Accelerating 3G Adoption in Vietnam

Accelerating 3G adoption in Vietnam

November 2010

Evaluating 1 year of 3G in Vietnam

• Expand 3G device availability and affordability • Mobile internet, video and applications • Affordable and inventive data pricing • Marketing a 3G Lifestyle

3G Usage - 3G awareness Perceived 3G providers Total Base: Current users (n=3,000) Base: Those who are aware of 3G (n=1,591)

MobiFone 93

Yes No 48% Viettel 92 52%

Vinaphone 88

Source: 4 Q73 . Are you aware of 3G service for mobile phone? Q75. Which mobile service provider has provided 3G service?

Mobile Insights 2010 Copyright © 2010 The Nielsen Company. Confidential and proprietary. Mobile TV, video call, mobile internet and web surfing were the most well- known 3G services among mobile phone users . Perceived Types of 3G services

MobiFoneMobiFone users users VinaphoneVinaphone users users ViettelViettel users users (n=466)(n=466) (n=271)(n=271) (n=822)(n=822) Mobile TV 73 77 75

Video call 72 76 74

Mobile internet 57 68 63

Web surfing 46 35 43

Online music 35 24 27

Game online for mobile phone 28 20 28

Pushmail 17 13 15

Applications for mobile phones 19 15 12

Picture and video clip share via website/sms/email 16 16 10

Mobile broadband 12 8 7 5

Base: Khách hàng có nhận biết về 3G Q74. Please let me know what service do you know of 3G?

Mobile Insights 2010 Copyright © 2010 The Nielsen Company. Confidential and proprietary. One year after launch, one in ten Vietnam subscriptions are 3G. This achievement is quite typical compared to other markets.

3G penetration

Launched 2009 Launched 2005 126% Launched 2002 114% 99% Launched 2006 84% 72%

22% 14% 11%

m ysia sia a USA la ne o etn Ma d Vi In

Mobile penetration 3G Penetration

Source: Q3’2010 Wireless Intelligence 6

Copyright © 2010 The Nielsen Company. Confidential and proprietary. Current main data usage is on mobile Internet, simple downloads and music Mobile applications used in the last 30 days All Subscribers (n=70128, 3000)

Mobile internet 5% 27% 16% Ringtone downloads 5% 11% Wallpaper/Screensaver downloads 4% 8% Streaming audio 4% 7% Full-track music downloads 3% 37% Picture messaging/MMS 2% 19% Text alerts 2% 16% Instant messaging 2% 14% Content uploads 1% USA Game downloads 12% 1% Vietnam 9% Mobile video 1% 25% Email 0% 18% Software downloads 0% 15% Picture downloads 0% 14% Location-based services 0% 10% Video messaging 0% 8% Mobile commerce 0% 6% Online games 0% 7 3% VoIP 0%

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

Profile of Mobile Internet users

28% 25% 34% 30%

15-24 years 25-34 years 17% 35-44 years 6% 4% 45-54 years 10% 9% 6% 2% 1% SA am 28% U tn Vie SA Male Female 36% U 19% Vietnam

14% 27% Average

5% 11% High spender (US$=$61+, 5% Vietnam=$10+)

SA U Vietnam Postpaid users Prepaid users 8 USA Vietnam

USA Data

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

Average Price – México (USD) Mexico Data 342 325 312 304 300 268 276 276 339 255 250 251 332 233 243 211 214 212 197 191 202 190 254 179 163 157 153 235 238 155 226 222 220 229 214 206 198 197 211 207 202 205 209 201 186 184 179 192 159 155 168 152 141 145 143 143 124 126 129 134 122 122 125 128 125 126 125 125 106 110 112 113 117 115 117

Volume Market Share – New Acquirers 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 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 8.0 9.1 11.1 12.9 12.212.3 13.2 2.7 3.4 3.1 2.6 3.9 4.3 5.0 5.9 7.2 7.7 6.6 10.1

95.9 94.8 95.895.7 95.0 95.4 94.7 94.694.4 95.194.7 93.8 93.9 93.2 91.6 90.3 90.5 89.6 87.7 85.9 83.0 80.0 80.1 81.1 76.7

APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR '08 '08 '08 '08 '08 '08 '08 '08 '08 '09 '09 '09 '09 '09 '09 '09 '09 '09 '09 '09 '09 '10 '10 '10 '10 Feature Phone Smartphone T2 11

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

Text messaging/SMS 69% 88% 80% Email 17% 80% Mobile internet 22% 69% Application (App) downloads 11% 58% Picture messaging/MMS 40% 54% Location-based Services 8% 42% Content uploads 10% 40% Pre-installed games 18% 40% Text alerts 16% 39% Picture downloads 14% 39% Game downloads 7% 37% Streaming audio 4% 36% Instant messaging 11% 31% Ringtone downloads 19% 30% Wallpaper/Screensaver downloads 12% 30% Mobile video 5% 21% Mobile commerce 5% 20% Full-track music downloads 5% Smartphone 20% Video messaging 9% Feature phone 14% Online games 3% 6% VoIP 1% 3% No mobile activities 24% 13

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

• 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.

Copyright © 2010 The Nielsen Company. Confidential and proprietary. A focus on Smartphone and media phones make sense even in prepaid heavy markets Europe Data Share of prepaid in EFIGS (2008 – 2010)

87 84

62 62 58 56 55 41 34 30

UK Italy France Germany Spain

Prepaid % - Q1 2008 Prepaid % - Q1 2010

Prepaid Amongst Smartphone Users Europe Data

INDEX: 0.27 0.27 0.18 0.16 0.17

84%

62% 58% 55% Pre-paid penetration out of all Smartphone users

Pre-paid penetration 30% out of all mobile users 23% 17% 10% 9% 5%

Italy Spain Germany UK France

Source: Wireless Intelligence & Nielsen Mobile Insights Q1 2010 Base of Smartphone users: Italy (n=1,536, Spain (n=2,530), Germany (n=713), UK (n=1,608), France (n=1,865) 16

Copyright © 2010 The Nielsen Company. Confidential and proprietary. In line with this, Spain and Italy’s pre-paid users exhibit the most attractive consumption patterns. Europe Data Last 30 Day Mobile Internet usage, Q1 2010 Pre & post-paid ARPU

% who used Prepaid Post-paid Index Pre- Operator Postpaid ARPU Postpaid ARPU mobile Internet users users paid to / Prepaid / Prepaid in last 30 Days Post-paid ARPU: 2008 ARPU: 2010 Italy 13% 20% 0.65 Vodafone Italy 3.6 2.8

Spain 9% 17% 0.53 Telefonica 2.8 2.8 Spain UK 13% 36% 0.36 Vodafone UK 4.8 5.5

France 4% 26% 0.15 Orange France 3.1 3.3

Germany 7% 18% 0.39 T-Mobile 7.8 7.8 Germany

17 Source: Nielsen Mobile Insights, Q1 2010

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

Copyright © 2010 The Nielsen Company. Confidential and proprietary. The mobile applications and internet categories grow while the carrier- billed game and audio businesses collapse USA Data Mobile Audio Market Mobile Application Market Q1 2008–Q1 2010 Q1 2008–Q1 2010

72 $360 72 $501 $508 $540 $460 63 $430 $268 $270 $300 60 $450 $383 54 $237 $226 $335 $214 $209 $240 45 48 $360 $281 $172 $165 36 $143 $180 36 $230 $270 27 $169 $120 TotalRevenue(M) 24 47 $180 41 44 Total(M) Revenue 18 33 34 39 32 31 30 30 28 29 35 27 $60 26 29 9 12 22 $90 Number ofAudio Downloaders(M) 18

0 $0 Numberof Application Downloaders (M) 0 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2008 2008 2008 2008 2009 2009 2009 2009 2010 2008 2008 2008 2008 2009 2009 2009 2009 2010

Number of audio buyers Total audio revenue Number of application downloaders Total application revenue

Mobile Game Market Mobile Internet Market Overview Q1 2008–Q1 2010 Q1 2008–Q1 2010

30 $250 300 $5,000 $4,505 $4,516 $4,500 $185 250 26 $180 $200 $3,754 $4,000 $164 $158 $3,283 $156 $152 $3,500 200 $2,930 22 $131 $150 $3,000 $119 $2,415 $103 150 $2,262 $2,500 $1,806 18 $100 $1,692 $2,000 TotalRevenue (M) 100 TotalRevenue(M) $1,500 19 14 $50 130 137 136 137 17 116 124 $1,000 50 95 102 108 Numberof Game Downloaders (M) 15 14 14 13 13 13 13 $500 10 $0 Numberof Mobile Internet (M) Unique Subscribers 0 $0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2008 2008 2008 2008 2009 2009 2009 2009 2010 2008 2008 2008 2008 2009 2009 2009 2009 2010 20

Number of game downloaders Total game revenue Number of unique mobile internet subscribers Total mobile internet revenue

Note: Subscriber: an individual who Note: Includes prepaid, postpaid, and Source: Mobile Media Measurement bill paid for the service in the given period. all carriers. Does not include off-bill. panel and survey analysis. Extrapolation from CTIA and Nielsen Mobile universe estimates Copyright © 2010 The Nielsen Company. Confidential and proprietary. Mobile Video Penetration is slowly be steadily increasing

USA Data US Mobile Video Viewers All Mobile Subscribers (Q1 2010 284,529,844 ; Q1 2010 Mobile Insights n=63,982) (In Millions) 20 10.0% 8.8%

8.0% 7.3% 15 6.5% 6.6% 5.8% 6.0% 4.9% 10 4.6% 20.2 Mobile Video Viewers 17.6 15.7 4.0% 15.3 13.4 11.2 5 10.3 Mobile Video Viewer 2.0% Penetration (of all Mobile Subscribers)

0 0.0% Q3 2008 Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 21

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

Copyright © 2010 The Nielsen Company. Confidential and proprietary. Mobile Video viewership by application is exploding while the subscription model languishes USA Data How Viewers Accessed Mobile Video Mobile Video Viewers (n=4,819)

68% 65% 59%

48% 47%

40% 39% 36%

Q1 2010 Q1 2009 Subscription Mobile internet Download clips Applications

“I paid a “I accessed and viewed “I downloaded and “I viewed video clips subscription fee Mobile TV or video clips stored video clips from using an application to access Mobile directly from the internet on a computer or from (for example: TV or video my cell phone”* other sources onto my MyWaves, VSnax)”* clips” cell phone”*

*Response specifies you watched Question used: M3811 Source: Nielsen Mobile Video Survey, without paying a Mobile TV or Video US, Q1 2010 & Q1 2009 subscription fee. Copyright © 2010 The Nielsen Company. Confidential and proprietary. Popular websites cross over from fixed to mobile

• Local content is key for driving mobile Internet traffic

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

•www.sina.com.cn •www.google.de •www.baidu.com •www.studivz.net •www.google.cn •www.wer-kennt-wen.de •www.ko.cn •www.jappy.de •news.sohu.com •www.schuelervz.net •www.xiaonei.com •m.web.de •www.3g.cn •mobil.spiegel.de •www.paojiao.com •m.gmx.de •www.188bet.com •www.lokalisten.de •www.feiku.com •wap.sport1.de

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

App Store Most Often Used by Device Type and Operator USA Data

Verizon 20% 10% 2% 51% 14% 1%1% Verizon App Store

T-Mobile 13% 5% 19% 2% 46% 1% 12% 2% T-Mobile App Store

Sprint 17% 1% 18% 1% 47% 1% 13% 3% Sprint App Store

AT&T 4% 60% 3% 24% 8% 1% Apple App Store AT&T App Store

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

Questions used: CQ2C1: Which of the following Source: August 2010 Nielsen App App Stores do you use most often? Playbook

• 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 25

RM15 (US$4.5)/ week

RM5 (US$1.3)/ day

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

Booster Cost

5 day Internet on your phone £2.50

1 month Internet on your £5.00 phone 6 month Internet on your £20.00 phone 28

Copyright © 2010 The Nielsen Company. Confidential and proprietary. 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

Variable discounts depending on location and traffic. Alerts on available discounts sent to users’ phones in the form of a “ticker” Have a good selection of free applications to promote adoption and create an apps culture. USA Data Mix of Free versus Paid Downloads by Operating System Past 30 Day App Downloaders

21% 17% 17% 23% 25% 37%

62% 74% 69% 67% 80% 50%

17% 13% 8% 8% 7% 3% 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 Wave 2 Base: Feature Phone (n=1,965), Smartphone (n=2,300), BlackBerry (n=623), Microsoft Windows Mobile (n=292), 31 Apple iPhone OS (n=959), Android OS (n=338)

*Caution: Small base size Questions used: CQ3 How many Source: August 2010 Nielsen App downloads, free or paid for, have you done in Playbook the past 30 days?

• 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 concerts already 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

• 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

Young Young adults belonging to middle income households, High 28.0% - Utilitarians messaging and moderate browsing usage.

Middle Class Relatively older in age, belonging to middle income 19.1% - Rationalists households, primarily voice and text users

Retired Voice Retired from work, belonging to middle to lower income 15.8% 7.1% Callers households, primarily voice users

Engaged Teenagers from middle class households, heavily into 14.7% 20.1% Teenagers messaging and moderate browsing and downloading usage

Young Smartphone Young working adults from middle income households, 6.9% 100% Addicts heavy browsing and downloading activities

Senior Basic Older in age, not regularly employed, belonging to lower 6.3% - Followers income households, primarily voice and messaging users

Ambitious Young adults from lower income HHs, in between education 6.1% 21.9% Transients and work. Heavy messaging & moderate browsing.

Affluent Smartphone Older and working, from High income households. High 3.2% 100% Adopters browsing and moderate downloading activities 35

TALKING

MESSAGING Retired Voice Callers Senior Basic Followers BROWSING Middle Class Rationalists Ambitious Transients Engaged Teenagers Young Utilitarians DOWNLOADING Affluent Smartphone Adopters Young Smartphone Addicts

Lifestage Mobile Current Current Willingness and Data and Mobile Digital to Pay and Life Device Data Usage Lifestyle Trade-Offs Priorities Aspirations

… creating the perfect 3G package will be easy.