revenues from Mobile Health Services, Revenues from LTE, $US Millions, 2013-2018
Table 25. Revenues from Music Subscriptions Services, Songs Downloads, Music Videos, Ringtones, and Ring-backs, Revenues from LTE, $US Millions, 2013-2018
Table 26. M2M Cellular Connections and Revenues, LTE Connections and Revenues, Subs Millions, $US Millions, 2013-2018
Table 27. Connected Automobile and Revenues from Automotive VAS, Connections that are LTE and Revenues, $US Millions, 2013-2018
Table 28. Points of Interest about the US Public Safety Including FirstNet
Table 29. Revenues from LTE Public Safety, $US Millions, 2013-2018
Table 30. Revenues Derived by Mobile Operators from LTE Texting (Discrete Service), $US Millions, 2013-2018
Table 31. Global Ad Revenues from Small Cells, US$ Millions, 2013-2018
Table 32. Revenues from Miscellaneous LTE VAS, $US Millions, 2013-2018
Table 33. LTE Value-added Services, Type of Service, $US Millions, 2013-2018
Table 34. Major OTT Communication Service Providers
Table 35. RCS/joyn® Subscribers, LTE Subs, by Region, Subs Millions, 2013-2018
Table 36. RCS/joyn® Subscriber Revenues, Revenues from LTE, by Region, $US Millions, 2013-2018
Table 37. RCS/joyn® Mobile Ad Revenues, Revenues from LTE, by Region, $US Millions, 2013-2018
Table 38. Asia Pacific VoLTE Subscribers, VoLTE Revenue and VoLTE POP, Revenues US$Millions, Subscribers and POP in Thousands, 2013-2018
Table 39. Brazil Mobile Subscriptions (as of May 2013), Subscriptions in Millions, % of Overall Market
Table 40. CALA VoLTE Subscribers, VoLTE Revenue and VoLTE POP, Revenues US$Millions, Subscribers and POP in Thousands, 2013-2018
Table 41. Local Eastern European Mobile Operators Owned by pan-European Operators, Subscribers in Millions, Ownership by Operator
Table 42. Eastern Europe VoLTE Subscribers, VoLTE Revenue and VoLTE POP, Revenues US$Millions, Subscribers and POP in Thousands, 2013-2018
Table 43. Middle East and Africa VoLTE Subscribers, VoLTE Revenue and VoLTE POP, Revenues US$Millions, Subscribers and POP in Thousands, 2013-2018
Table 44. Long-term Objectives of Sprint Network Vision
Table 45. North America VoLTE Subscribers, VoLTE Revenue and VoLTE POP, Revenues US$Millions, Subscribers and POP in Thousands, 2013-2018
Table 46. European Countries where pan-European Carriers have National Markets
Table 47. Vodafone LTE and RCS/joyn® Presence in Europe
Table 48. Western Europe VoLTE Subscribers, VoLTE Revenue and VoLTE POP, Revenues US$Millions, Subscribers and POP in Thousands, 2013-2018
Table 49. Global VoLTE Subscribers, VoLTE Revenue and VoLTE POP, Revenues US$Millions, Subscribers and POP in Thousands, 2013-2018

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