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Emergence of LTE leads to wider choice of VAS applications

+ BFM Radio (5 December 2012)
+ The Edge (10 December 2012)
+ The Edge Financial Daily (10 December 2012)

Emergence of LTE leads to wider choice of VAS applications

The whole Malaysian nation is raving about 4G Long Term Evolution (LTE) with the recent announcement by Malaysia Communications and Multimedia Commission (MCMC) on the allocation of the spectrum license for LTE service, which is deemed to be the next big thing in the telecommunications industry. But can it keep up to the hope of many or is it merely hype?

A leader in strategic market intelligence and consulting, Spire Research and Consulting believes that the launch of 4G LTE in 2013 has so much more to offer than the typical association of LTE to speed.

“Faster is definitely better. Although LTE comes with faster speed and greater bandwidth, what will actually set one mobile operator apart from the other is how they present and package their services to attract mobile data users,” said Yap Far Loon, Business Development Director, Telecommunication of Spire Research and Consulting.

A timely-released White Paper by Spire Research and Consulting revealed interesting facts about the much hyped LTE and its growth prospect in Asia. Titled, ‘Next Stage for Asia’s Mobile Internet’, the white paper included interesting facts about LTE, a new generation of mobile network technology which is set to revolutionize the use of data services on the move.

“Mobile data traffic is growing exponentially, especially among the younger demographics. Users now want to replicate their desktop experience on their mobile devices, including real-time video conferencing, publishing and social networking. As such, there is no better way than offering and upselling these users to new and differentiated valued-added services (VAS) that will fulfill their pervasive mobility needs,” stressed Yap.

The demand for new VAS will be on the rise. As reports show, the smartphone penetration rate in Malaysia has increased to 27% or approximately 9 million smartphones users in Q1 2012. It has also been reported that 58% of Malaysians surveyed will upgrade their phones in the next six months, while 79% of them will get a smartphone.

Yap also added that mobile operators in the region are investing heavily in infrastructure such as 3.5G HSPA (High Speed Packet Access) and 4G LTE, to meet increasing internet demand. And with the introduction of new VAS into their product portfolio, mobile operators would be able to benchmark their services and products against their peers and monetize from the VAS in the long run.

“Though the excitement revolves around how LTE can speed everything up, mobile operators should understand that the game is not about speed and cheap price packages, as it is not sustainable. It is about how you entice your target market to stay addicted to your services,” said Yap.

VAS has been trending all over Asia with the introduction of cloud services. For instance, VoLTE, a real-time voice translation from Japanese to English by NTT DOCOMO), allows users to make voice calls over an LTE network with high-definition (HD) voice quality. Gemalto has also introduced a brand new mode of payment with the new near field communication (NFC) technology.

“VAS is here to stay. Profitable revenue streams from the 4G LTE network are definitely possible, but only if mobile operators work hard over the next two years to build their infrastructure in VAS. There’s certainly no guarantee that every VAS will gain ROI within 18 months. Despite that, Spire believes that VAS is a strategic play to increase consumer stickiness in the long run,” he concluded.

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