Accelerating 3G Adoption in Vietnam: November 2010

Accelerating 3G
adoption in
Vietnam
November 2010
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

Evaluating 1 year of 3G in Vietnam

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

3G Usage -
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

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
MobiFone
MobiFone users
users Vinaphone
Vinaphone users
users Viettel
Viettel 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 16 16 10

website/sms/email
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

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%
sia
m
ia
SA
na
es
ay
U
et
al
do
Vi
M
In
Mobile penetration
3G Penetration
Source: Q3’2010 Wireless Intelligence 6

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%

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

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%
m
SA
na
U
28%
et
Vi
m
SA
na
Male Female 36%
et
19%
Vi
14%
27% Average
5%
11% High spender
(US$=$61+,
5%
Vietnam=$10+)
am
SA
U
n
et
Vi
m
SA
Postpaid users Prepaid users
na
U
et
Vi

Expand 3G device availability and
affordability

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

Media phones are also a growing phenomena (e.g. growing
faster than smartphones in Mexico)
Average Price – México (USD)

Mexico Data
342
312 325
304 300
268 276 276
339 255
332 250 251 243
233
211 214 202 212
197 191 190
254 179
163 157 153 235 238 155
226 222 220 229
206 211 207 214 202 205 209 201
186 198 197 192
184 179
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
3.5 4.2 3.2 3.3 4.0 4.6 3.5 3.7 3.6 3.8 2.9 2.3 6.6 6.9 6.5 8.0 9.1 11.1
2.8 2.7 3.4 12.9 12.212.3 13.2
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 93.8 95.494.7 94.694.495.194.7 93.9 93.2 91.6
90.390.5 89.6 87.7 85.9
83.0 80.080.1 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 Sm artphone T2 11

Marketers are realizing that devices’ form
and features drive data adoption and
consumption, more than consumer factors
12

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%

Email 80%
17%
Mobile internet 80%
22%
Application (App) downloads 69%
11%
Picture messaging/MMS 58%
40%
Location-based Services 54%
8%
Content uploads 42%
10%
Pre-installed games 40%
18%
Text alerts 40%
16%
Picture downloads 39%
14%
Game downloads 39%
7%
Streaming audio 37%
4%
Instant messaging 36%
11%
Ringtone downloads 31%
19%
Wallpaper/Screensaver downloads 30%
12%
Mobile video 30%
5%
Mobile commerce 21%
5%
20%
Full-track music downloads 5% Smartphone
Video messaging 20%
9% Feature phone
Online games 14%
3%
VoIP 6%
1%
3%
No mobile activities 24% 13
Questions used: Q407 Source: Nielsen Mobile Insights, US,

Q2 2010

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

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

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

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

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

Mobile Internet, Video and Apps
19

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
Number of Application Downloaders (M)

$460
63 $430
Number of Audio Downloaders (M)
$268 $270 $300 60 $450

54
$383
$237
$226 $335
Total Revenue (M)

Total Revenue (M)
$214 $209 $240 48 $360
45
$281
$172 $165
36 $143 $180 36 $230 $270
27 $169
$120 24 47 $180
41 44
18 33 34 39
32 31 30 30 28 29 35
27 $60 26 29
9 12 22 $90
18
0 $0 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
Number of Mobile Internet Unique Subscribers (M)

$4,500
Number of Game Downloaders (M)
26 $180 $185 $200 250 $3,754 $4,000

$164 $158 $3,283
$156 $152 $3,500
Total Revenue (M)
200
Total Revenue (M)

$2,930
22 $131 $150 $3,000
$119 $2,415
$103 150 $2,262 $2,500
18 $100 $1,806
$1,692 $2,000
100
$1,500
14 19 $50 137 136 137
17 124 130 $1,000
102 108 116
15 50 95
14 14 $500
13 13 13 13
10 $0 0 $0
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2008 2008 2008 2008 2009 2009 2009 2009 2010
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Q1
2009
Q2
2009
Q3
2009
Q4
2009
Q1
2010 20
Number of game downloaders Total game revenue
Number of unique m obile internet subscribers Total m obile 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
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.

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”*
22
*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.

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
23

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

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
25

Affordable and Inventive Data Pricing
26

Allow “data snacking”, especially for pre-paid users, and free trials
RM15 (US$4.5)/ week
RM5 (US$1.3)/ day
27

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

Avoid AYCE pricing. Small amount of users are consuming the bulk of data
traffic for US carriers; between 2009 and 2010 their consumption doubled.
29
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”
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%
7% 8% 8%
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),
Apple iPhone OS (n=959), Android OS (n=338)
31
*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?

Marketing a 3G Lifestyle
32

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 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
33

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
34

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

Example of Consumer Segmentation Based on Mobile Data Usage
(USA) … cont’d
TALKING
MESSAGING
Retired Voice Callers
Senior Basic Followers
Middle Class Rationalists

BROWSING
Ambitious Transients
Engaged Teenagers
Young Utilitarians
DOWNLOADING
Affluent Smartphone
Adopters Young Smartphone
Addicts
36
Page 36
By understanding each segment’s…
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.
37

Thank You

Accelerating 3G Adoption in Vietnam: November 2010

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Evaluating 1 year of 3G in Vietnam