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
Mobile Insights 2010Mobile Insights 2010Mobile Insights 2010Mobile Insights 2010
Yes
48%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
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%
U
SA
M
alaysia
Indonesia
Vietnam
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 2009
Launched 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%U
SA
Vietnam
Average
High spender
(US$=$61+,
Vietnam=$10+)
17%
2%
10%
1%
30%
9%
34%
6%
U
SA
Vietnam
15-24 years
25-34 years
35-44 years
45-54 years
28%
6%
25%
4%
U
SA
Vietnam
Male Female
Profile of Mobile Internet users
14%
28%
5%
19%
U
SA
Vietnam
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 5.0 5.9 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
159 152 141
106
145 143
124 110 112 113 117 115 126 129 134 122 122 125 128 125 126 125 117 125
143
312
255
211
163
197 191
214 202 190
157 153
212
325
342
304
155
179
250
268
251
276 276
233 243
300
339 332
226
155
206
186 198 197 211 222 220
235
254
238 229
207 214 202 205 209 201
184
168 179 192
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 Days
Acquired 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
55
62
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 penetration
out of all Smartphone
users
Pre-paid penetration
out 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
29
35
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
NumberofApplicationDownloaders(M)
$0
$90
$180
$270
$360
$450
$540
TotalRevenue(M)
Number of application downloaders Total application revenue
Mobile Application Market
Q1 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
NumberofAudioDownloaders(M)
$0
$60
$120
$180
$240
$300
$360
TotalRevenue(M)
Number of audio buyers Total audio revenue
Mobile Audio Market
Q1 2008–Q1 2010
13
15
17
19
14
13 13
14
13
$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
NumberofGameDownloaders(M)
$0
$50
$100
$150
$200
$250
TotalRevenue(M)
Number of game downloaders Total game revenue
Mobile Game Market
Q1 2008–Q1 2010
137136137130124
10810295
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
NumberofMobileInternetUniqueSubscribers(M)
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
$5,000
TotalRevenue(M)
Number of unique mobile internet subscribers Total mobile internet revenue
Mobile Internet Market Overview
Q1 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
15.3
15.7
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 Viewer
Penetration (of all
Mobile Subscribers)
Mobile Video Penetration is slowly be steadily increasing
USA Data

22
How Viewers Accessed Mobile Video
Mobile 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 Store
AT&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
£20.00
6 month Internet on your
phone
£5.00
1 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 System
Past 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 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

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
Lifestage
and
Life
Priorities
Willingness
to Pay and
Trade-Offs
Mobile
Data and
Device
Aspirations
… creating the perfect 3G package will be easy.
Current
Digital
Lifestyle

Accelerating 3G adoption in Vietnam

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