Powering Recurring or Subscription-Based VAS Models in Telecom with Aipix

In today’s highly competitive telecom market, operators are constantly looking for ways to expand their service offerings, reduce customer churn, and create new revenue streams. A major opportunity in this shift is the growth of recurring value-added services (VAS) offerings via Recurring VAS Revenue Models that move beyond basic connectivity and generate consistent monthly income.

Leading this evolution is Aipix, a global provider of cloud-based VAS solutions. Aipix offers a specialized portfolio focused on cloud video surveillance (CVS), video analytics, and cloud access control.

The Need for Recurring Revenue in Telecom

Historically, telecom operators have depended on voice, SMS, and data bundles as their primary services. However, as these offerings become increasingly commoditized and Average Revenue Per User (ARPU) plateaus, the industry is shifting toward Monthly Recurring Revenue (MRR) models. This involves services that are subscribed to on a monthly basis, rather than consumed on demand or offered as free inclusions.

Recurring value-added services (VAS) offer a strong business proposition, providing:

• Predictable revenue streams
• High margins with low churn
• Increased service differentiation
• Improved customer retention and lifetime value

Success hinges on delivering services that customers consider essential, particularly those related to security, automation, and convenience – areas where Aipix excels.

Comparing MRR-Based Models vs. Recurring VAS Revenue Models in Telecom: Opportunities, Challenges, and Strategic Fit

As telecom operators grapple with declining ARPU (Average Revenue Per User), market saturation, and the significant costs of infrastructure, adopting recurring revenue models is not just an advantage – it is essential for long-term survival and growth.

In this ongoing transformation, two specific models are frequently discussed: Monthly Recurring Revenue (MRR)-based models and Recurring Value-Added Services (VAS) revenue models. While closely linked, these concepts are distinct, and a clear understanding of their relationship is vital for telecom operators aiming for profitable scaling.

Monthly Recurring Revenue (MRR) in Telecom

MRR is a key metric in subscription-based businesses, representing the predictable, consistent revenue generated from active subscriptions each month. For telecom operators, MRR is a measure of financial health and stability, offering insights into revenue forecasting and the effectiveness of pricing strategies.

In the context of telecom, MRR can encompass revenue from various sources, including basic connectivity subscriptions (voice, data) and recurring charges for specific services. It is a straightforward indicator of a company’s ability to generate steady income from its customer base.

Recurring Value-Added Services (VAS) Revenue Models

While MRR tracks the overall monthly income from recurring sources, Recurring VAS revenue models focus specifically on the source of that revenue. VAS are services that go beyond traditional connectivity, such as cloud video surveillance, video analytics, or cloud access control, which are often provided on a subscription basis.

These models are crucial for telecom operators because they address the challenges of commoditized core services. By offering recurring VAS, operators can:

• Diversify Revenue Streams. Reduce reliance on traditional connectivity revenue, which is often subject to intense competition and declining margins.
• Increase ARPU. Encourage existing customers to spend more by subscribing to high-value services.
• Improve Customer Retention. Services like security and automation become indispensable to customers, increasing loyalty and reducing churn.

Recurring Revenue Models. The Crucial Distinction

The core difference lies in their scope: MRR is a financial metric that calculates total recurring revenue, regardless of the service type. Recurring VAS revenue models describe a business strategy focused on generating that recurring revenue specifically through value-added services.

For telecom operators, leveraging Recurring VAS is the mechanism for achieving sustainable MRR growth, moving beyond basic connectivity to deliver services that customers are willing to pay for on an ongoing basis. This shift is critical as the industry navigates a challenging environment where traditional revenue streams are under pressure.

MRR-Based Models vs. Recurring VAS Revenue Models. Definitions: What’s the Difference?

Industry Statistics & Market Dynamics

1. Telecom ARPU Decline

• Global average mobile ARPU has declined by 15-25% over the past 5 years, driven by OTT services and price competition.
• Traditional MRR models are under pressure, especially in mature markets.

2. Growth in VAS

• The global telecom VAS market is projected to grow from $650 billion in 2023 to $950+ billion by 2028 (CAGR ~7.8%).
• Recurring VAS services contribute up to 30% of total revenue in forward-looking telcos (source: GSMA, IDC).

3. Cloud Video Surveillance Market

1. The market of Cloud Video Surveillance alone is expected to reach $60 billion+ by 2027.
2. Increasing adoption by SMEs, ciudades inteligentes, and residential users creates opportunities for telcos to become security service providers.

4. Customer Loyalty and VAS

• Telcos offering bundled VAS (like home security or cloud storage) see churn reductions of 20–35%, according to McKinsey.
• VAS subscribers are 2.4x more likely to upgrade broadband tiers or renew contracts.

Recurring Revenue Models. Strategic Benefits for Telcos

Why Recurring VAS is the Natural Extension of MRR

While Monthly Recurring Revenue (MRR) dictates the billing structure for telecom operators (monthly), Recurring Value-Added Services (VAS) define the content of that billing. This distinction is crucial, as it allows telecommunication companies to:

• Enter New Verticals. Expand into areas such as security, IoT, smart home technology, and retail analytics.
• Offer Tiered, Premium Services. Provide a range of options that cater to diverse customer needs and increase Average Revenue Per User (ARPU).
• Reduce Dependency on Network Commoditization. Shift focus away from basic connectivity, which often faces intense price competition.
• Differentiate in Crowded Markets. Offer unique solutions that distinguish them from competitors.

For example, using Aipix’s VAS platform, a telecom operator can rapidly introduce services such as:

• Home video surveillance at $4.99 per month.
• Smart office analytics at $9.99 per month.
• Multi-location cloud access control at $14.99 per month.

These services are deployed with minimal capital expenditure (capex), leveraging scalable cloud infrastructure and ready-made branding for quick market entry.

Aipix’s Cloud-Based VAS Platform: A Game-Changer via Recurring VAS Revenue Models

The Aipix VAS Software solution provides telecom operators with the tools to efficiently launch and scale value-added services utilizing cloud video and AI technologies, fundamentally changing how these operators interact with residential and business clients.

1. Cloud Video Surveillance (VSaaS)

Aipix delivers a white-label, carrier-grade VSaaS platform, allowing subscribers to monitor their homes, offices, and retail locations from any device. This goes beyond simple camera streaming; it integrates critical features such as motion detection, intelligent alerts, secure cloud storage, and intuitive mobile access.

2. AI-Powered Video Analytics

Through integrated video analytics, Aipix converts raw video footage into valuable, actionable insights. Telecom operators can offer sophisticated functionalities, including:

• People counting
• Object detection
• Line crossing alerts
• Face and license plate recognition

These features are highly useful for small and medium enterprises (SMEs), large enterprise clients, and smart city initiatives, making them easily monetizable across various customer segments.

3. Cloud Access Control

Aipix further enhances its offerings with a cloud-based access control system, facilitating the secure, remote management of building and room access. This solution adds significant value and customer retention, serving diverse environments from residential communities to large enterprise facilities.

Designed for Telcos: Fast Launch, Flexible Monetization

Aipix is distinguished by its telco-first architecture, designed specifically to meet the unique requirements of ISP’s and telecommunication providers. The platform offers several key advantages:

• White-label Ready. Operators can fully brand the services as their own.
• Cloud-Native and Scalable. The architecture is built on the cloud, ensuring high scalability and reliability.
• Easy Integration. It integrates seamlessly with existing telecom billing systems.
• Multi-tenant Support. The platform supports multi-tenant models, facilitating B2B2C and B2B2B operations.

Aipix empowers operators to implement tiered subscription plans, bundle services with broadband or IoT offerings, and deploy solutions tailored to specific regions. This is achieved with minimal upfront investment and a rapid time to market.

The Business Impact: More Than Just Technology

For telcos, this isn’t just about offering a new feature — it’s a strategic move to:

• Grow monthly recurring revenue
• Build long-term customer loyalty
• Expand into non-traditional telecom markets like security, home automation, and smart infrastructure
• Position the brand as an innovation leader

Conclusion: The Future of Telco VAS is Smart, Secure, and Recurring

While Monthly Recurring Revenue (MRR) remains a fundamental element of the telecom business model, it is no longer sufficient for sustainable growth. To achieve profitability, telecom companies must:

• Maintain MRR as the Billing Framework. Continue utilizing MRR for consistent revenue tracking.
• Transition to Recurring VAS-driven Models. Expand into value-added services for enhanced offerings and revenue streams.
• Leverage Cloud-Native, White-Label Platforms (like Aipix). Deploy services rapidly, cost-effectively, and at scale.

As the telecom industry evolves, static, one-time offerings are being replaced by dynamic, cloud-based services that deliver long-term value and predictable revenue. Aipix is positioned at the forefront of this shift, assisting telecom operators in moving beyond basic connectivity to become comprehensive, platform-based service providers.

With a well-established solution stack, a significant global presence, and a strategic focus on recurring revenue, Aipix is redefining the possibilities of value-added services within the telecommunications sector.

Learn more about how Aipix can power your next VAS launch for rapid achieving your business goals!