Revenues from mobile value added services (VAS) are forecast to see a seven per cent decline in CAGR in Europe over the next five years, according to Ovum. The analyst firm also expects mobile VAS revenues to grow at a slower pace over the next five years globally.

Worldwide, mobile VAS revenues are expected to grow at a CAGR of ten per cent from 2013 to 2018, according to Ovum’s market forecast, driven predominantly by the African and Asia-Pacific markets.

Other regions will fair better. Mobile VAS revenues are expected to grow at a CAGR of 13 per cent in Asia-Pacific and 12 per cent in the Middle East and Africa. Ovum said that the African market shows the greatest potential, given that it is still in the early stages of development and currently has lower revenue base than the rest of the world.

The high growth in Africa will be propelled by services based on mobile entertainment and mobile utility, said Ovum. The region’s growth is also heightened by the fact that Africa is a mobile-first market, which leads to more services being consumed on mobile than on the PC.

Growth of mobile VAS revenues in Asia-Pacific will be sharp due to the large-scale consumption of operators’ mobile services, particularly personalisation services. According to Ovum, the less-developed markets in Asia-Pacific will see operators constantly reinventing their VAS offerings to provide a wide range of monetizable services, despite a heavy OTT presence. The strong role of the operator in China will also help to drive this trend, the firm added.

“There is a slowdown in play due to third-party services offering apps and content for free. This is strongest in the European markets, with a negative seven per cent CAGR,” said Neha Dharia, analyst for consumer telecoms at Ovum.

“The mobile VAS market is dynamic, and allows telcos to innovate and find new revenue-generating services. Over the next five years, this innovation will focus mainly on mobile payments, connected home, security, and utility services.”