IPRS: The giant (re)awakens

International premium rate services have been overshadowed by other payment and content delivery types, but they are growing and evolving and finding new markets. Paul Skeldon reports

The international premium rate services (IPRS) market, a cornerstone of the telecoms industry, often operates out of sight, with other payment channels and content delivery mechanisms getting all the glory. However, this cornerstone of the telemedia industry continues to evolve in 2024.

Driven by technological advancements, changing consumer behaviours and regulatory shifts, the market is witnessing a blend of challenges and opportunities and a number of companies, not least MT2 and International Premiums – both sponsors and exhibitors and World Telemedia Marbella 2024 – are helping shape this market.

The integration of VoIP and mobile technologies has expanded the reach of premium rate services. This has led to a surge in mobile premium rate services, particularly in emerging markets.

Additionally, the rise of AI and machine learning is enhancing customer experiences and fraud detection.

The increasing adoption of digital platforms and the rise of subscription-based models have also impacted the premium rate market. While traditional premium rate services such as competitions and horoscopes are still popular, there is a growing demand for value-added services, such as content subscriptions and digital goods.

And all this takes place against a backdrop of regulatory changes. Governments worldwide are closely monitoring the premium rate market to protect consumers from fraudulent activities and ensure fair practices. New regulations are being introduced to enhance transparency, consumer protection and revenue sharing between service providers and content creators and, while many in the industry have long been wary of regulation, it is starting to have a positive effect on the sector at a time when opportunity is knocking.

GROWING OPPORTUNITIES

International premium rate services have found a niche in the gaming and entertainment industries, particularly in developing markets. These services offer a unique revenue model for content providers, enabling them to monetize their offerings in regions where traditional payment methods may be limited.

The appeal of premium rate services in developing markets is clear. Many developing markets have low rates of credit card ownership, making it difficult for consumers to make online payments. Premium rate services offer a convenient alternative, as they can be charged directly to the consumer’s mobile phone bill.

In many of these markets mobile phones are the primary means of communication and internet access. Premium rate services are well-suited to these markets as they can be accessed easily via SMS or mobile apps.

Additionally, in some cultures, there is a preference for direct, in-person payments or payments through familiar channels. Premium rate services can provide a familiar and trusted payment option.

Governments in developing markets often support the growth of the premium rate industry, recognising its potential to generate revenue and create jobs.

GAMING AND ENTERTAINMENT

It is the gaming and entertainment sectors in these markets where IPRS is showing greatest promise, with developing markets embracing these content types with the same enthusiasm seen in developed markets and in step with the rapid and ever expanding use of mobile.

The main areas where IPRS is in use in these markets are:

• Game subscriptions and inapp purchases: Premium rate services can be used to offer game subscriptions or in-app purchases. This allows players to access premium content, unlock features, or purchase virtual goods without the need for credit cards.

• Content downloads and streaming: Premium rate services can be used to charge for the download or streaming of games, movies, and other entertainment content. This provides a convenient and secure way for consumers to access digital content.

• Interactive services: Premium

rate services can be used to power interactive services, such as voting in reality TV shows, participating in online quizzes, or playing interactive games.

• Subscription-based services: Premium rate services can be used to offer subscription based services, such as music streaming or video on demand. This provides a recurring revenue stream for content providers.

WHERE IN THE WORLD

The countries and regions that are seeing a surge in IPRS cover all continents.

African countries including Nigeria, Kenya and South Africa have seen significant growth in the premium rate market, driven by the high penetration of mobile phones and the popularity of gaming and entertainment content.

In Asia, India, Indonesia and the Philippines are emerging as key markets for premium rate services, particularly in the gaming and entertainment sectors.

While in Latin America, Brazil, Mexico, and Colombia have seen increasing adoption of premium rate services, especially for mobile gaming and content subscriptions.

CHALLENGES REMAIN

The opportunities to grow and develop the IPRN sector are multiple, but there are some caveats. There is growing competition from free services, where the proliferation of free online content and services poses a significant challenge to premium rate providers.

To remain competitive, premium rate services must offer unique value propositions and highquality content.

Preventing fraud and abuse remains a top priority for the industry. Companies like MT2 and International Premium are investing in advanced fraud detection technologies and implementing robust compliance measures.

Revenue sharing and content licensing is also having an impact. Negotiating fair revenue-sharing agreements with content creators and rights holders can be complex. Ensuring a sustainable ecosystem requires transparent and collaborative partnerships.

Additionally, expanding into emerging markets presents both opportunities and challenges. Understanding local regulations, cultural nuances and payment methods is crucial for success. There are also infrastructure challenges in some developing markets can hinder the adoption of premium rate services.

WHERE IS THE MARKET HEADING?

While the industry works to overcome these challenges –and it will overcome them, it always does – there is much to be hopeful for. IPRS quietly evolves and delivers some excellent services worldwide and there is more to come as the wider VAS and content markets, both in developing countries and elsewhere continue to evolve.

For instance, the premium rate market is likely to converge with the broader digital content industry. Premium rate services will increasingly become a component of larger digital ecosystems, offering value-added features and personalised experiences.

At the same time, mobile premium rate services will continue to grow, driven by the increasing penetration of smartphones and the demand for mobile-optimised content.

As concerns about data privacy and security intensify, premium rate providers will need to invest in robust data protection measures and comply with evolving regulations like GDPR. To stay relevant, companies must focus on innovation and differentiation. This includes developing new service offerings, leveraging emerging technologies, and providing exceptional customer experiences.

However, there are also significant opportunities for growth. As mobile phone penetration continues to increase and internet connectivity improves, the demand for premium rate services is likely to rise.

By addressing the challenges and capitalising on the opportunities, content providers can leverage premium rate services to expand their reach and generate revenue in developing markets.