What is a Value-added Service (VAS) ?

It’s not enough to simply say that a VAS application adds value to Core Services.

Core Services

Core Services

Core Services can be Support Services, Basic Services, or Complementary Services.

All VAS share the same characteristics:

  1. Not a form of basic service but rather adds value total service offering
  2. Stands alone in terms of profitability and/or stimulates incremental demand for core service(s)
  3. Can sometimes stand-alone operationally
  4. Does not cannibalize basic service unless clearly favorable
  5. Can be an add-on to basic service, and as such, may be sold at a premium price
  6. May provide operational and/or administrative synergy between or among other services – not merely for diversification

Every VAS will demonstrate one or more of the above characteristics. Furthermore, a value-added service will never stand in stark contrast to any of the above characteristics.

Value-added Services

Value-added Services

VAS applications also have a certain time dimension associated with them. Subjectively speaking, a value-added service today becomes a basic service when it becomes sufficiently common place and widely deployed to no longer provide substantive differentiation on a relative basis.

There are two types of VAS. The first service types are those value-added services that stand alone from an operational perspective. These types of services need not be coupled with other services, but they can be. Many non-voice services fall into this category. They are often provided as an optional service along with voice services, but they could be offered and used by themselves without the voice service. For example, SMS could be offered and used as a service without voice calling.

The second, and arguably more numerous and important type of VAS, are those services that do not stand-alone. Instead, this category adds value to existing services. While it seems implicit in the definition of value-added, this is an important principle that makes value-added services stand apart from other services.

Todays’ VAS = Tomorrow’s Marginalized Application

One of the key things to understand about VAS is that by their very nature their value is fleeting.  VAS apps must be constant reinvented, reintegrated, updated, etc.  By way of example, ten years ago inter-carrier messaging was considered by many a VAS as it added great value to simply text messaging.  Now it is rapidly becoming a commodity.

About Mind Commerce

Analysis of telecom and ICT infrastructure, technologies, and applications.
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