Build enduring leadership with VAS

Jean-Claude Delcroix/Gartner
07 Feb 2012
00:00

Through 2015, communications service providers (CSP) will try to redefine their business scope and participate in new areas beyond traditional telecom services. One area for expansion is value-added services (VAS), including IT services and cloud computing, fixed and mobile content services, and advertising and payments. VAS will have a direct influence on revenue and profitability as well as on the market share for traditional services.

Creating long-term competitive advantage and gaining leadership in geographic markets is all about differentiation. Gartner identifies nine main competitive factors enhancing the competitive position of a CSP when offering VAS.

First is having an attractive VAS catalog by offering services, applications and content that are richer and more adapted to market segments (by age of social cultural dimensions) than competitors. Search engines are also very important to guide users or to present titles meeting their preferences. Most CSPs stick to the top 1,000 or top 3,000 movies (sometimes fewer than this).

Differentiation and competitive advantage in content and applications should come from CSPs' products that offer the widest range of content and applications in several languages, add-ons, and supporting devices. These also include the most user-friendly search engines and preference management, and the best links to social networking, recommendation engines and free content.

Second is having better brand value and advertising power with good design and functionalities, including advanced lifestyle applications and hyped content. The investment for this type of content can sometimes cost more than the direct selling of content subscriptions but it also increases market share in other products, which has a tremendous impact on a brand's value.

This should come from CSPs that highlight the wide range of VAS in their branding and advertising, and consider some innovative VAS trials as advertising methods. They also come from CSPs that promote the power of their content and other applications through social networks, and use websites and mobile apps to help with finding and using VAS.

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