MAVAM Brazil                                                                     10th EdiciónGrupo Convergencia | Converge...
Editorial                              As the global leader in mobile messaging with more than one   one-third of the glob...
Index1. Introduction.........................................................................................................
1. IntroductionDuring the third quarter of 2011, we saw mobile telephony connections pass the 100% milestone in Latin Amer...
1.1. Value Added Services worldwideTo understand the value added services (VAS) business worldwide, we analyzed VAS evolut...
Chart 2Change in share of voice service revenue vs. value added service (VAS) revenue. Between thesecond and third quarter...
Chart 3VAS share of total ARPU. 3Q 2011. Except China Mobile, comparing 1H 2010 with 1H 2011                              ...
At China Mobile, whose figures only allow for a six-monthly comparison, the number of subscribers grew 11.3%annually betwe...
1.2. Value Added services in Latin AmericaThe third quarter of 2011 ended with 607 million mobile telephone lines (includi...
Chart 5Mobile telephony revenue growth in Latin America, by service type. 3Q 2010 x 3Q 2011                               ...
Brazil is the biggest mobile Internet market by revenue and users, although Central America and countries with lowlevels o...
1.3. Value Added Services in BrazilBrazil ended the third quarter of 2011 with 231 million mobile telephone connections (i...
Chart 9Market share by number of lines. In thousands.                                                                     ...
Chart 11Gross and net revenues for the mobile telephone business. 3Q 2010 and 3Q 2011, in BRL and US$                     ...
Chart 12Net revenue distribution by service. 3Q 2011, in millions of BRL and US$                      Voice Serv.         ...
2. MAVAM (Acision Monitor for Mobile VAS)MAVAM Acision aims at analyzing the trends of value added services in Latin Ameri...
3. Messaging Services (Special Topic)Widespread adoption of mobile telephony is also reflected by text messaging services....
Although our assessment is based on message communications between persons, we should point out thatmachine to machine com...
Chart 15Use of text messaging (SMS). Base: total sample (1,493 cases)                                                     ...
3.1.1. Future importance of SMSParticipants were asked to compare the importance of SMS services today and in the future. ...
3.1.3. New SMS and MMS-based servicesPreferred products and solutionsInterviewees were asked to look at a list of 13 servi...
Most important servicesInterviewees were asked how likely they were to buy each of the selected solutions. In this case, p...
Willingness to pay for a serviceThe services people would be more willing to pay for include reminders (44%), automatic SM...
New feature configuration33% of users who would consider using at least one of the suggested products said that the ideal ...
3.2. MMSMMS usage has remained stable throughout the second quarter of 2011: 12% of the sample said they sent at leastone ...
Chart 21In which situations do you send Multimedia Messages (MMS). Base: Users sending at least one MMS in the lastthree m...
Response to incentives55% of interviewees said that one incentive for MMS usage would be lower prices. Another, similar to...
3.3. Instant messaging (IM)44% of participants have used some sort of instant messaging service from their mobile phones i...
IM usage is higher if people have smartphones (66%) compared with people who use traditional phones (27%).Men (47%) use in...
Chart 27Average number of messages sent and received via instant messaging services. Base: Users whohave used each of the ...
Requirements for a new instant messaging serviceInterviewees were asked what the main characteristics should be for a new ...
If the new service meets the quality and feature requirements described, 76% of those interviewed said they woulduse the s...
3.4. Advantages of SMS over instant messagingWe asked people the advantages each service had over the other.46% of people ...
3.5. Advantages of instant messaging over SMSAmong the advantages of instant messaging over SMS, 41% of interviewees menti...
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
MAVAM Brasil 10th edition - MESSAGING
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MAVAM Brasil 10th edition - MESSAGING

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MAVAM 10th Edition brings the updated data from the mobile phone market for value added services in Brazil and Latin America. This special edition focus the Messaging market.

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MAVAM Brasil 10th edition - MESSAGING

  1. 1. MAVAM Brazil 10th EdiciónGrupo Convergencia | Convergencialatina | Convergencia ResearchAvenida Belgrano 680 – Piso 9 (C1092AAT) - Buenos Aires, ArgentinaT. + 54 11 4345-3036info@convergencialatina.com | wwww.convergencialatina.com | research@convergencia.com
  2. 2. Editorial As the global leader in mobile messaging with more than one one-third of the global SMS infrastructure market (as calculated by Informa Telecoms & Media in 2011), Acision launches the tenth edition of MAVAM Brazil with the special theme ¨Messaging”. This edition continues to demonstrate Acision’s commitment to providing a tool that analysis the trends associated with the consumption of mobile VAS and messaging across the Brazilian mobile market during the last quarter messaging and how this impacts operators. In 2011, we witnessed the Brazilian carriers launch aggressive pricing models and offers around SMS to encourage the uptake of this service, while also highlightin highlighting the advantages and potential of using it. However, while widely used in other countries in Latin America, we still see low penetration in the Brazilian market. Subscribers have started to respond positively to alternative and better pricing models, and this research indicates that consumption of SMS is increasing in this Brazil, with some carriers experiencing a rise in traffic by up to four times, depending on the carrier. Oliveira Vancrei Net sales of SMS and MMS during the third quarter of 2011 reached R$ 964 million, representing 37.1% of VAS revenues. Although SMS and messaging representing Acision stands for a major proportion of mobile VAS today, we have used this MAVAMVP regional Am´wrica Latina research to better understand the reasons that motivate or inhibit the use of text and multimedia messaging, with the results represented in this report. results We also demonstrate that opportunities based on SMS go beyond the basic service as we know it today with value added, personalised messaging providing value-added, an enriched user experience through services such as group messaging, auto auto- reply / auto signature and parental control. These services have the potential to auto-signature increase messaging revenues by up to 15 percent and vastly improve the messaging experience and relevance for the end end-user. In addition, we expect to see widespread adoption of services like Collect SMS and Prepaid SMS Reply services in 2012, which modelled on the well known collect call procedure enables prepaid customers to send messages even when out of credit. We also expect IP Messaging services to be a priority for oper operators in 2012, as they seek to deliver new innovative services to compete with ‘OTT’ messaging services. IP Messaging, such as is RCS e, is key to delivering services that have RCS-e, the same user experience, reach and reliability that users have become accustomed accustomed to with SMS, while leveraging the capabilities of broadband IP network and delivering services such as IM, group chat, file transfer and video sharing. Operators will also begin to adopt cloud based services, which will cloud-based become a prominent delivery model in 2012, also means that these innovations will be brought to market faster. With this in mind, this edition of MAVAM has researched the potential demand for new messaging services that enrich and expand the use of messaging, how users use messaging services and looks at business models for paying for each service services and driving up operator revenue. We hope you enjoy reading! |2|
  3. 3. Index1. Introduction....................................................................................................................................................................................................... 4 1.1. Value Added Services worldwide ............................................................................................................................................................... 5 1.2. Value Added services in Latin America ...................................................................................................................................................... 9 1.3. Value Added Services in Brazil ................................................................................................................................................................ 122. MAVAM (Acision Monitor for Mobile VAS) ...................................................................................................................................................... 163. Messaging Services (Special Topic) ............................................................................................................................................................... 17 3.1. SMS ........................................................................................................................................................................................................ 18 3.1.1. Future importance of SMS ................................................................................................................................................................ 20 3.1.2. Barriers to SMS usage ...................................................................................................................................................................... 20 3.1.3. New SMS and MMS-based services ................................................................................................................................................. 21 3.2. MMS ........................................................................................................................................................................................................ 25 3.3. Instant messaging (IM) ............................................................................................................................................................................ 28 3.4. Advantages of SMS over instant messaging ............................................................................................................................................ 33 3.5. Advantages of instant messaging over SMS ............................................................................................................................................ 34 3.5.1. Service preference among recipients ................................................................................................................................................ 35 3.5.2. Service preference based on circumstances ..................................................................................................................................... 36 3.5.3. Service speed and reliability.............................................................................................................................................................. 37 3.6. Use of messaging during end of year festivities ....................................................................................................................................... 38 3.7. Use of advertising to reduce SMS prices ................................................................................................................................................. 394. MAVAM Brazil ................................................................................................................................................................................................ 40 4.1. Entertainment .......................................................................................................................................................................................... 40 4.1.1. File types (images, music, games, ringtones and videos).................................................................................................................. 40 4.1.2. Mobile TV (viewing) .......................................................................................................................................................................... 41 4.2. E-Mail ...................................................................................................................................................................................................... 41 4.3. Mobile Internet ......................................................................................................................................................................................... 43 4.4. Social Networks ....................................................................................................................................................................................... 45 4.5. Mobile Marketing ..................................................................................................................................................................................... 47 4.6. Cash and mobile banking ........................................................................................................................................................................ 49 4.7. GPS and maps ........................................................................................................................................................................................ 505. Conclusions .................................................................................................................................................................................................... 516. Glossary ......................................................................................................................................................................................................... 527. Technical File ................................................................................................................................................................................................. 568. Equipo ............................................................................................................................................................................................................ 58 |3|
  4. 4. 1. IntroductionDuring the third quarter of 2011, we saw mobile telephony connections pass the 100% milestone in Latin America,although there are still countries like Mexico, Bolivia, Nicaragua, Cuba, Peru and others yet to hit this mark. Today,there is more than one connection per person because of circumstances where people own more than twotelephones, have machine to machine (M2M) connections, mobile broadband USB modems and connectionswhich are almost redundant.2011 also saw smartphone penetration increase and mobile broadband services evolve. Mobile broadband is alsodriving a surge in post-paid clients for operators, especially in major markets, while pre-paid plans still account forthe larger share of the market. Social networks and apps are the drivers of this new phase for mobile broadband.In 2012, the main markets in Latin America will have adopted portability and a number of mobile virtual networkoperator (MVNO) businesses will be built. Today, Columbia has the biggest MVNO market which is principallyfocused on broadband. New virtual mobile operators are expected to enter the markets in Brazil, Argentina, Mexicoand Chile, as well as other countries. These operators focus on niche markets and their potential market share isestimated to be 2%. Virgin Mobile is expected to be the newest entrant, which is seeking to become the firstregional mobile virtual operator focusing on the 14-34 age range.The arrival of mobile virtual operators brings a new outlook for spectrum in various countries, generally attractingnew players who will increase competition.Based on these factors, 2012 should see more competition rise, especially in mobile broadband, with growing useof social networks and application by pre-paid clients as well as new businesses. |4|
  5. 5. 1.1. Value Added Services worldwideTo understand the value added services (VAS) business worldwide, we analyzed VAS evolution for the world’sbiggest mobile carriers in various regions of the world. We compared the 3Q values for 2010 and 2011, except forChina Mobile, whose data only allows us to compare changes between 1H 2010 and 1H 2011.The companies evaluated are: América Móvil – Latin America Verizon – United States AT&T - United States Vodafone China Mobile – China* Vodafone United Kingdom Orange - France Vodafone Germany NTT Docomo - Japan Vodafone India Telefónica Telefónica Spain Chart 1 Operators analyzed Telefónica United Kingdom Telefónica Latin America AT& T / Verizon America Móvil + TEF Latam China Telecom France Telecom NTT Docomo Telefónica Vodafone* China Mobile 1H 2010 x 1H 2011 |5|
  6. 6. Chart 2Change in share of voice service revenue vs. value added service (VAS) revenue. Between thesecond and third quarter 2011. Except China Mobile, comparing 1H 2010 with 1H 2011 20% 16% Voice Services VAS Services 15% 10% 7% 6% 4% 5% 5% 4% 3% 3% 2% 2% 2% 3% 3% 1% 1% 0% -1% 0% -1%-1% -3%-3%-3% -5% -4% -5% -10% America Movil Telefónica Latin America AT&T United States France Telecom France NTT Docomo Vodafone United Kingdom Telecom Italy Telefónica United Kingdom Verizon Vodafone Germany Telefónica Spain Vodafone IndiaSource: Convergencia Research based on carriers’ published financial reports.VAS continues to grow its share of total revenue among the carriers surveyed, independent of country. Positivechanges in voice service revenue contributions are normally explained by specific events, such as regulatorymeasures (reduced interconnection fees – Se MAVAM Brazil 9th Edition), competition or seasonal effect.In more advanced countries, the increase is mainly based on mobile Internet revenues driven by the increasingnumber of smartphones. In countries where there is still room to grow the number of connections, SMS still plays amajor role in VAS growth. |6|
  7. 7. Chart 3VAS share of total ARPU. 3Q 2011. Except China Mobile, comparing 1H 2010 with 1H 2011 100% 80% VAS over the total % 60% 40% 54% 46% 46% 43% 40% 39% 35% 20% 32% 30% 26% 25% 25% 16% 0%Source: Convergencia Research based on carriers’ corresponding financial reports – 3Q 2011It is interesting to compare the operations of Vodafone UK, Germany and India.In the UK, Vodafone’s VAS represent 46% of service sales and this share is almost identical to its main competitor,O2 UK (Telefonica).In the UK, which has a significant number of smartphones, Vodafone’s mobile Internet service sales have grownaround 3% quarterly/per quarter, while messaging (SMS and MMS) grow around 2%. However, in Germanymessaging revenues are also growing at 2%, while mobile Internet revenues are growing at 6%.In contrast, India, which has mobile penetration of around 70% of the population, SMS grows at around 43% andmobile Internet at just 2%, mainly because 3G networks were only recently launched (See previous editions ofMAVAM).In the US, both Verizon and AT&T present similar figures to Vodafone, with VAS growth of no more than 5% perquarter and voice revenues declining by 1 to 3%, depending on the carrier, although in this market VAScontribution (40%) is lower that the European countries where Vodafone operates. In Japan, voice and data growthrates for NTT Docomo are similar to the USA, but the main difference is that VAS (contributing 54% of revenues) isNTT Docomo’s main source of income, instead of voice revenues, on which other carriers depend. |7|
  8. 8. At China Mobile, whose figures only allow for a six-monthly comparison, the number of subscribers grew 11.3%annually between the first semester of 2010 and 2011 to 617 million lines, in a country where 75% penetration stilloffers room for post-paid plan growth. As new users are usually “low usage clients” and the “one client with severalchips” is becoming more commonplace, total ARPU dropped 3% in the first half of 2011, year on year.China Mobile has 35 million 3G subscribers (5% of its customer base). At the end of the first half of 2011, VASrepresented 32.2% of carrier revenues, up 18% year on year compared with 5% for voice services, in localcurrency. Of the VAS, the contribution made by SMS has dropped almost 1 percentage point, while revenue forvoice services, mobile Internet and “other VAS” rose between 0.5 and 1 percentage point.Chart 4Mobile penetration vs. VAS contribution to ARPU. 3Q 2011. China Mobile 1H 2010 x 1H 2011 160% VAS % 3Q 11 140% Penetration / 100 inhabitants 120% 100% 80% 60% 40% 20% 0%Source: Convergencia Research based on carriers’ corresponding financial reports and penetration data from various sources. |8|
  9. 9. 1.2. Value Added services in Latin AmericaThe third quarter of 2011 ended with 607 million mobile telephone lines (including 10.5 million trunking2 lines) in 1Latin America and the Caribbean . The number of lines brings regional penetration up to 104% -taking into accounttrunking lines and 102% without them-, although some countries3 have yet to achieve this level of mobilesubscriptions. South America4 and Mexico represent 89% of these lines (540.4 million). The remainder are inCentral America5 (41.7 million) and the Caribbean6 (24.6 million).The main regional telecom holdings are America Movil, operating in 18 countries, and Telefonica, in 14. Together,they represent 64% of lines in Latin America and the Caribbean (37% and 27% respectively).During the quarter through September 30, 2011, total sales for mobile operators in the countries researched were23,397 billion dollars (without trunking services revenues), up 17% year on year. Convergencia Researchestimates that 2011 should end with sales 14% up on 2010 to 91,500 billion dollars.89% of regional revenues are generated in South America and Mexico (17,138 million dollars and 3,753 milliondollars respectively) and the remaining 11% is split between Central America (1,446 million dollars) and theCaribbean (1,061 million dollars).Voice revenues were up 11% between 3Q 2010 and 3Q 2011 to 15,967 billion dollars.Revenues from device sales rose to 2,052 billion dollars, 20% up on the 1,716 billion dollars registered last year.Value added services (VAS) continue to show the most robust growth. During the third quarter of 2011 theygenerated 5,378 billion dollars, 40% up year on year. This means that VAS now represent 25% of service revenues(voice + VAS), compared with 21% previously.2 Trunking or Specialized Mobile Service (SME for its initials in Portuguese) is a service of terrestrial mobile telecommunications of collectiveinterest that uses the radio system, mainly, to perform delivery operations or other forms of telecommunications. Sourse: Annex to resolutionNo. 404 of May 5, 2005 (Anatel).3 Bolivia, Paraguay, Perú, Venezuela, Guyana y Guyana Francesa, México, Belice, Costa Rica, Guatemala, Honduras y Nicaragua, AntillasFrancesas, Bonaire, Cuba, Curazao, Haití, Islas Turcas y Caicos, Montserrat, Puerto Rico, República Dominicana y Santa Lucía.4 Argentina, Bolivia, Brazil, Chile, Columbia, Ecuador, Guiana, French Guiana, Paraguay, Peru, Suriname, Uruguay and Venezuela.5 Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama.6 Anguilla, Antigua and Barbados, French Antilles, Aruba, Bahamas, Barbados, Bermuda, Bonaire, Cuba, Curacao, Dominica, Granada, Haiti,Cayman Islands, Turks and Caicos Islands, British Virgin Islands, Jamaica, Montserrat, Porto Rico, Dominican Republic, Saint Kitts and Neves,Saint Vicente and the Grenadines, Santa Lucia, Trinidad and Tobago. |9|
  10. 10. Chart 5Mobile telephony revenue growth in Latin America, by service type. 3Q 2010 x 3Q 2011 USD 25,000 3Q 10 3Q 11 Variation 45% 40% 40% USD 23,397 USD 20,000 35% Revenues in USD Million USD 20,006 30% USD 15,000 USD 15,967 25% USD 14,439 20% USD 5,378 17% 20% USD 10,000 USD 3,851 15% USD 2,052 USD 1,716 11% USD 5,000 10% 5% USD 0 0% Total Mobile Voice Service VAS Terminals Phone ServiceChart 6Mobile telephony sales by revenue source. 3Q 2010 x 3Q 2011 USD 25,000 USD 144 USD 23.397 USD 840 USD 543 USD 1.527 USD 337 USD 20,006 USD 20,000 Revenues in USD Million USD 15,000 USD 10,000 USD 5,000 USD 0 3Q10 Voice Serv. Terminals Internet Messaging Other VAS 3Q11 Voice Serv. Terminals Internet Messaging Other VASOf the added value services, SMS and MMS have a 51% market share, with mobile Internet at 38% and other VASrepresenting 11%. Other VAS revenue flows include, for example, mobile marketing, revenue sharing for contentand application downloads, mobile banking solutions and others.Mobile Internet revenues have risen 69%, driven by the growth of smartphones, which now represent around 10%of all cell phones in Latin America. | 10 |
  11. 11. Brazil is the biggest mobile Internet market by revenue and users, although Central America and countries with lowlevels of fixed line broadband penetration also drive significant volumes.Text and multimedia messaging services have seen sales rise by 25%, mainly because there are still countries withvery low usage levels and there are still opportunities to increase usage through devices and other commercialtactics.The other VAS’s have seen revenues rise by 31%, based on new mobile businesses like mobile payments, mobilemarketing and application downloads, among others.Chart 7VAS Revenue Shares. Through 3Q 2011. Voice Serv. VAS SMS + MMS Internet Other VAS USD 2,052 38% USD 15,967 USD 5,378 75% 25% USD 2,714 51% USD 613 11% | 11 |
  12. 12. 1.3. Value Added Services in BrazilBrazil ended the third quarter of 2011 with 231 million mobile telephone connections (including 3.9 million trunkinglines from Nextel), representing 120% penetration of the local population. Annual growth is 19% between the thirdquarters of 2010 and 2011. When this study was being concluded, Anatel announced that there were 242.2 millionmobile lines at the end of December 2011, which increases penetration to 124%.Chart 8Mobile Telephone connections by operator. Variation between 3Q 2011 and 3Q 2011 80,000 3Q10 3Q11 Variation 30% 26% 70,000 Mobile Phone Service Customers - In 25% 67,038 60,000 59,210 57,714 57,514 18% 20% 50,000 thousands 16% 48,767 46,947 15% 40,000 15% 42,871 37,387 30,000 10% 20,000 5% 10,000 0 0% Vivo Claro TIM OiVivo remains in the top spot by number of connections, with 67 million connections and year on year growth of16%. In second spot is TIM, with 59.2 million connections and 26% annual growth. In third place is Claro, whichgrew by 18% and now has 57.5 million subscribers. Oi is in fourth place with 42.8 million connections and postedthe lowest annual growth (15%). | 12 |
  13. 13. Chart 9Market share by number of lines. In thousands. Oi CTBC TIM 42,871 633 59,210 19% 0.28% 26% Sercomtel 76 0.03% Vivo Claro 67,038 57,514 30% 25%Vivo and Oi increased ARPU, which fell slightly for Claro and TIM in these quarters.Vivo remained leader in ARPU (25.2 BRL and $ 16). In second place is TIM with ARPU of 23.5 BRL and $12.9.Chart 10Total ARPU for the major operators. 3Q 2010 and 3Q 2011, in BRL and US$ USD 18 3Q10 3Q11 R$ 30 3Q10 3Q11 USD 16 USD 16.0 R$ 25 R$ 26.2 R$ 25.2 USD 14 USD 14.4 R$ 23.5 R$ 22.9 USD 13.5 USD 13.4 R$ 22.2 USD 13.1 USD 12.9 USD 12 R$ 20 ARPU - In USD R$ 21.2 ARPU - In R$ R$ 19.0 USD 10.9 USD 10 USD 10.4 R$ 17.0 R$ 15 USD 8 USD 6 R$ 10 USD 4 R$ 5 USD 2 USD 0 R$ 0 Vivo Claro TIM Oi Vivo Claro TIM OiGross mobile sales, including device sales in the third quarter of 2011 were 21,332 billion BRL, up 11% year onyear. | 13 |
  14. 14. Chart 11Gross and net revenues for the mobile telephone business. 3Q 2010 and 3Q 2011, in BRL and US$ Voice Services Voice Services USD 20,000 Terminals R$ 25,000 R$ 21,332 Terminals USD 13,007 R$ 19,301 R$ 1,535 USD 15,000 R$ 20,000 R$ 1,347 USD 936 R$ 15,412 In Million USD USD 11,029 USD 9,397 In Million R$ USD 770 R$ 13,130 R$ 1,182 USD 7,503 USD 721 R$ 15,000 R$ 840 USD 10,000 R$ 19,797 USD 12,071 R$ 17,955 USD 480 USD 10,260 R$ 14,231 R$ 10,000 USD 8,677 R$ 12,291 USD 7,023 USD 5,000 R$ 5,000 USD 0 R$ 0 3Q10 3Q11 3Q10 3Q11 3Q10 3Q11 3Q10 3Q11 Gross revenues in USD Net revenues in USD Gross revenues in R$ Net revenues in R$Mobile services represent 92.7% of all gross sales, up 10% year on year. The remaining 7.3% is revenues fromdevices, which rose 14%.Between July and September 2011, net VAS sales reached 2,601 billion BRL, up 36% year on year. VAS revenuesrepresent 19.83% of Brazilian mobile operators’ service sales, similar to the contribution recorded in 2Q 2011.In the third quarter, mobile broadband generated net sales of 1,413 billion BRL, representing 54.3% of the VASbusiness. Annual growth was 64%.Instant messaging services (SMS + MMS) rose 14% to 0,964 billion BRL. SMS represents 37.10% of VAS.Other VAS’s grew 6% generating net sales of 0,224 billion BRL. Other VAS represented 8.6% of the value addedbusiness. | 14 |
  15. 15. Chart 12Net revenue distribution by service. 3Q 2011, in millions of BRL and US$ Voice Serv. VAS SMS + MMS Internet Other VAS USD 862 R$ 1,413 54% USD 6,411 USD 1,586 R$ 10,514 R$ 2,601 80% 20% USD 588 R$ 964 USD 136 37% R$ 224 9%Vivo retains top spot in VAS as a percentage contribution to total revenues (23%). VAS represents 18% of servicesales to both TIM and Oi.Chart 13Net VAS sales as a percentage of service sales. Quarterly evolution 2009 – 3Q 2011. 25% 23% 23% Vivo 23% 22% 22% 22% TIM 20% 20% Oi 18% 17% 17% 15% 15% 18% 15% 13% 13% 14% 16% 13% 13% 15% 12% 12% 11% 12% 10% 12% 12% 11% 11% 11% 10% 10% 9% 9% 5% 0% 3Q 3Q 3Q 4Q 3Q 3Q 3Q 4Q 1Q 2Q 3Q 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 | 15 |
  16. 16. 2. MAVAM (Acision Monitor for Mobile VAS)MAVAM Acision aims at analyzing the trends of value added services in Latin America. This study has been carriedout in Brazil since 2009. It started to be carried out in Mexico in 2010 and in Argentina in 2011.This edition of MAVAM Brazil has the following methodological features:a) It was carried out through a survey addressed to 1,493 mobile phone users across Brazil, by means of two different surveying techniques: the Computer-assisted Web Interviewing (CAWI) technique and Computer- assisted Telephone Interviewing (CATI) technique. The sample consists of 193 people interviewed on the phone (CATI) from December 5th through December 15th, 2011, and of 1,300 people interviewed on the Internet (CAWI) from December 5th through December 16th, 2011.b) The geographic area covered by the sample comprises all of Brazil’s regions. The sample considers the number of inhabitants, their socioeconomic status, age and gender in order to improve representativeness nationwide. As the number of Internet users is lower than the number of mobile users, and given that the sample represents a population which is very familiar with the use of technology, the values obtained in some cases bar projections from applying to the entire market, and they are only reference and indicative data. These cases are explained throughout the study.c) The CAWI was supplemented by the CATI in order to create a group for data monitoring and comparison purposes.d) The services analyzed in this edition include: Messaging Mobile Internet • SMS • Social networks • MMS • Payments and mobile banking • E-mail • Mobile Marketing • Instant messaging • Location services (GPS) Entertainment Brazil: Geographical areas • Music Sample Participation North 44 2.9% • Images North-East 266 17.8% • Games South-East 840 56.3% South 256 17.1% • Ringtones Center-West 87 5.8% • TV • Video | 16 |
  17. 17. 3. Messaging Services (Special Topic)Widespread adoption of mobile telephony is also reflected by text messaging services. It is reasonable to say thatalmost 100% of telephones worldwide can be used to send and receive messages. However, as seen in previouseditions of MAVAM, frequency of SMS usage differs by country.The increasing number of smartphones available and instant (IM) or over the top ‘OTT’ messaging solutions formobile phones are challenging traditional text messaging services in the field of interpersonal communications.This is why this tenth edition of MAVAM will look at the new products and solutions that seek to enrich traditionalSMS and generate new operator revenues.The characteristics of the messaging services examined in this section are:1. Automatic signature: define a signature or greeting at the end of messages (E.g.: “I’m on vacation”, “I’m busy right now / I’m out of office”).2. Personal White List / Black List: create contact lists to define who can and cannot send messages to users.3. Automatic forwarding: allows for automatic resending of messages received to another telephone number (e.g. your personal or work phone).4. Automatic email forwarding: allows messages received to be automatically forwarded to an email account for backup or reading on a PC.5. Distribution list: to send messages to a group of contacts whose recipients can also respond to the entire group.6. Delivery receipt: receive a delivery confirmation for sent messages.7. Search: ability to search saved messages8. Reminders: Receive reminders for appointments.9. The party called pays for sending the message: in order to be able to send a message, it is paid for by the recipient.10. Cloud-based archive to save all messages in a cloud storage service provided by the operator.11. Multiple SIM cards: the ability to send messages from any other device (tablets, dongles, USB modems, etc.).12. Alias: configure names or nicknames for a user’s number.13. SMS Pager: receive text messages or calls without showing a number, but showing a nickname: people send SMS messages to a service center (for example, 12345) starting with the nickname, followed by the message.We also compare the features users find most important in an instant messaging and SMS services. Additionally,we look at situations in which users prefer to use other forms of communication. | 17 |
  18. 18. Although our assessment is based on message communications between persons, we should point out thatmachine to machine communications and enterprise messaging through the adoption as a new B2C (business toconsumer) communication channel (e.g. mobile couponing, promotions, SMS bank services, governmentprocedures, etc.) will play an important role in the future of SMS.3.1. SMS89% of participants said they have used some sort of text messaging (SMS) service in the last three months. Thesefigures have remained steady over the past four quarters with positive and negative variations not exceeding onepercentage point.Chart 14Use of text messaging (SMS). Base: total sample (4Q 2010: 1,206 cases; 1Q 2011; 1,494 cases; 2Q 2011: 1,570 cases; 4Q2011: 1,493 cases) 100% 95% Percentage of cases 90% 90% 90% 89% 88% 85% 80% 4Q2010 1Q2011 2Q2011 4Q2011Among SMS users, usage frequency shows a slightly upward trend. 58% of users send more than one SMS daily,2 percentage points up on the second quarter of 2011, while at the same time the proportion of those not using theservice has fallen (21% versus 24% in the second quarter). | 18 |
  19. 19. Chart 15Use of text messaging (SMS). Base: total sample (1,493 cases) 21% 5% 21% Yes 89% 6% 58% I have not sent any SMS over the last 3 months I do not make use of the service I send very f ew text messages. I hardly ever send text messages I send one SMS per week I send more than one SMS per weekIncreased frequency can be explained as a result of the more aggressive bundles and offerings in the SMS marketduring 2011. For example, when we finalized this edition, Brazilian operators were offering pre-paid SMS packagesthat reduced SMS prices by between 50% (Claro) and 88% (Oi). Monthly packages of 100 SMS messages costaround $5. | 19 |
  20. 20. 3.1.1. Future importance of SMSParticipants were asked to compare the importance of SMS services today and in the future. 46% said that SMSwill be more important than it is now, while 18% felt it would be less important.Chart 16Future importance of SMS. Base: total sample (1,493 cases) 100% 80% Percentage of cases 60% 46% 40% 18% 28% 27% 19% 20% 11% 7% 8% 0% I dont know / It will be less It will have It will be It will be more It will be more no answer important than small important important important than today importance today3.1.2. Barriers to SMS usageIt is important to ask what impedes greater SMS usage. Among SMS users (89% of the sample), the main reasonthey do not use the service more is that there is no need to (16%), the service is expensive (18%) and some usersprefer voice communications (18%). Other less common responses include a lack of (pre-paid) credit andpromotional messaging packages (7%) and a lack of contacts who use the service (3%).Among non-users (11% of participants), the main reason for lack of uptake (for 66%7) is that they prefer voicecommunications. This adoption barrier has remained constant throughout MAVAM’s 2011 surveys. Other reasonsinclude a lack of usage – where user is not familiarized with its use (24%) or no need to use the service (21%).Price does not seem to be a significant barrier to people who have not adopted the service.7 Multiple response. | 20 |
  21. 21. 3.1.3. New SMS and MMS-based servicesPreferred products and solutionsInterviewees were asked to look at a list of 13 services as add-ons and improvements to text messaging as weknow it today, and select the ones they would like to use. Each participant was allowed to select more than oneoption from the list.The most popular were: delivery receipt (86%), multiple SIM cards (85%), reminders (82%) and searching savedmessages (80%).Chart 17Which of these features would you like to see available for SMS (text messaging) Service.Base: total sample (1,493 cases). Multiple responses. Receipt notif ication 86% Multiple SIM 85% Reminders 82% Search 80% Alias 72% Auto-signature 71% Distribuition list 71% Auto-send to an email account 70% White/black lists personalization 68% Cloud message 66% Paid in the destination 63% SMS Beeper 63% Auto-send to another cell phone 60% 0% 20% 40% 60% 80% 100% Percentage of casesParticipants were asked how difficult it was to understand each of the proposed services. Between 2% and 4% ofinterviewees had difficulty understanding the value of the proposed services. The biggest percentage (4%) wasrecorded for the following solutions: automatically forwarding received messages, creating discussion lists, creatingnicknames (aliases) and the SMS Pager. | 21 |
  22. 22. Most important servicesInterviewees were asked how likely they were to buy each of the selected solutions. In this case, participants useda scale of importance ranging from 1 (not important) to 5 (very important).Of the four features with the biggest potential for adoption (delivery receipt, multiple SIM cards, reminders andsearches) users said that delivery confirmation was the most important (81%).Chart 18How important are each of the SMS services you said you would like to have in the future?Base: cases in which users would like certain features. Note: to make the graph easier to read, we have only included the features with the mostpotential. Receipt notif ication 7% 12% 81% Multiple SIM 6% 17% 77% Reminders 7% 14% 79% Search 8% 20% 72% 0% 20% 40% 60% 80% 100% Percentage of cases Not important / Somewhat important Neutral Important / Very important | 22 |
  23. 23. Willingness to pay for a serviceThe services people would be more willing to pay for include reminders (44%), automatic SMS forwarding to anemail account (43%), Multiple SIM cards (43%), cloud-based files (43%) and the SMS Pager (41%).For these five services, the average value people would be willing to pay is between 3.4 and 3.8 BRL. The highestand most frequently mentioned value is 5 BRL for the automatic forwarding and cloud storage service.Willingness to pay for SMS service features. Base: 852 (Number of people who said they would like to have each of theservices). Multiple responses. % of people that Average value Most frequently Feature would be willing to people would be mentioned value pay for the service willing to payReminders 44% R$3.5 R$0.5Auto-send to an email account 43% R$3.4 R$5.0Multiple SIM 43% R$3.7 R$1.0Cloud message 43% R$3.8 R$5.0SMS Beeper 41% R$4.3 R$1.0Auto-send to another cell phone 39% R$3.1 R$1.0Receipt notification 39% R$3.3 R$0.5Paid in the destination 38% R$3.2 R$0.5Distribuition list 37% R$4.0 R$1.0White/black lists personalization 35% R$5.1 R$5.0Auto-signature 30% R$4.6 R$5.0Search 29% R$3.3 R$0.5Alias 27% R$3.7 R$1.0 | 23 |
  24. 24. New feature configuration33% of users who would consider using at least one of the suggested products said that the ideal method forconfiguring the service would be via an application installed on their phone. In second place, 26% of participantssaid that the best option would be SMS configuration and 24% said they would prefer to configure the service viathe operator’s Internet portal.Chart 19What would be the best way to configure the SMS services listed. Base: People who like to have at least onefeature (1,428 cases). Multiple responses. Through an app installed on your cell phone 33% Sending an SMS to conf igure services 26% Through the operators web site 24% Through an app installed on your computer 8% through a complement installed in the email 4% manager Through a WAP portal 3% Other 2% 0% 20% 40% 60% 80% 100% Percentage of cases | 24 |
  25. 25. 3.2. MMSMMS usage has remained stable throughout the second quarter of 2011: 12% of the sample said they sent at leastone MMS per week (active users). 77% of interviewees said that their cell phones were able to send multimediamessages, similar to the figure in the second quarter (75%).Chart 20MMS (Multimedia Messaging) usage. Base: total sample (4Q 2011: 1,493 cases; 2Q 2011: 1,570 cases) 100% 2Q2011 77% of users with MMS-enabled cell phones 4Q2011 80% 75% 77% Percentage of cases 60% 40% 10% of users who may prospectively be turned into active users 12% of active users 20% 12% 10% 6% 7% 5% 5% 0% Mobile Phones enabled I send very few MMS, I I send one MMS in I send more than one to send MMS hardly send MMS average MMSIn this edition, we surveyed the occasions and situations that users send MMS messages. Our results showed that69% of users who sent MMS messages in the last three months said they do so on special occasions like birthdaysand other celebrations. 33% send MMS messages when they are with friends, and 27% send them at theweekends. Other situations mentioned by 11% of the sample are: when they want to send photos to relatives or asa surprise, when they want someone’s opinion about something they are going to buy or want to show someone aphoto taken in an unusual situation. | 25 |
  26. 26. Chart 21In which situations do you send Multimedia Messages (MMS). Base: Users sending at least one MMS in the lastthree months (325 cases). Multiple responses. On special occasions (eg: anniversaries, birthdays, 69% etc..) When hanging out with 33% f riends On holidays 27% For some labor issue 19% Other situation 11% 0% 10% 20% 30% 40% 50% 60% 70% 80% Percentage of casesAs the user base is so low (12% of active users), we asked why people didn’t use MMS more. 41% said thatsending MMS messages is expensive. 18% believe that the service does not work properly and 16% said that theydid not use the service more regularly because they are not sure if the messages are received. Among otherreasons not listed (13%), people said they didn’t see a need to use MMS, they preferred not to send photos inmessages and email is better for sending photos.Chart 22What are your reasons for not using MMS messages on your cell phone (or not using themmore)? Base: total sample (1,493 cases). Multiple responses. It is very expensive 41% I do not have how to conf irm if the receiver 16% received the message My cell phone is easy to send MMS 8% My cell phone is not conf igured to send MMS 8% MMS service does not work well 18% Never try sending a multimedia message 24% Other reasons 13% 0% 10% 20% 30% 40% 50% Percentage of cases | 26 |
  27. 27. Response to incentives55% of interviewees said that one incentive for MMS usage would be lower prices. Another, similar to SMS, wouldbe delivery confirmation (29%).22% believe that MMS messaging packages would also encourage usage.Among the 5% of responses presenting other incentives, the most interesting are: faster delivery, offering supportfor using the service on mobile phones and that all devices should be able to open these types of message.Chart 23What would encourage you to use MMS messaging more (or more frequently)? Base: total sample(1,493 cases). Multiple responses. Cost per message should be lower (f or 55% example: it could cost the same as SMS) Be sure that the message will reach the 29% destination Operators would have to of f er MMS 22% bundle Owning a cell phone able to send MMS 13% Others 5% Dont know 16% 0% 10% 20% 30% 40% 50% 60% Percentage of cases | 27 |
  28. 28. 3.3. Instant messaging (IM)44% of participants have used some sort of instant messaging service from their mobile phones in the past threemonths.Chart 24Access to instant messaging. Base: total sample (4Q 2010: 1,206 cases; 1Q 2011; 1,494 cases; 2Q 2011: 1,570 cases; 4Q2011: 1,493 cases) 100% 80% Percentage of cases 60% 44% 40% 33% 28% 20% 20% 0% 4Q 2010 1Q 2011 2Q 2011 4Q 2011Chart 25Use of instant messaging. Base: total sample (1,493 cases) Yes, I made use of Instant Messaging 37% services during the last three months 44% No, I didnt make use of Instant Messaging services during the last three months 19% I never made use of Instant Messaging services during the last three monthsIM usage increases when people switch to new devices. 56% of people who bought their device in the last sixmonths have used instant messaging. This percentage drops to 51% and 33% among people who have had thesame device for between 6 months and one year and for more than one year, respectively. | 28 |
  29. 29. IM usage is higher if people have smartphones (66%) compared with people who use traditional phones (27%).Men (47%) use instant messaging more than women (40%).Of those who use instant messaging (44%), the most frequently mentioned chat service is Facebook (29%),followed by Twitter (20%) when used as a messenger. While Twitter is not an instant messaging service, rathermore of a social network, the immediate delivery and short message length result in users treating the service inroughly the same way as an instant messaging service.Chart 26Use of instant messaging as a platform. Base: IM users (653 cases). Multiple responses. Facebook Chat 29% Twitter 20% eBuddy XMS 10% Google Talk 10% iMessage 7% Skype Messenger 7% BlackBerry Messenger/Ping 2% WhatsApp 2% Others 4% 0% 5% 10% 15% 20% 25% 30% 35% Percentage of casesWe asked people who said they used the IM services in Chart 27 how many messages they sent and received onaverage every week over the past three months. The results show that some platforms are used to send messagesand others to receive them.Twitter, BBM and Skype are preferred to send messages and GTalk, eBuddy, iMessage, Facebook Chat andWhatsApp to receive them.eBuddy posts the biggest difference between the average number of messages sent and received: 15 places.Twitter (2.4 posts) and Facebook Chat (1.5 posts) are the most balanced services in terms of messages sent andreceived. | 29 |
  30. 30. Chart 27Average number of messages sent and received via instant messaging services. Base: Users whohave used each of the services. 37.3 Google Talk 29.1 48.0 eBuddy XMS 33.1 28.3 Twitter 30.8 Average messages 39.6 received per week iMessage 32.8 Average messages sent 21.5 per week BlackBerry Messenger/Ping 30.1 39.0 Facebook Chat 37.5 26.7 Skype Messenger 30.8 39.1 WhatsApp 35.5 0 10 20 30 40 50 60 Messanges per weekBarriers to instant messaging adoptionThe main reason that people do not use instant messaging from their mobile phone is that their phone does notallow for installation of this type of application (54%). Second ranked is the low speed and reliability of mobileinternet connections (20%). Third place is the fact that people prefer to access these services from a PC ornotebook, make voice calls or use SMS (8%).Chart 28What reasons keep you from using (or using more often) instant messaging services from thecell phone you use with the greatest frequency? Base: total sample (1,493 cases). Multiple responses. My phone does not support IM 54% Internet connection is too slow 20% I pref er to access in my computer in the of f ice / 8% f azer chamadas de voz ou enviar SMS Not interesting / need / time 7% The internet connection f rom the cell phone is expensive / i dont have credit or data bundle to 5% access the internet Dont know how to use or access the application 4% Others 4% 0% 10% 20% 30% 40% 50% 60% Percentage of cases | 30 |
  31. 31. Requirements for a new instant messaging serviceInterviewees were asked what the main characteristics should be for a new instant messaging service.In first place are reasons based on the type of contract. 59% of the sample said that the cost of using the serviceshould be included in the plan (this is the most common form of benefit).In second place are reasons linked to guaranteed performance. 56% said it should work smoothly.Chart 29Features a new instant messaging service should offer. Base: total sample (1,493 cases). Multiple responses. It must be without cost / included in the contract 59% Service should always work, without troubles 56% Cost must be reasonable 52% It must be sure message is received af ter seconds 51% Service should be used also in the computer 40% Able to share f iles, images, videos with my f riends 39% Able to see when the other party is typing an answer 38% Able to contact anyone 35% Able to contact all SMS users 32% Able to chat with others in the contact group 27% Able to see the latter conversations 25% Able to share status and f eelings with f riends 20% Able to share my location 14% Others 4% 0% 20% 40% 60% 80% Percentage of cases | 31 |
  32. 32. If the new service meets the quality and feature requirements described, 76% of those interviewed said they woulduse the service. Potential for instant messaging is greater among people between 18 and 24 years of age (81%)and 25-34 (79%).Chart 30What would be your attitude towards using a single instant messaging service? Base: total sample(1,493 cases) 100% 80% Percentage of cases 76% 60% Would use it 41% 40% 35% 4% Would not use it 18% 20% 3% 2% 2% 0% Dont know Certainly would Probably would Maybe yes or Probably would Certainly would not use not use no use use22% of people who said they used instant messaging reported they would only do so if it is free of charge. 9% didnot say how much they were willing to pay.58% of people who use the service would be willing to pay between 0.25 and 2.00 BRL per month.How much would you be willing to pay for these services? Base: total sample (1,493 cases) Value people would be willing to pay %Nothing or would only use if free of charge 22%Less than 0.25 BRL per month 14%Between 0.25 and 0.50 BRL per month 17%Between 0.50 and 1.00 BRL per month 12%Between 1.00 and 2.00 BRL per month 15%More than 2.00 BRL per month 12%Dont know 9% | 32 |
  33. 33. 3.4. Advantages of SMS over instant messagingWe asked people the advantages each service had over the other.46% of people said that SMS costs less than instant messaging. While the total amount a user pays for SMSmessages depends on usage, the view that text messaging is cheaper than instant messaging can be linked to theposition that, generally speaking, better quality phones like smartphones are needed to use instant messaging, aswell as a data plan. The importance of this response is that the user’s perceptions can be altered through productcommunication proposals.Another 33% said that unlike instant messaging, people know that when someone receives an SMS text message,the message is important. This response reveals that instant messaging is a communication method used in moreinformal situations.In third place as a comparative advantage over instant messaging, with 32%, is the ability to communicate withanyone. This response may indicate the users know that only more expensive devices provide IM access, whileSMS is available on almost any device on the market.Chart 31In your opinion, what are the advantages of SMS compared with instant messaging servicesused from your mobile phone? Base: 1,322 cases. Multiple responses. Note: We have only shown the five most significantadvantages for illustrative purposes. Have low cost 46% When I use SMS I know that the recipient 33% knows its an important message I can communicate with any person 32% I can easily send a message to a large 25% quantity of people To know that the message is received 23% af ter seconds 0% 10% 20% 30% 40% 50% Percentage of casesOther advantages of SMS over IM mentioned: ease of use (no additional application needed), no Internet accessrequired and unlimited SMS packages are available. | 33 |
  34. 34. 3.5. Advantages of instant messaging over SMSAmong the advantages of instant messaging over SMS, 41% of interviewees mentioned low cost. In this case, wecan presume that when a user has chosen a more expensive device that allows for instant messaging andsubsequently pays for a data plan, they realize that in general terms, instant messaging does not incur anyadditional cost. The fact that the advantage of both services are linked to a perception of lower cost for subscribersmeans that operators need to pay special attention to their pricing models when expanding either service.38% said that one advantage is IM can be used on a PC. This is important because it reveals all communicationoptions need to be available on several devices (voice, messaging, emails, video, etc.).38% also said that an IM advantage over SMS is knowing the message will be received in a matter of seconds.Chart 32In your opinion, what are the advantages of instant messaging services (e.g.: WhatsApp, SkypeMessenger, Facebook Chat, BlackBerry Messenger, Google Talk, etc.) Compared withSMS/MMS? Base: 1,322 cases. Multiple responses. Note: We have only shown the five most significant advantages for illustrativepurposes. Have low cost 41% Use the service also in the 38% personal computer To know that the message is 38% received af ter seconds Be sure that the answer will be 35% received f ast Be sure the receiver will read the 35% message promptly 0% 10% 20% 30% 40% 50% Percentage of casesOther benefits of IM over SMS mentioned by interviewees is that IM is free, you can speak to people whosetelephone number you do not know, it can be used over Wi-Fi and you can see the status of other contacts. | 34 |

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