VAS and Telcos: What We Got Wrong - And Why It Matters Now

If you have ever worked in or around a telecom operator in Africa or other emerging markets, you have probably heard some version of this sentence: "VAS are just extra services." That perception is widespread - and it is precisely why Value-Added Services have been so poorly understood for years.

I spent more than a decade inside these systems. What follows is my honest reading of what VAS actually were, why the model broke down, and what the distribution infrastructure lesson means for growth operators building in emerging markets today.

What VAS Really Were: Platform Economics Before the Term Existed

Before app stores. Before widespread card payments. Before subscriptions became the default. VAS enabled telecom operators in Africa and other emerging markets to do something that no other infrastructure could: monetise non-banked users, expand ARPU beyond connectivity, distribute digital products at massive scale, and turn trust and billing into a platform.

In many emerging markets, VAS were the first large-scale digital economy that millions of people ever interacted with. They were not elegant. They were effective. And they were deeply misread by outside observers who judged the product without understanding the distribution infrastructure underneath it.

What Broke the Distribution Infrastructure Model

The model worked until it did not. Four forces dismantled it in sequence. Margin compression from data bundles eroded the revenue base that made three-way splits viable. The rise of app stores as the default distribution channel bypassed the operator billing layer entirely. Regulatory pressure on auto-renewals - driven by legitimate consumer protection concerns - removed the frictionless renewal mechanism that made VAS economics work. And WhatsApp and YouTube replaced carrier portals as the default content discovery layer, making operator-curated content feel dated almost overnight.

None of these forces were unpredictable in hindsight. What made them damaging was that most operators treated them as content problems rather than infrastructure problems. They asked "what content should we offer?" when the real question was "how do we remain indispensable pipes for digital services in markets where traditional payment rails are weak?"

This is the same infrastructure sovereignty question I explored in the World Bank tenders analysis - and the same depth-over-breadth logic that defines Airtel's current restructuring. The pattern repeats: operators who mistake their content for their moat eventually discover that the moat was always the distribution layer.

The Platform Economics Lesson for 2026

VAS is not about premium content. It never was. It was about distribution infrastructure - the ability to reach a non-banked, mobile-first user at the moment of intent, with a frictionless billing mechanism, in a market where the alternative was nothing.

That underlying need has not disappeared in Africa's emerging markets. The payment rails are stronger, the smartphone penetration is deeper, and the regulatory environment is more defined. But the fundamental challenge - reaching users who do not behave like Western digital consumers, with a product that generates recurring revenue without a credit card - is the same question every growth operator and fintech founder is still trying to answer in 2026.

The question is not "what content should we offer?" It is "how do we become indispensable pipes for digital services in markets where traditional payment rails are still insufficient?" That is the question that matters. VAS answered it imperfectly for a decade. The operators who figure out what comes next will define the following one. MTN's answer - absorb the infrastructure layer entirely rather than rent it - is one version of what indispensable pipes looks like at scale in 2026. I broke down how MTN's IHS Towers acquisition is the infrastructure sovereignty play that every operator who lost the VAS margin war should have seen coming.

The answer emerging in 2026 from the payments side is stablecoin infrastructure - not as a product, but as rails. Africa's 9.3% stablecoin adoption rate is what happens when payment rails are genuinely insufficient and operators need a workaround that scales. I explored how Africa's stablecoin adoption is building the payment layer that VAS operators always needed but could never build themselves.