Mobile Value-Added Services (VAS) has historically meant any kind of service beyond voice where the service provider could charge an additional fee. Because it was “value” and it was “added” the thinking was to charge extra for the added value. And these value-added services at one time produced revenue in the double-digit billions of dollars for the mobile service providers. This included SMS until texting became a commodity, and then all kinds of interesting applications such as color ring back tones, mobile music, gaming, etc.
3G networks ushered in the era of “everything is data,” where applications that utilized the data network to add services started to put a dent into these service provider-controlled VAS. For instance, the go-to messaging method went from texting (offered by the service provider) to Facebook, WhatsApp, Skype, Twitter, and Instagram (apps simply running on any data network). A very different paradigm indeed, and one that has rocked the service provider world.
What are some ways that service providers can expand their VAS? Let’s first look at today’s LTE world from a Rich Communication Services (RCS) perspective because that represents the mobile service providers acknowledging the impact of the stand-alone app providers and trying to do something about it. RCS provides chat, voice/video over IP, content sharing, file transfer, and social presence sharing. In other words, you can make phone calls but it’s also a pretty standard social media messaging platform that would be offered by the service providers. An uphill climb for sure since these other applications are out there, stable, and have huge installed bases. But given the service providers still control the service, there is an opportunity to push RCS where there are mobile subscriptions. At any rate, RCS provides basic messaging services, but there is also still an opportunity for traditional value-added services on top of RCS such as voice/video conferencing or even voice mail. But there will also be a need to provide value-added services for the subscribers beyond RCS, which I’ll talk about next week. Whether they are willing to pay for them or not, it is hard to tell right now.