Major Trends of the Russian Mobile Content Market (2006-2007)

The Russian VAS Current market in 2006-2007

In parallel with the World wide web universe the Russian mobile entire world is emerging rapid. In 2006 the Russian benefit-included products and services (VAS) sector produced steadily, and ongoing its growth in 1Q 2007, reaching USD 615 million, a 34% year-on-12 months expansion, claimed ComNews Analysis. All 3 significant gamers of the VAS industry, operators, material companies (CP) and aggregators, as nicely as subscribers are developing with it. Big Russian cellular operators released much more aggressive and assertive insurance policies in the VAS scene, launching new WAP-portals and expert services and seriously minimizing the number of content material companions. The VAS share in operators’ total earnings construction achieved 14% in 1Q 2007. With the start of the to start with 3G networks in 2007-2008, Russian operators will only improve their written content supplying. Consolidation and stricter plan by operators lower the number of core content companies to 80-100 providers. Past yr CPs honed their techniques in furnishing IVR and RBT companies, pushing for extra online video information, mobile game titles and group providers.

Main CPs pushed for improved good quality articles giving, introduction of new solutions and global current market enlargement. Now the profitable components of the Russian VAS current market is making certain information good quality and diversification of items and companies. IVR, SMS-based mostly Television set lotteries, RBT and cell online games starred in the most preferred and prosperous content material companies portion. IVR services caught the “Lady Luck” of revenues in 2006. In addition, continuous WAP penetration growth, mobile group solutions and consumer-generated articles all promised that this 12 months will be constructive.

Having said that, the usually resurgent market place has its pinch of salt. Piracy is on the increase, although very low content high-quality and SMS-spam remained a significant obstacle to the market’s more rapidly improvement. Eventually, remaining superior WAP-targeted visitors charges and operators’ superior earnings shares provide as the added stress to the sector evolution.

What is actually the Title of the Recreation?

Pavel Roitberg, Head of Division of Products and solutions and Providers, MTS, noted at the final Cellular Material Discussion board held in Moscow in June 2007 that “we have modified the procedures of the activity.” Though prior to MTS, the biggest Russian cellular operator, experienced 250-300 content companions, the assessment showed that 70% of all revenues arrive from 15 big partners, 20% from 20 CPs and 10% from 35 partners. As a outcome, MTS ceased contracts with ineffective companions, therefore slicing their overall partner amount to about 100 organizations. And this is quite substantially the exact same circumstance for its rivals, VimpelCom and MegaFon.

Very low quality of material, as very well as an abundance of fraudulent features, diminished subscribers’ trust in CPs and resulted in a sharp tumble of information gross sales in 2005. Finding out from that destructive knowledge, major operators and information providers rushed to assure the far better excellent of cell information. For illustration, MTS made a written content top quality management plan generating its partners right responsible for the articles excellent. At the same time, key Russian CPs created an association to regulate mobile articles offerings.

In 2006 the product sales of “heavy” and high-priced material grew more, as subscribers got far more common with online video, video games, computer software apps and comprehensive mp3 tracks. Subscribers’ purchasing energy in key city regions greater, and they are happy having to pay additional dollars for ‘heavy” written content. A visible craze of 2006 is the resurgence of operators’ routines in the VAS area of interest. Various Russian mobile operators established and promoted their own portals, and took aspect in joint advertising with some most significant content material companies. Furthermore, operators launched new billing methods, these as WAP-tariff: MT-charge and WAP-simply click.

WAP Nets Grow Even more

iKS-Consulting believed an normal regular WAP-viewers in Russia at 14 million users. An typical consumer is male (65%) in the 17-23 age team (60%), says WAPStart exploration. The best expansion fees for new subscribers are in the outlying areas. 71% of subscribers search WAP by way of pre-mounted cell browsers. In April 2006, there were around 80,000 Cyrillic WAP-web-sites. Even so, only about 20 WAP-internet sites have huge every day viewers.

Under is the Top rated-5 of WAP-lookups in May perhaps 2007:

1. Porno – 42.00%

2. No cost Things — 29.49%

3. Computer software (ICQ, jimm, Opera, AV Plans) – 7.23%

4. Gays – 2.75%

5. – 2.65%


MTS has been amongst the most lively mobile operators establishing the VAS market. It introduced a new very well-created WAP-portal and streamlined its cooperation with content material providers, facilitating the information aggregation industry. MTS’ direct competitor and Russia’s quantity 2 operator, VimpelCom (“BeeLine”), started productive voice-CPA and WAP-CPA programs.

In 2006 significant cellular written content providers considerably diversified their companies and ongoing their expansion to the neighboring CIS sector, as effectively as globally, this kind of as INFON (Belarus), InformMobil (Tajikistan, Ga and Kazakhstan), i-Free (Brazil and India) and PlayFon (South Africa, Germany, Latvia, Lithuania, Estonia). Other material vendors, this kind of as A1 and Interactivi honed their expertise in cell advertising and marketing and intellectual branded companies. For example, A1 actively improved major FMCG manufacturers in Russia and launched its new Java-based cellular group services “Ogloblya.” Equally, Interactivi described that in the course of 2006 the organization labored with some 1 million subscribers in Russia and structured more than 60 successful marketing actions.

There had been alterations in promotion procedures as well. Many CPs admitted that Tv advertisement effectiveness is diminishing, whilst prices for putting an ad are skyrocketing. As a result, many CPs shifted their advertisement budgets to the WAP space and B2B partnership improvement. Yet some CPs still count on Tv set marketing, for example, Nikita Mobile was on the 13th location in the Leading-100 significant advertisers record in 2006.

Bumpy Road

Even with the constant growth of the mobile articles market place, many worries remained unresolved. One particular of the most prevalent was the lack of creative written content and products and services. Overall, lower articles high-quality and a lack of training amid subscribers noticeably decreased faster marketplace consider-up. For example, very low good quality SMS-based mostly Television set contests undermined subscribers’ trust: in lots of conditions subscribers acquired a terrific amount of money of SMS-spam. Also, many marketplace analysts mentioned that mobile operators’ profits share was far too higher, and that resulted in an enhance of the content value. In addition, substantial WAP-visitors fees extra to the stress of significantly high priced “significant” articles to cell subscribers.

All About XXX: Cellular Video games Gross sales Established to Mature

Some 15 million copies of mobile game titles have been bought in 2006, believed Playmobile. Mobile online games are perceived by numerous sector analysts and gamers as staying among the the future revenue making giants. The grownup and manufacturer online games generated the most income, and will stay common in 2007, stated DDM in its mobile sport study. Erotic game titles produced almost 50% of revenues, when model game titles accounted for 20%-40% of revenues followed by everyday video games. Between other most likely fascinating goods are several player video games, ad game titles and Pc-title online games.

Leading-3 cell activity developers:


Shamrock Video games


Major-3 Russian mobile video game publishers:


Mobile Information Manufacturing unit


Major-5 Russian cellular activity distributors:






Cell game titles — main sectors:

Informal games

Brand name video games

Grownup game titles

Source: DDM, #1 2007

Dynamic VAS Quarter

In the initially quarter of 2007 the market place ongoing its dynamic advancement. In accordance to ComNews Research, during this period Russian VAS sector totaled USD 615 million, which is a 3% enhance around 4Q 2006, and 34% year-on-year growth. The VAS share in operators’ general earnings structure arrived at 14%.

ComNews Exploration emphasized the developing attractiveness of WAP solutions, as nicely as continuous growth of prices for the end users. The two sides blamed each individual other for the raise in value: operators feel that the trouble lies in the incapacity of CPs to make significant and high quality written content, although CPs believe that that operators have oversized earnings share.

20% of operators’ revenues arrived from the VAS section. The whole composition of VAS revenues (gross) was as follows:

Base solutions – 6% (USD 36 million)

Content material – 20% (USD 124 million)

M-Web – 20% (USD 123 million)

Messaging – 54% (USD 332 million)

Resource: ComNews Investigation

In 1Q 2007, cellular Web brought some USD 123 million to operators, virtually matching mobile content material revenues (USD124 million). The primary developments of 1Q 2007 are pretty much comparable to the kinds in 1Q 2006. Revenues from customization solutions are slipping, whilst IVR and RBT continue on to be on-desire. Other fresh segments are neighborhood providers and m-commerce. So, i-Totally free reported of prosperous launch of its Jamango, a cellular group portal, in a selection of world-wide markets, like India and Singapore. Other tendencies include, mobile cell phone customization at the creation phase and level of popularity of SMS-dependent contest technology.

However, articles operators can no longer dismiss the new pattern: lively promotion of operators’ individual portals. Their gross sales considerably elevated to just about 35%.

Regular income share structure in between CP and operator in 1Q 2007 was 61% and 39% respectively, explained ComNews Analysis.

Cellular content revenue construction:

Customization – 34%

M-Commerce – 3%

Game titles – 14%

Infotainment – 16%

Chat/Neighborhood – 9%

M-Marketing – 6%

Media Assignments – 18%

Off-portal product sales prevailed around portal, with 65% and 35% share of the current market, respectively.

How does the long run seem? According to Playmobile, the expansion of brand and erotic online games income will proceed in 2007. The company estimated that some 25 million copies will be bought this 12 months. A number of role player online games and Computer system-titles game titles will improve. Still, ComNews Investigate predicts that in 2007 the cellular articles sector will expand only 16% and access USD 520 million. To sustain their revenues, CPs will have to think of diversification of their company, relocating to company business enterprise parts.