The further development of mobile money services and the need for relevant local content are needed to drive telecom growth and applications development, according to a variety of speakers at last week's VAS Africa event in Johannesburg, According to Informa Telecom & Media, the event's organizer, over 250 VAS specialists including mobile operators, solutions vendors, content owners and applications developers gathered at the two-day conference.Value-added services have shifted from pure entertainment tools to more useful or even "vital" services including financial products in the last three years, noted Thecla Mbongue, a senior analyst with Informa.

"Mobile money is currently deployed in 22 markets," she said, in remarks prepared for the conference. "Flexibility of platform allows it to attract all customer segments; and strong distribution network puts it in strong position to reach wide audience," she noted, citing Safaricom's M-Pesa mobile money service as a success story other operators try to replicate across Africa.

The international remittance market might provide further opportunities for growth in the area, she suggested. However, she also noted that the number of mobile money services in most African countries is relatively low and there is little evidence, apart from M-Pesa, of mobile money as a revenue generator so far.

A basic driver of growth, Mbongue said, is the availability of low-cost feature-rich mobile phones. Mobile Internet- and multimedia-capable handsets that can now be purchased for under US$50.

As voice calling rates decline due to competition and regulatory pressure, mobile operators are beginning to experience declines in average revenue per user (ARPU), other speakers at the conference said.

"Mobile operators in Nigeria are beginning to focus on VAS to shore up ARPU, in the face of downward pressure on voice tariffs, and increasing penetration into the bottom of the socio-economic pyramid," said Bola Akingbade, CMO at MTN Nigeria. "Mobile VAS has become more important not just for incremental revenue streams but also as a basis for differentiation from competitors."

An increase in the use of social media such as Facebook and Twitter, especially among young people, the soaring popularity of mobile instant messaging and the ability of applications to drive the adoption of Android powered devices are key to future growth, Akingbade said.

"VAS is set to become the new vista of competition in the mobile space," to be aided by the abundance of affordable high-speed international bandwidth along with affordable smart devices and an ecosystem of local developers, Akingbade added.

However, Gary Trehair of MTN said entry-level user handsets still make up a large percentage of the telco's base.

MTN hopes to approach value-added services, Trehair said, "by dramatically growing the services ecosystem -- making it as simple as possible for developers to access the network."

Affordability, according to Informa, is a key challenge to mobile services usage across Africa and successful VAS providers will gear content and user interface features to the low-end of the mobile market.