Accelerating 3G adoption in Vietnam

1

Copyright © 2010 The Nielsen Company. Confidential and proprietary.

Accelerating 3G adoption in Vietnam

November 2010

2


Content

Evaluating 1 year of 3G in Vietnam

Accelerating 3G Adoption in Vietnam

• Expand 3G device availability and affordability

• Mobile internet, video and applications

• Affordable and inventive data pricing

• Marketing a 3G Lifestyle

3


Evaluating 1 year of 3G in Vietnam

4

Copyright © 2010 The Nielsen Company. Confidential and proprietary.Mobile Insights 2010Mobile Insights 2010Mobile Insights 2010Mobile Insights 2010

Yes48%No

52%

93

92

88

MobiFone

Viettel

Vinaphone

3G awareness

Base: Current users (n=3,000)

6 months after launch, half of mobile users were aware of 3G . And, only 3% of mobile users subscribed to 3G service.

Source:

Q73. Are you aware of 3G service for mobile phone?Q75. Which mobile service provider has provided 3G service?

Base: Those who are aware of 3G (n=1,591)

3G Usage -Total

Perceived 3G providers

5

Copyright © 2010 The Nielsen Company. Confidential and proprietary.Mobile Insights 2010Mobile Insights 2010Mobile Insights 2010Mobile Insights 2010

75

74

63

43

27

28

15

12

10

7

73

72

57

46

35

28

17

19

16

12

MobiFone users(n=466)

MobiFone users(n=466)

Vinaphone users(n=271)

Vinaphone users(n=271)

Viettel users(n=822)

Viettel users(n=822)

Q74. Please let me know what service do you know of 3G?

Perceived Types of 3G services

77

76

68

35

24

20

13

15

16

8

Mobile TV

Video call

Mobile internet

Web surfing

Online music

Game online for mobile phone

Pushmail

Applications for mobile phones

Picture and video clip share via website/sms/email

Mobile broadband

Base: Khách hàng có nhận biết về 3G

Mobile TV, video call, mobile internet and web surfing were the most well-

known 3G services among mobile phone users.

6


3G penetration

99%

114%

84%

126%

72%

22%14% 11%

USA

Mal

aysia

Indo

nesia

Viet

nam

Mobile penetration

3G Penetration

Source: Q3’2010 Wireless Intelligence

One year after launch, one in ten Vietnam subscriptions are 3G. This

achievement is quite typical compared to other markets.

Launched 2006

Launched 2009Launched 2005

Launched 2002

7


Mobile applications used in the last 30 days

27%

16%

11%

8%

7%

37%

19%

16%

14%

12%

9%

25%

18%

15%

14%

10%

8%

6%

3%

5%

5%

4%

4%

3%

2%

2%

2%

1%

1%

1%

0%

0%

0%

0%

0%

0%

0%

0%

Mobile internet

Ringtone downloads

Wallpaper/Screensaver downloads

Streaming audio

Full-track music downloads

Picture messaging/MMS

Text alerts

Instant messaging

Content uploads

Game downloads

Mobile video

Email

Software downloads

Picture downloads

Location-based services

Video messaging

Mobile commerce

Online games

VoIP

USA

Vietnam

All Subscribers (n=70128, 3000)

Current main data usage is on mobile Internet, simple downloads and music

8


27%

5%

36%

11%

USA

Viet

nam

Average

High spender(US$=$61+,Vietnam=$10+)

17%

2%

10%

1%

30%

9%

34%

6%USA

Viet

nam

15-24 years

25-34 years

35-44 years

45-54 years

28%

6%

25%

4%

USA

Viet

nam

Male Female

Profile of Mobile Internet users

14%

28%

5%

19%

USA

Viet

nam

Postpaid users Prepaid users

Mobile Internet users in Vietnam, as with other data services, skew strongly to the under 35s, postpaid and high ARPU. Still a very “early adopter” profile.

9


Expand 3G device availability and affordability

10


Smartphones now make up 1 in 4 mobile phones in the US, growing from 18% to 25% in 1 year.

Source: Nielsen Mobile Insights, Q2 ‘09 – Q2‘10

USA Data

11


95.994.895.895.795.093.895.494.794.694.495.194.793.993.291.690.390.589.687.785.983.080.080.181.176.7

3.5 4.2 3.2 3.3 4.0 4.6 3.5 3.7 3.6 3.8 2.9 2.3 2.8 2.7 3.4 3.1 2.6 3.9 4.3 5.05.9 7.2 7.7 6.6 10.1

0.6 1.0 1.0 0.9 1.0 1.5 1.1 1.6 1.8 1.8 2.1 3.0 3.3 4.0 4.9 6.6 6.9 6.5 8.0 9.1 11.112.912.212.313.2

APR'08

MAY'08

JUN'08

JUL'08

AUG'08

SEP'08

OCT'08

NOV'08

DEC'08

JAN'09

FEB'09

MAR'09

APR'09

MAY'09

JUN'09

JUL'09

AUG'09

SEP'09

OCT'09

NOV'09

DEC'09

JAN'10

FEB'10

MAR'10

APR'10

Feature Phone Smartphone T2

159 152 141106

145 143124 110 112 113 117 115 126 129 134 122 122 125 128 125 126 125 117 125

143

312

255

211

163197 191

214 202 190157 153

212

325342

304

155179

250268

251276 276

233 243

300

339 332

226

155

206186 198 197 211 222 220

235254

238 229207 214 202 205 209 201

184168 179 192

Volume Market Share – New Acquirers

Average Price – México (USD)

Media phones are also a growing phenomena (e.g. growing faster than smartphones in Mexico)

Mexico Data

12


Marketers are realizing that devices’ form and features drive data adoption and

consumption, more than consumer factors

13


Data Applications Used in the Past 30 DaysAcquired Device in the Past 6 Months (n=12,650)

Questions used: Q407 Source: Nielsen Mobile Insights, US,Q2 2010

88%80%

80%

69%

58%

54%

42%

40%

40%

39%

39%

37%

36%

31%

30%

30%

21%

20%

20%

14%

6%

3%

69%

17%

22%

11%

40%

8%

10%

18%

16%

14%

7%

4%

11%

19%

12%

5%

5%

5%

9%

3%

1%

24%

Text messaging/SMS

Email

Mobile internet

Application (App) downloads

Picture messaging/MMS

Location-based Services

Content uploads

Pre-installed games

Text alerts

Picture downloads

Game downloads

Streaming audio

Instant messaging

Ringtone downloads

Wallpaper/Screensaver downloads

Mobile video

Mobile commerce

Full-track music downloads

Video messaging

Online games

VoIP

No mobile activities

Smartphone

Feature phone

Data applications usage amongst Smartphone users far outstrip feature phones. 80% use the mobile Internet and e-mail.

USA Data

14


Some Smartphone strategies across SEA

• Singapore

– Singtel and Starhub have reported sharp increases in data traffic in 2009 and 2010.

– In 1Q10, all of SingTel's promotions were for smartphones.

– 80% of the models that StarHub and M1 stocks for their online customers are Smartphones. Most (inc. iPhone) are free with data plans.

• Indonesia

– Telkomsel reported 3x more data in 2009 than 2008. XL Axiata reported 2x growth.

– Blackberrys have gained a huge following, especially amongst youths and students. Driven by social networking, Blackberry Messenger and affordable data rates (starting from $11 / month).

– Network operators are also considering 3G push with generic Chinese brands (20%+ market share), especially as Android makes $200 Smartphones possible.

15


A focus on Smartphone and media phones make sense even in pre-paid heavy markets

62

87

34

56

41

58

84

30

5562

UK Italy France Germany Spain

Prepaid % - Q1 2008 Prepaid % - Q1 2010

Share of prepaid in EFIGS (2008 – 2010)

Europe Data

16


23%

17%

10% 9%5%

84%

62%

55%58%

30%

Italy Spain Germany UK France

Pre-paid penetrationout of all Smartphoneusers

Pre-paid penetrationout of all mobile users

INDEX: 0.27 0.27 0.18 0.16 0.17

Prepaid Amongst Smartphone Users

Base of Smartphone users: Italy (n=1,536, Spain (n=2,530), Germany (n=713), UK (n=1,608), France (n=1,865)

Source: Wireless Intelligence & Nielsen Mobile Insights Q1 2010

There is a higher propensity for pre-paid users to use Smartphones in Italy and Spain

Europe Data

17


In line with this, Spain and Italy’s pre-paid users exhibit the most attractive consumption patterns.

Source: Nielsen Mobile Insights, Q1 2010

Last 30 Day Mobile Internet usage, Q1 2010

0.39

0.15

0.36

0.53

0.65

Index Pre-paid to Post-paid

18%7%Germany

26%4%France

36%13%UK

17%9%Spain

20%13%Italy

Post-paid users

Prepaid users

% who used mobile Internet in last 30 Days

2.82.8Telefonica Spain

2.83.6Vodafone Italy

7.87.8T-Mobile Germany

3.33.1Orange France

5.54.8Vodafone UK

Postpaid ARPU / Prepaid ARPU: 2010

Postpaid ARPU / Prepaid ARPU: 2008

Operator

Pre & post-paid ARPU

Europe Data

18


Smartphones and Media Phones must be a key part of 3G strategy.

Branded Smartphones are a safe option, but Android makes generic / operator-branded phones

worth investigating.

19


Mobile Internet, Video and Apps

20


The mobile applications and internet categories grow while the carrier-billed game and audio businesses collapse

262218

2935

39 41 44 47

$430

$169

$230

$281

$335

$383

$460$501 $508

0

12

24

36

48

60

72

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Number of Application Downloaders (M)

$0

$90

$180

$270

$360

$450

$540

Total Revenue (M)

Number of application downloaders Total application revenue

Mobile Application MarketQ1 2008–Q1 2010

3133 34 32 30 30 28 29 27

$209

$268 $270

$237$226

$214

$172 $165$143

0

9

18

27

36

45

54

63

72

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Number of Audio Downloaders (M)

$0

$60

$120

$180

$240

$300

$360

Total Revenue (M)

Number of audio buyers Total audio revenue

Mobile Audio MarketQ1 2008–Q1 2010

1315

1719

1413 13

1413

$103

$152

$180 $185

$164 $158 $156

$131$119

10

14

18

22

26

30

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Number of Game Downloaders (M)

$0

$50

$100

$150

$200

$250

Total Revenue (M)

Number of game downloaders Total game revenue

Mobile Game MarketQ1 2008–Q1 2010

13713613713012410810295

116

$4,516$4,505

$3,754

$2,930

$2,415$2,262

$1,806$1,692

$3,283

0

50

100

150

200

250

300

Q1

2008

Q2

2008

Q3

2008

Q4

2008

Q1

2009

Q2

2009

Q3

2009

Q4

2009

Q1

2010

Number of Mobile Internet Unique Subscribers (M)

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

Total Revenue (M)

Number of unique mobile internet subscribers Total mobile internet revenue

Mobile Internet Market OverviewQ1 2008–Q1 2010

Note: Subscriber: an individual who paid for the service in the given period.

Source: Mobile Media Measurement bill panel and survey analysis. Extrapolation from CTIA and Nielsen Mobile universe estimates

Note: Includes prepaid, postpaid, and all carriers. Does not include off-bill.

USA Data

21


US Mobile Video Viewers All Mobile Subscribers (Q1 2010 284,529,844; Q1 2010 Mobile Insights n=63,982)

Source: Q3 2008-Q1 2010 Mobile Insights & Nielsen Mobile analysis.

(In Millions)

10.3

20.2

17.6

15.315.7

13.4

11.2

4.9%

5.8%

6.5%

8.8%

7.3%

6.6%

4.6%

0

5

10

15

20

Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

Mobile Video Viewers

Mobile Video ViewerPenetration (of allMobile Subscribers)

Mobile Video Penetration is slowly be steadily increasing

USA Data

22


How Viewers Accessed Mobile VideoMobile Video Viewers (n=4,819)

Mobile Video viewership by application is exploding while the subscription model languishes

36%

68%

48%

59%

40%

47%

39%

65%

Subscription Mobile internet Download clips Applications

Q1 2010

Q1 2009

“I paid a

subscription fee

to access Mobile

TV or video

clips”

“I accessed and viewed

Mobile TV or video clips

directly from the internet on

my cell phone”*

“I downloaded and

stored video clips from

a computer or from

other sources onto my

cell phone”*

“I viewed video clips

using an application

(for example:

MyWaves, VSnax)”*

Source: Nielsen Mobile Video Survey, US, Q1 2010 & Q1 2009

Question used: M3811*Response specifies you watched without paying a Mobile TV or Video subscription fee.

USA Data

23


•www.sina.com.cn

•www.baidu.com

•www.google.cn

•www.ko.cn

•news.sohu.com

•www.xiaonei.com

•www.3g.cn

•www.paojiao.com

•www.188bet.com

•www.feiku.com

•www.google.de

•www.studivz.net

•www.wer-kennt-wen.de

•www.jappy.de

•www.schuelervz.net

•m.web.de

•mobil.spiegel.de

•m.gmx.de

•www.lokalisten.de

•wap.sport1.de

Top mobile Internet sites, China Top mobile Internet sites, Germany

• Local content is key for driving mobile Internet traffic

Popular websites cross over from fixed to mobile

24


17%

13%

20%

60%

5%

1%

19%

10%

3%

1%

2%

2%

24%

46%

51%

1%

1%

8%

13%

12%

14%

1%

3%

2%

1%1%

4%

18% 47%

AT&T

Sprint

T-Mobile

Verizon

Blackberry App World Store Apple App Store Palm Application Store

Android Market Store Windows Marketplace Store AT&Ts Application Store

Sprints Application Store T-Mobiles Application Store Verizons Application Store

My cell phone provider’s Application Store Handango website Other

Cydia Apps Market Verizon V Cast Apps

App Store Most Often Used by Device Type and Operator

Base: AT&T (n=1,709), Sprint (n=529), T-Mobile (n=422), Verizon (n=1,238)

Source: August 2010 Nielsen App

Playbook

Even in well regulated USA, operator stores have a big role to play in marketing apps. This trust angle will be even more critical in Vietnam.


Playbook

Questions used: CQ2C1: Which of the following App Stores do you use most often?

USA Data

Verizon App Store

T-Mobile App Store

Sprint App Store

Apple App StoreAT&T App Store

25


In summary: Create an open and dynamic marketplace for applications

• Some learnings on App Stores / portals

– pricing

– allowing free apps into the store and distributing them for free.

– allowing developers to charge small amounts for an app (tasters)

– games

– almost every application in the list of top paid and free apps on the Apple App Store is a game.

– showcase applications development as “a chance to make good money”

– in the early days this could mean investing money

– create buzz and community

– open business model, smooth approval process

– provide best practice shopping experience

– allow bookmarking

– recommendation / rating of apps

– mark apps already bought by a subscriber

26


Affordable and Inventive Data Pricing

27


Allow “data snacking”, especially for pre-paid users, and free trials

RM5 (US$1.3)/ day

RM15 (US$4.5)/ week

28


T-Mobile UK (Pre-paid)

• T-Mobile is UK’s most successful network for pre-paid data usage.

• They offer new subscribers 30 days of free internet

• They also offer cheap Mobile Internet boosters

£20.006 month Internet on your phone

£5.001 month Internet on your phone

£2.505 day Internet on your phone

CostBooster

Allow “data snacking”, especially for pre-paid users, and free trials…cont’d

29


Avoid AYCE pricing. Small amount of users are consuming the bulk of data traffic for US carriers; between 2009 and 2010 their consumption doubled.

Source: Nielsen Customer Value Metrics Q1‘09 – Q1‘10

As traffic picks up look into Dynamic Data Pricing

Variable discounts depending on location and traffic. Alerts on available discounts sent to users’ phones in the form of a “ticker”

31


Have a good selection of free applications to promote adoption and create an apps culture.

*Caution: Small base size

Mix of Free versus Paid Downloads by Operating SystemPast 30 Day App Downloaders

Questions used: CQ3 How many downloads, free or paid for, have you done in the past 30 days?

Wave 2 Base: Feature Phone (n=1,965), Smartphone (n=2,300), BlackBerry (n=623), Microsoft Windows Mobile (n=292), Apple iPhone OS (n=959), Android OS (n=338)


Playbook

7% 8%13%

8%3%

62%

69%74%

50%67% 80%

21% 23%17%

37%

25%17%

17%

Feature Phone Smartphone BlackBerry MS Windows Mobile Apple iPhone OS Android OS

Downloaded a Paid App Only in the Past 30 Days Downloaded a Free App Only in the Past 30 Days

Downloaded Both a Paid and a Free App in the Past 30 Days

USA Data

32


Marketing a 3G Lifestyle

33


Targeting youths - O2 UK (& Germany)

• 149 performances by 60 acts including some of the world’s top music artists have played The O2 Arena.

• Concerts in 2010 – More than 30 concertsalready planned for next year including Bon Jovi, Lady Gaga, Michael Buble, Alicia Keys, Rod Stewart etc.– O2 customers get priority for concert tickets

• O2 has also supported events such as the 'NME Rock 'n' Roll Riot Tour', The O2 Wireless Festivals, Party in the Parks and opera events across the UK and Germany.

• O2 Bubble – British Music Experience -Interactive audio visual spaces that explore great British music moments throughout history – Record yourself singing, mixing, playing guitar,

keyboard or drums – Education programs for youths aged 14 - 19

34


Target youths – Celcom Xpax

• Celcom Xpax, a 3G prepaid service was introduced in 2005 to spur the usage of 3G, especially due to the fact that 80% of Celcom's business comes from prepaid segment

• Contests, free concerts tickets, VIP passes for events, parties, international music fests

• Monthly bonus, bonus during birthdays

• Download the best and latest games, music and graphics exclusively from Channel X! With more than 10,000 FREE downloads

• Blackberry prepaid: Unlimited BBM at only 50 cents a day

• Enjoy FREE Windows Live Mobile

• Unlimited Facebook SMS for RM 1 a week

35


Example of Consumer Segmentation Based on Mobile Data Usage (USA)

Young Utilitarians

Young adults belonging to middle income households, High messaging and moderate browsing usage.

Middle Class Rationalists

Relatively older in age, belonging to middle income households, primarily voice and text users

Retired Voice Callers

Retired from work, belonging to middle to lower income households, primarily voice users

Engaged Teenagers

Teenagers from middle class households, heavily into messaging and moderate browsing and downloading usage

Young Smartphone Addicts

Young working adults from middle income households, heavy browsing and downloading activities

Senior Basic Followers

Older in age, not regularly employed, belonging to lower income households, primarily voice and messaging users

Ambitious Transients

Young adults from lower income HHs, in between education and work. Heavy messaging & moderate browsing.

Affluent Smartphone Adopters

Older and working, from High income households. High browsing and moderate downloading activities

28.0%

19.1%

15.8%

14.7%

6.9%

6.3%

6.1%

3.2%

-

-

7.1%

20.1%

100%

-

21.9%

100%

36


Example of Consumer Segmentation Based on Mobile Data Usage (USA) … cont’d

Page 36

TALKINGTALKINGTALKINGTALKINGTALKINGTALKINGTALKINGTALKING

MESSAGINGMESSAGING

BROWSINGBROWSING

DOWNLOADINGDOWNLOADING

Young Smartphone

Addicts

Affluent Smartphone

Adopters

Engaged Teenagers

Ambitious Transients

Young Utilitarians

Middle Class Rationalists

Senior Basic Followers

Retired Voice Callers

37


By understanding each segment’s…

Current Mobile

Data Usage

LifestageandLife

Priorities

Willingness to Pay and Trade-Offs

Mobile Data and Device

Aspirations

… creating the perfect 3G package will be easy.

Current Digital Lifestyle

Thank You

Date post:	28-Jan-2015
Category:	Technology
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Accelerating 3G adoption in Vietnam

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