Egypt, which had a 77 per cent penetration of value-added mobile services of as of June, is likely to see it reach 92 per cent by 2017, said a report.

The value-added services (VAS) subscriber base in Egypt is likely to increase at a compound annual growth rate (CAGR) of 8.46 per cent to reach 93.5 million by 2017, according to new report published by Frost & Sullivan, a leading growth partnership company.

With mobile phone transforming from a simple communication tool to an all powerful infotainment and utility tool, mobile operators are now shifting from Voice to Value-Added and Data Services in Egypt.

The Egyptian market has been witnessing an explosive growth in its subscriber base in recent years due to increased affordability, innovative, and price-competitive services offered by the mobile operators, and enhanced features like 3G support.

With declining voice revenues, VAS is going to be a brand differentiation and revenue generation tool for the operators. The relaxation in government policies, accessibility to high-speed data services, and increased availability of innovative applications and services are expected to drive the growth of the Egyptian VAS market.

According to an upcoming Frost & Sullivan Report on the Mobile VAS Market in Egypt, VAS revenues are likely to reach $3.8 billion by 2017, while VAS and data services will contribute over 50 per cent of the overall operators’ revenues in Egypt.

As of June 2011, of all the wireless subscribers in Egypt, more than 50 per cent used person-to-person SMS, 29 per cent used Ring Back Tones (RBT) and Caller Ring Back Tones (CRBT), and 24 per cent used premium content and services. The wireless broadband adoption in Egypt is also slated to increase at a CAGR of 17.2 per cent between 2010 and 2017.

“In a region which is witnessing high competition and declining average rate per User (ARPU), innovative value-added services would help operators remain profitable and retain customers. By 2016, VAS will contribute to more than 50 per cent of the operators’ revenues in Egypt. Services like mobile banking and commerce and mobile social media have the potential to revolutionise the Egyptian VAS industry,” said a Frost & Sullivan ICT expert.

The Frost & Sullivan Report further indicates that the growing wireless market represents a huge opportunity for VAS players in Egypt. The high literacy rate of the target population is also expected to aid the growth in VAS market. 3G infrastructure upgrades and increased affordability due to competitive pricing may provide great growth opportunities for VAS in the Egyptian Telecom market. – TradeArabia News Service