Accelerating 3G adoption in Vietnam November 2010 1 Copyright © 2010 The Nielsen Company. Confidential and proprietary. 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 2 Copyright © 2010 The Nielsen Company. Confidential and proprietary. Evaluating 1 year of 3G in Vietnam 3 Copyright © 2010 The Nielsen Company. Confidential and proprietary. 6 months after launch, half of mobile users were aware of 3G . And, only 3% of mobile users subscribed to 3G service. 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 Copyright © 2010 The Nielsen Company. Confidential and proprietary. Expand 3G device availability and affordability 9 Copyright © 2010 The Nielsen Company. Confidential and proprietary. Smartphones now make up 1 in 4 mobile phones in the US, growing from 18% to 25% in 1 year. USA Data 10 Source: Nielsen Mobile Insights, Q2 ‘09 – Q2‘10 Copyright © 2010 The Nielsen Company. Confidential and proprietary. Media phones are also a growing phenomena (e.g. growing faster than smartphones in Mexico) 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 Copyright © 2010 The Nielsen Company. Confidential and proprietary. Marketers are realizing that devices’ form and features drive data adoption and consumption, more than consumer factors 12 Copyright © 2010 The Nielsen Company. Confidential and proprietary. Data applications usage amongst Smartphone users far outstrip feature phones. 80% use the mobile Internet and e-mail. 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 Copyright © 2010 The Nielsen Company. Confidential and proprietary. 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. 14 Copyright © 2010 The Nielsen Company. Confidential and proprietary. A focus on Smartphone and media phones make sense even in pre- paid 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 15 Copyright © 2010 The Nielsen Company. Confidential and proprietary. There is a higher propensity for pre-paid users to use Smartphones in Italy and Spain 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 Copyright © 2010 The Nielsen Company. Confidential and proprietary. 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. 18 Copyright © 2010 The Nielsen Company. Confidential and proprietary. Mobile Internet, Video and Apps 19 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