Russian mobile operator MTS Russia has launched a mobile app store in partnership with Opera Software.
App Market will offer subscribers unlimited access to 3,000+ premium games and apps, including popular mobile titles such as Angry Birds Star Wars II, Modern Combat 4, N.O.V.A. 3, Tor 2: Realm of Darkness, Green Farm 3, and GT Racing 2, among others. The app store will be available as a weekly subscription to Android, BlackBerry, and Symbian smartphone and tablet users.
Opera Software also operates the Opera Mobile Store, which offers more than 200,000 apps to 100 million monthly active visitors at the end of 2013.
While the launch of an app store by a mobile operator is not a new move, MTS Russia’s app store is noteworthy in that it provides an all-you-can-eat subscription model, rather than the standard download options provided by leading stores such as Apple, Google and local providers such as Yandex. Operators in Asian, such as Cellcom (Malaysia) and M1 (Singapore) have also used subscription plans for app content but these services are the generally quite rare.
In markets where mobile operators have traditionally offered value-added services, operator branded services have had some success attracting new users and reducing churn. However, in Russia, where local and international over-the-top services remain popular, the appeal of an operator-led app store might be a tougher sell to mobile users already using larger app stores from Apple and Google.
The key to MTS and Opera’s proposition is the use of its unlimited subscription model. However, this business model is incompatible with the wider trend towards freemium mobile content that is monetised via in-app purchase. As publishers move away from offering premium paid download content, the pool of titles from which to populate a subscription service is reduced and so ensuring high quality and current content will be a challenge.
Instead, branded app stores like Yandex and MTS Russia’ App Market compete by offering app stores with enhanced app discovery, local brands and content and increased security features to check against harmful malware. Yandex’s own app store provides comprehensive anti-virus protection for its 50,000+ apps.
Operator-led app stores also have the added benefit of utilizing carrier billing and “toll-free” data to encourage users to spend more on individual purchases, increasing revenues per subscriber. US mobile operator AT&T recently launched its own sponsored data content store, where access to select apps does not count towards users’ monthly data allotment.
Successful operator-led app stores however have been rare. In 2012, Vodafone shut down its AppSelect in Europe due to competing OTT providers already offering similar apps and content. IHS believes mobile operators will continue to face major challenges in offering their own-branded content services. According to IHS research, Apple and Google’s content stores will account for over 70% of smartphone and tablet downloads and more than 85% of revenues by 2017.