Mobile Data Usage Trends 2011-2015
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Analysis, User Profiles and Growth Forecasts for Worldwide Mobile Data Use 2011 to 2015 ...

Analysis, User Profiles and Growth Forecasts for Worldwide Mobile Data Use 2011 to 2015

Technological advances within the mobile ecosystem have led to seismic shifts in terms of mobile data usage. But beyond the broad stroke analysis of industry headlines, there is a pressing need to understand the finer details of the surging uptake of data services among mobile users in both developed and emerging countries.

Building on our strong portfolio of high-quality, data-centric market studies - and naturally underpinned by wider analysis, growth forecasts and market sizing of mobile data revenue and traffic - this exciting report uses survey-led research to assemble country case studies to deliver invaluable insight in to the specific trends of mobile data use, culminating in a Typical User Profile for each market analysed.

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Mobile Data Usage Trends 2011-2015 Mobile Data Usage Trends 2011-2015 Document Transcript

  • Mobile Data Usage Trends 2011-2015 © 2011, Portio Research. All Rights Reserved 1
  • Mobile Data Usage Trends 2011-2015 Portio Research Limited. Published August 2011 by Portio Research Limited © Copyright 2011. www.portioresearch.com info@portioresearch.com Disclaimer and Legal Notices Disclaimer Every care has been taken in the preparation of this study to ensure that the information contained herein is accurate, factual and correct to the best of our knowledge, at time of publishing. All opinions, suppositions, estimates and recommendations included in this document are solely the opinions of the authors unless otherwise stated. Portio Research Limited accepts no liability for any loss or damage or unforeseen consequential loss or damage arising from the use of the information contained within this document. The opinions, suppositions, estimates and recommendations within this document cannot be guaranteed, and readers use this information at their own risk. The information published in this document is subject to change without notice at any time, and Portio Research Limited accepts no liability or obligation to inform the reader of such changes. Portio Research Limited do not promote or endorse any specific companies or products, the views and opinions we express in this document are wholly our own assessments, and independent from any external interest or influence. Many terms and phrases and trade names used in this document are proprietary and Portio Research Limited recognises and acknowledges that all trademarks are copyright, belonging to their respective owners. Where possible, this document accords such terms and phrases and trade names to their respective owners. All Rights Reserved. No part of this document can be copied, shared, redistributed, transmitted, displayed in the public domain, stored or displayed on any internal or external company or private network or electronic retrieval system, nor reprinted, republished or reconstituted in any way without the express written permission of the publisher. Forwarding of this electronic document without the correct legal licence is theft. It‘s unethical, immoral and against the law. If you have any questions about the legal licence conditions under which this document has been distributed, please contact Portio Research on info@portioresearch.com If you did not buy this document and a colleague or associate has sent it to you, do not assume you are legally entitled to read it, it is your responsibility to ensure you have the correct legal licence to read this document. 2 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Contents Introduction ............................................................................................................................10 Worldwide Mobile Market ......................................................................................................16 Mobile Data Services Market.................................................................................................20 Evolution of Mobile Data Services Market ......................................................................................... 20 Types of Mobile Data Services .......................................................................................................... 24 Growth of Data Services Market ........................................................................................................ 26 Convergence of Mobile and Internet ............................................................................................... 26 Role of Smartphones in the Uptake of Mobile Data Services .......................................................... 26 Tablets Catalysing the Growth of Data Services ............................................................................. 27 High-Speed Data Networks ............................................................................................................. 27 Compelling and Innovative Data Services ....................................................................................... 27 Factors that make a Data Service Successful ................................................................................... 28 Monetising the Mobile Data Services Business ................................................................................. 30 Drivers and Inhibitors ......................................................................................................................... 32 Drivers ............................................................................................................................................. 32 Inhibitors.......................................................................................................................................... 33 Market Size..............................................................................................................................35 Forecast Methodology ....................................................................................................................... 35 Market Size ........................................................................................................................................ 35 Mobile Data Traffic .......................................................................................................................... 35 Mobile Data Revenue ...................................................................................................................... 39 Case Studies – Regional Trends ..........................................................................................44 Methodology ...................................................................................................................................... 44 The UK ............................................................................................................................................... 45 Monetisation of Mobile Services ...................................................................................................... 46 Popular Mobile Activities ................................................................................................................. 48 Smartphone Users .......................................................................................................................... 49 Internet Usage ................................................................................................................................. 50 Mobile Applications ......................................................................................................................... 53 Social Networking............................................................................................................................ 57 Typical User Profile ......................................................................................................................... 58 China ................................................................................................................................................. 59 Monetisation of Mobile Services ...................................................................................................... 60 Popular Mobile Activities ................................................................................................................. 61 Smartphone Users .......................................................................................................................... 62 Internet Usage ................................................................................................................................. 64 Mobile Applications ......................................................................................................................... 69 Social Networking............................................................................................................................ 72 Typical User Profile ......................................................................................................................... 73 India ................................................................................................................................................... 74 Monetisation of Mobile Services ...................................................................................................... 75 Popular Mobile Activities ................................................................................................................. 76 Smartphone Users .......................................................................................................................... 77 Internet Usage ................................................................................................................................. 78 Mobile Applications ......................................................................................................................... 81 Social Networking............................................................................................................................ 85 Typical User Profile ......................................................................................................................... 86 The US ............................................................................................................................................... 87 Monetisation of Mobile Services ...................................................................................................... 88 Popular Mobile Activities ................................................................................................................. 89 Smartphone Users .......................................................................................................................... 90 Internet Usage ................................................................................................................................. 91 Mobile Applications ......................................................................................................................... 94 Social Networking............................................................................................................................ 97 Typical User Profile ......................................................................................................................... 98 Chile................................................................................................................................................... 99 Monetisation of Mobile Services .................................................................................................... 100 Popular Mobile Activities ............................................................................................................... 101 Smartphone Users ........................................................................................................................ 102 © 2011, Portio Research. All Rights Reserved 3
  • Mobile Data Usage Trends 2011-2015 Internet Usage ............................................................................................................................... 103 Mobile Applications ....................................................................................................................... 106 Social Networking.......................................................................................................................... 110 Typical User Profile ....................................................................................................................... 111 The UAE .......................................................................................................................................... 112 Monetisation of Mobile Services .................................................................................................... 114 Popular Mobile Activities ............................................................................................................... 115 Mobile Applications ....................................................................................................................... 117 Internet Usage ............................................................................................................................... 117 Social Networking.......................................................................................................................... 119 Typical User Profile ....................................................................................................................... 121 Managing Data Traffic Growth ............................................................................................123 Summary and Conclusions .................................................................................................129 Appendices ...........................................................................................................................136 Glossary ........................................................................................................................................ 137 Portio Research Classifications ..................................................................................................... 151 Companies Mentioned in this Report ............................................................................................ 152 About the Authors.......................................................................................................................... 154 Also available from Portio Research Limited ................................................................................... 155 4 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 List of Figures Figure 1: Figure 2: Figure 3: Figure 4: Figure 5: Figure 6: Figure 7: Figure 8: Figure 9: Figure 10: Figure 11: Figure 12: Figure 13: Figure 14: Figure 15: Figure 16: Figure 17: Figure 18: Figure 19: Figure 20: Figure 21: Figure 22: Figure 23: Figure 24: Figure 25: Figure 26: Figure 27: Figure 28: Figure 29: Figure 30: Figure 31: Figure 32: Figure 33: Figure 34: Figure 35: Figure 36: Figure 37: Figure 38: Figure 39: Figure 40: Figure 41: Figure 42: Figure 43: Figure 44: Figure 45: Figure 46: Figure 47: Smartphone User Base – Worldwide (In Million, 2008 – 2015F) ...................................... 11 iPad Shipments – Worldwide (In Million, Q2 2010 – Q2 2011) ......................................... 11 App Stores – Number of Mobile Application Downloads to date (Worldwide, In Billion, Early-July 2011) ................................................................................................................ 12 Cost per MB of Mobile Data – Worldwide (In USD, 2008 – 2015F) ................................... 13 Monthly Mobile Data Traffic per Smartphone User – Worldwide (In Megabytes, 2008 – 2015F) .............................................................................................................................. 13 Mobile Subscriber Base – Worldwide (In Million, 2008 – 2015F) ...................................... 16 Mobile Subscriber Base – Regional (In Million, 2008 – 2015F) ......................................... 17 Worldwide Subscriber Base – Regional Contribution (In Percent, 2010) .......................... 18 Worldwide Subscriber Base – Regional Contribution (In Percent, 2015F) ........................ 18 Evolution of Mobile Data Services Market (1993-2005) .................................................... 21 Evolution of Mobile Data Services Market (2006-2011) .................................................... 22 i-mode Services – Number of Subscriptions (Japan, In Million) ........................................ 23 Type of Mobile Data Services ........................................................................................... 25 App Stores – Number of Available Applications (June 2011) ........................................... 28 Factors Behind a Successful Data Service ....................................................................... 28 Drivers of Mobile Data Services........................................................................................ 32 Inhibitors of Mobile Data Services .................................................................................... 33 Mobile Data Traffic per Month – Worldwide (In Petabytes, 2008 – 2015F)....................... 36 Worldwide Mobile Data Traffic – Regional Contribution (In Percent, 2010) ...................... 37 Worldwide Mobile Data Traffic – Regional Contribution (In Percent, 2011F) .................... 37 Worldwide Mobile Data Traffic – Regional Contribution (In Percent, 2015F) .................... 38 Mobile Data Traffic Growth by Region (In Percent, 2010 – 2015F) .................................. 38 Mobile Data Revenue – Worldwide (In USD Billion, 2008 – 2015F) ................................. 39 Worldwide Mobile Data Revenue – Regional Contribution (In Percent, 2010).................. 40 Worldwide Mobile Data Revenue – Regional Contribution (In Percent, 2011F) ............... 41 Worldwide Mobile Data Revenue – Regional Contribution (In Percent, 2015F) ............... 41 Mobile Data Revenue Growth by Region (In Percent, 2010 – 2015F) .............................. 42 Break-out of Respondents by Average Monthly Mobile Spend – The UK (In Percent, June 2011) ................................................................................................................................ 46 Break-out of Voice vs. Non-voice Mobile Spend – The UK (In Percent, June 2011) ........ 47 Top 6 Activities on Mobile Phone – The UK (June 2011) ................................................. 48 Average Time Spent on Various Activities via Mobile per Day – The UK (In Hours, June 2011) ................................................................................................................................ 49 Contribution of factors deterring Smartphone Usage – The UK (In Percent, June 2011) . 49 Categories of Smartphone owned – The UK (In Percent, June 2011) .............................. 50 Drivers contributing to the increase in Mobile Internet access – The UK (June 2011) ...... 51 Break-out of Mobile Data Plan Types – The UK (In Percent, June 2011) ......................... 51 Break-out of Network Access preferred for Heavy File Downloads – The UK (In Percent, June 2011) ........................................................................................................................ 53 Percentage of Smartphone Users who Download Mobile Apps – The UK (June 2011) ... 53 Top 5 Mobile Application Types – The UK (June 2011).................................................... 54 Paid vs. Free Apps Download Behaviour – UK Smartphone Users (In Percent, June 2011) .................................................................................................................................... 54 Factors deterring Mobile App Users from Downloading Paid Mobile Apps – The UK (June 2011) ................................................................................................................................ 55 How do Mobile Application Users Discover New Apps – The UK (June 2011) ................. 56 Break-out of Respondents by Average Monthly Mobile Spend – China (In Percent, June 2011) ................................................................................................................................ 60 Break-out of Voice vs. Non-voice Mobile Spend – China (In Percent, June 2011) ........... 60 Top 6 Activities on Mobile Phone – China (June 2011) .................................................... 61 Average Time Spent on Various Activities via Mobile per Day – China (In Hours, June 2011) ................................................................................................................................ 62 Contribution of factors deterring Smartphone Usage – China (In Percent, June 2011) .... 63 Categories of Smartphone owned – China (In Percent, June 2011) ................................. 63 © 2011, Portio Research. All Rights Reserved 5
  • Mobile Data Usage Trends 2011-2015 Figure 48: Total Internet Users and Mobile Internet Users – China (In Million, 2006-2010) .............. 64 Figure 49: Mobile Internet Users as a percentage of Total Internet Users – China (In Percent, 2006 – 2010) ................................................................................................................................ 65 Figure 50: Percentage share of Internet Users accessing Internet via Desktop, Laptop and Mobile – China (In Percent, End-2010) ........................................................................................... 65 Figure 51: Drivers contributing to the increase in Mobile Internet access – China (June 2011)......... 66 Figure 52: Break-out of Mobile Data Plan Types – China (In Percent, June 2011)............................ 66 Figure 53: Break-out of Network Access preferred for Heavy File Downloads – China (In Percent, June 2011) ........................................................................................................................ 68 Figure 54: Percentage of Smartphone Users who Download Mobile Apps – China (June 2011) ...... 69 Figure 55: Top 5 Mobile Application Types – China (June 2011) ...................................................... 69 Figure 56: Paid vs. Free Apps Download Behaviour – China Smartphone Users (In Percent, June 2011) ................................................................................................................................ 70 Figure 57: Factors deterring Mobile App Users from Downloading Paid Mobile Apps – China (June 2011) ................................................................................................................................ 71 Figure 58: How do Mobile Application Users Discover New Apps – China (June 2011) .................... 71 Figure 59: Break-out of Respondents by Average Monthly Mobile Spend – India (in Percent, June 2011) ................................................................................................................................ 75 Figure 60: Break-out of Voice vs. Non-voice Mobile Spend – India (In Percent, June 2011) ............. 75 Figure 61: Top 6 Activities on Mobile Phone – India (June 2011) ...................................................... 76 Figure 62: Average Time Spent on Various Activities via Mobile per Day – India (In Hours, June 2011) ................................................................................................................................ 77 Figure 63: Contribution of factors deterring Smartphone Usage – India (In Percent, June 2011) ...... 77 Figure 64: Categories of Smartphone owned – India (In Percent, June 2011) .................................. 78 Figure 65: Drivers contributing to the increase in Mobile Internet access – India (June 2011) .......... 79 Figure 66: Break-out of Mobile Data Plan Types – India (In Percent, June 2011) ............................. 79 Figure 67: Break-out of Network Access preferred for Heavy File Downloads – India (In Percent, June 2011) ........................................................................................................................ 81 Figure 68: Percentage of Smartphone Users who Download Mobile Apps – India (June 2011) ........ 81 Figure 69: Top 5 Mobile Application Types – India (June 2011) ........................................................ 82 Figure 70: Paid vs. Free Apps Download Behaviour – India Smartphone Users (In Percent, June 2011) ................................................................................................................................ 82 Figure 71: Factors deterring Mobile App Users from Downloading Paid Mobile Apps – India (June 2011) ................................................................................................................................ 84 Figure 72: How do Mobile Application Users Discover New Apps – India (June 2011) ..................... 84 Figure 73: Break-out of Respondents by Average Monthly Mobile Spend – The US (in Percent, June 2011) ................................................................................................................................ 88 Figure 74: Break-out of Voice vs. Non-voice Mobile Spend – The US (In Percent, June 2011) ........ 88 Figure 75: Top 6 Activities on Mobile Phone – The US (June 2011) ................................................. 89 Figure 76: Average Time Spent on Various Activities via Mobile per Day – The US (In Hours, June 2011) ................................................................................................................................ 90 Figure 77: Categories of Smartphone owned – The US (In Percent, June 2011) .............................. 91 Figure 78: Drivers contributing to the increase in Mobile Internet access – The US (June 2011) ...... 91 Figure 79: Break-out of Mobile Data Plan Types – The US (In Percent, June 2011) ......................... 92 Figure 80: Break-out of Network Access preferred for Heavy File Downloads – The US (In Percent, June 2011) ........................................................................................................................ 93 Figure 81: Percentage of Smartphone Users who Download Mobile Apps – The US (June 2011) ... 94 Figure 82: Top 5 Mobile Application Types – The US (June 2011).................................................... 94 Figure 83: Paid vs. Free Apps Download Behaviour – US Smartphone Users (In Percent, June 2011) ..................................................................................................................................... 95 Figure 84: Factors deterring Mobile App Users from Downloading Paid Mobile Apps – The US (June 2011) ................................................................................................................................ 96 Figure 85: How do Mobile Application Users Discover New Apps – The US (June 2011) ................. 96 Figure 86: Break-out of Respondents by Average Monthly Mobile Spend – Chile (In Percent, June 2011) .............................................................................................................................. 100 Figure 87: Break-out of Voice vs. Non-voice Mobile Spend − Chile (In Percent, June 2011) .......... 100 Figure 88: Top 6 Activities on Mobile Phone – Chile (June 2011) ................................................... 101 6 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Figure 89: Average Time Spent on Various Activities via Mobile per Day – Chile (In Hours, June 2011) .............................................................................................................................. 102 Figure 90: Contribution of factors deterring Smartphone Usage – Chile (In Percent, June 2011) ... 102 Figure 91: Categories of Smartphone owned – Chile (In Percent, June 2011) ................................ 103 Figure 92: Drivers contributing to the increase in Mobile Internet access – Chile (June 2011) ........ 104 Figure 93: Break-out of Mobile Data Plan Types – Chile (In Percent, June 2011) ........................... 104 Figure 94: Break-out of Network Access preferred for Heavy File Downloads – Chile (In Percent, June 2011) ...................................................................................................................... 106 Figure 95: Percentage of Smartphone Users who Download Mobile Apps – Chile (June 2011) ..... 106 Figure 96: Top 5 Mobile Application Types – Chile (June 2011)...................................................... 107 Figure 97: Paid vs. Free Apps Download Behaviour – Chilean Smartphone Users (In Percent, June 2011) .............................................................................................................................. 107 Figure 98: Factors deterring Mobile App Users from Downloading Paid Mobile Apps – Chile (June 2011) .............................................................................................................................. 108 Figure 99: How do Mobile Application Users Discover New Apps – Chile (June 2011) ................... 109 Figure 100: Contribution of factors encouraging Multiple SIM Ownership – The UAE (In Percent, End2010) .............................................................................................................................. 112 Figure 101: Break-out of Respondents by Average Monthly Mobile Spend – The UAE (In Percent, June 2011) ...................................................................................................................... 114 Figure 102: Break-out of Voice vs. Non-voice Mobile Spend – The UAE (In Percent, June 2011) .... 114 Figure 103: Top 6 Activities on Mobile Phone – The UAE (June 2011) ............................................. 115 Figure 104: Average Time Spent on Various Activities via Mobile per Day – The UAE (In Hours, June 2011) .............................................................................................................................. 116 Figure 105: Top 5 Mobile Application Types – The UAE (June 2011) ............................................... 117 Figure 106: Categories of Online Commerce – The UAE (In Percent, End-2010) ............................. 118 Figure 107: Categories of Mobile Websites viewed – The UAE (In Percent, June 2011) .................. 118 Figure 108: Popularity of Social Networking Websites – The UAE (In Percent, End-2010) ............... 119 Figure 109: Device used to access Social Networking Websites – The UAE (In Percent, End-2010)120 Figure 110: Mobile Data Traffic per Month – Regional (In Petabytes, 2008 – 2010) ......................... 123 Figure 111: Non-voice Spend as a Percentage of Total Mobile Spend (In Percent, June 2011) ....... 129 Figure 112: Average Time Spent on Various Activities via Mobile per Day (In Hours, June 2011) .... 131 Figure 113: Average Time spent on Social Networking via Mobile Phone per Day (In Hours, June 2011) .............................................................................................................................. 133 Figure 114: Y-o-y growth of Mobile Data Traffic and Mobile Data Revenue – Worldwide (In Percent, 2009 – 2015F) ................................................................................................................ 134 © 2011, Portio Research. All Rights Reserved 7
  • Mobile Data Usage Trends 2011-2015 List of Tables Table 1: Table 2: Table 3: Table 4: Table 5: Table 6: Table 7: Table 8: Table 9: Table 10: Table 11: Table 12: Table 13: Table 14: Table 15: Table 16: Table 17: Table 18: Table 19: Table 20: Table 21: Table 22: Table 23: Table 24: Table 25: Table 26: Table 27: Table 28: Table 29: Table 30: Table 31: Table 32: Table 33: Table 34: Table 35: Table 36: Table 37: Table 38: Table 39: 8 Mobile Subscribers – Regional (In Million, 2008 – 2015F) ................................................ 17 Mobile Data Traffic per Month – Regional (In Petabytes, 2008 – 2015F) .......................... 36 Mobile Data Revenues – Regional (In USD Billion, 2008 – 2015F)................................... 40 Key Facts – The UK (End-2010) ....................................................................................... 45 Facts on Internet Users – The UK (End-2010) .................................................................. 50 Top 5 Websites accessed through Desktop – The UK (June 2011) .................................. 52 Top 5 Websites accessed through Mobile – The UK (June 2011)..................................... 52 Additional Analysis of Paid and Free Downloads – The UK (In Percent, June 2011) ........ 55 Frequency of Different Activities on a Social Networking Site via Mobile Phone – The UK (In Percent, June 2011) .................................................................................................... 57 Key Facts – China (End-2010).......................................................................................... 59 Facts on Internet Users – China (End-2010) .................................................................... 64 Top 5 Websites accessed through Desktop – China (June 2011) .................................... 67 Top 5 Websites accessed through Mobile – China (June 2011) ....................................... 68 Additional Analysis of Paid and Free Downloads – China (In Percent, June 2011) .......... 70 Frequency of Different Activities on a Social Networking Site via Mobile Phone – China (In Percent, June 2011) ......................................................................................................... 72 Key Facts – India (End-2010) ........................................................................................... 74 Facts on Internet Users – India (End-2010) ...................................................................... 78 Top 5 Websites accessed through Desktop – India (June 2011) ...................................... 80 Top 5 Websites accessed through Mobile – India (June 2011) ........................................ 80 Additional Analysis of Paid and Free Downloads – India (In Percent, June 2011)............ 83 Frequency of Different Activities on a Social Networking Site via Mobile Phone – India (In Percent, June 2011) ......................................................................................................... 85 Key Facts – The US (End-2010) ....................................................................................... 87 Top 5 Websites accessed through Desktop – The US (June 2011) ................................. 92 Top 5 Websites accessed through Mobile – The US (June 2011) .................................... 93 Additional Analysis of Paid and Free Downloads – The US (In Percent, June 2011) ....... 95 Frequency of Different Activities on a Social Networking Site via Mobile Phone – The US (In Percent, June 2011) .................................................................................................... 97 Key Facts – Chile (End-2010) ........................................................................................... 99 Facts on Internet Users − Chile (End-2010) ................................................................... 103 Top 5 Websites accessed through Desktop − Chile (June 2011) ................................... 105 Top 5 Websites accessed through Mobile − Chile (June 2011) ...................................... 105 Additional Analysis of Paid and Free Downloads – Chile (In Percent, June 2011) ......... 108 Frequency of Different Activities on a Social Networking Site via Mobile Phone – Chile (In Percent, June 2011) ....................................................................................................... 110 Key Facts – The UAE (End-2010) .................................................................................. 113 Facts on Internet Users – The UAE (End-2010) ............................................................. 117 Frequency of Different Activities on a Social Networking Site via Mobile Phone – The UAE (In Percent, June 2011) .................................................................................................. 120 Mobile Data Traffic per Month – Regional (In Petabytes, 2011F – 2015F) ..................... 124 Top 5 Mobile Activities in the Surveyed Countries (June 2011) ...................................... 130 Average Time Spent on Various Activities via Mobile per Day (In Hours, June 2011) .... 131 Top 5 Mobile Applications in the Surveyed Countries (June 2011) ................................. 132 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Chapter 1 Introduction © 2011, Portio Research. All Rights Reserved 9
  • Mobile Data Usage Trends 2011-2015 Introduction Mobile phones, which were primarily designed to provide simple voice communication services, have radically evolved into mini-computers over recent years. Now with Internet access and the ability to install software and applications, today‘s mobile phones enable users to perform almost all of the tasks on-the-go which have traditionally been associated with static desktops or laptops. With interactive features and services such as Internet connectivity, social networking, blogs, discussion forums, gaming, music, news, information, navigation, e-commerce, banking, location-based services, audio and video streaming, mobile phones have become a markedly more powerful tool. With the growing dependence on mobile phones, mobile data services have also gained popularity at an unbelievably fast pace, and this huge potential has led many players – including Mobile Network Operators (MNOs) – to target the mobile data services market. Considering that MNOs can no longer solely rely on voice revenue to be successful, they are increasingly focusing on providing innovative content and data services to their subscribers, as a means of counteracting the falling voice Average Revenue per User (ARPU). Mobile data market players – such as MNOs, handset/smartphone manufacturers, application developers, network equipment vendors and billing enablers – are collaborating to develop advanced devices and services, and to provide seamless connectivity to users. The number of mobile data services options saw impressive growth over the past year and is expected to continue to rise exponentially. The increased interest in data content and services can be attributed to the following factors: 1. Success of advanced mobile devices such as smartphones, tablets and netbooks 2. High-speed mobile Internet 3. Reduction in cost per megabyte (MB) of mobile data Success of Advanced Mobile Devices 2010 was a game-changing year in the mobile device space, with smartphone shipments increasing dramatically worldwide in 2010 after experiencing a slump in 2009. Handset vendors are constantly trying to offer new handsets with enhanced features at very competitive prices, and this fierce competition is especially intense in the smartphone segment. Smartphones – with large screen sizes, QWERTY keyboards and high resolution, along with advanced computing capabilities and abundant memory – allow users to download, install and run advanced applications, and offer a superior browsing experience. In 2010, the worldwide smartphone user base recorded staggering year-on-year growth of 55.4 percent to reach 470 million smartphone users. This user base is expected to increase to 1,869.7 million by end-2015, growing at a Compound Annual Growth Rate (CAGR) of 31.8 percent between 2010-2015. In the meantime, worldwide smartphone users are currently projected to total 686.2 million by end-2011. The figure on the next page depicts the worldwide smartphone user base from 2008-2015. 10 © 2011, Portio Research. All Rights Reserved With the growing dependence on mobile phones, mobile data services have also gained popularity at an unbelievably fast pace.
  • Mobile Data Usage Trends 2011-2015 Figure 1: Smartphone User Base – Worldwide (In Million, 2008 – 2015F) 1,869.7 Smartphone User Base (In Million) 2,000 1,800 1,549.0 1,600 1,400 1,235.8 1,200 943.9 1,000 686.2 800 470.0 600 400 237.9 302.4 200 0 2008 2009 2010 2011F 2012F 2013F 2014F 2015F Year Source: Portio Research Ltd. F – Forecasted Device technology continued to improve rapidly throughout 2010 and a spate of interactive and advanced features were made available to users. The mobile data market has also witnessed the relatively recent introduction of tablets – personal mobile computers. In January 2010, Apple unveiled the first look of its iPad tablet which was officially launched in the market in April 2010. It instantaneously created ripples in the mobile device market and since then many device vendors have launched their own tablets. Figure 2: iPad Shipments – Worldwide (In Million, Q2 2010 – Q2 2011) Shipments (In Million) 10 9.2 9 7.3 8 7 6 5 4 4.7 4.2 3.3 3 2 1 0 Q2 2010 Q3 2010 Q4 2010 Q1 2011 Q2 2011 Quarter Source: Portio Research Ltd. Advanced mobile devices, especially smartphones and tablets, have made a lasting impression on users and their potential is indisputable. Adoption of advanced devices has already changed the way companies do business and interact with end users, with companies developing mobile apps and mobile versions of their websites so that users can more easily access their offerings and services on a handheld device. The adoption of mobile applications is rocketing, and app stores such as Apple App Store, Google Android © 2011, Portio Research. All Rights Reserved 11 Device technology continued to improve rapidly throughout 2010 and a spate of interactive and advanced features were made available to users. Advanced mobile devices, especially smartphones and tablets, have made a lasting impression on users and their potential is indisputable.
  • Mobile Data Usage Trends 2011-2015 Market, GetJar, Nokia Ovi Store and BlackBerry App World have already become hotspots for application downloads. Mobile App Downloads (In Billion) Figure 3: App Stores – Number of Mobile Application Downloads to date (Worldwide, In Billion, Early-July 2011) 16 15.0 12 8 6.0 4 2.0 1.5 1.0 Nokia Ovi Store BlackBerry App World 0 Apple App Store Google Android Market GetJar Mobile Application Stores Source: Portio Research Ltd. High-speed mobile Internet The growth of smartphone and tablet shipments has provided the much needed impetus to the uptake of mobile Internet services. With the advent of smartphones and tablets, the power of a handheld device has further increased and the Internet has found its new companion, with mobile Internet usage growing faster than PC Internet. That said, MNOs are still under increasing pressure to offer high-speed Internet to their subscribers at an affordable price. MNOs are adopting strategic approaches, along with infrastructure investments, to provide greater bandwidth to their subscribers, avoid network congestion and generate diversified revenue streams. Mobile Data - Cost per megabyte (MB) continues to drop One of the major drivers of the growth in mobile data usage is the falling cost per megabyte (MB) of mobile data. The worldwide average cost per MB of mobile data has continuously dropped between 2008 and 2010 from USD 0.46 to USD 0.10. The cost is expected to further reduce to USD 0.01 by end-2015. The figure on the next page depicts the cost per MB of mobile data during 2008-2015. 12 © 2011, Portio Research. All Rights Reserved The worldwide average cost per MB of mobile data has continuously dropped between 2008 and 2010 from USD 0.46 to USD 0.10. The cost is expected to further reduce to USD 0.01 by end-2015.
  • Mobile Data Usage Trends 2011-2015 Figure 4: Cost per MB of Mobile Data – Worldwide (In USD, 2008 – 2015F) Cost per MB (In USD) 0.5 0.46 0.4 0.3 0.19 0.2 0.10 0.1 0.06 0.03 0.02 0.01 0.01 2012F 2013F 2014F 2015F 0.0 2008 2009 2010 2011F Year Source: Portio Research Ltd. F – Forecasted With the increasing affordability, the uptake of data services is growing among mobile users in both developed and emerging countries. Also, the consumption of data services has increased significantly among existing data services users. In 2010, the monthly mobile data traffic per smartphone user stood at 149 MB. It is expected to reach 3,390.7 megabytes by end-2015, growing at a CAGR of 45.1 percent between 2010-2015. The figure below highlights the monthly mobile data traffic per smartphone user from 2008 to 2015. Monthly Mobile Data Traffic (In Megabytes) Figure 5: Monthly Mobile Data Traffic per Smartphone User – Worldwide (In Megabytes, 2008 – 2015F) 4,000 3,390.7 3,500 3,000 2,256.1 2,500 2,000 1,519.7 1,500 1,041.5 1,000 500 149.0 323.1 527.9 736.3 0 2008 2009 2010 2011F 2012F 2013F 2014F 2015F Year Source: Portio Research Ltd. F – Forecasted © 2011, Portio Research. All Rights Reserved 13
  • Mobile Data Usage Trends 2011-2015 This study covers the overview of the mobile data services market, current market size in terms of mobile data traffic and revenue, market forecasts for 2011-2015, mobile data usage trends, and various strategies to cope with the ever-growing data traffic on mobile networks. For this report, we conducted a consumer survey to gather the mobile data usage trends among the mobile users of six countries – the UK (Europe), China and India (Asia Pacific), the US (North America), Chile (Latin America) and the UAE (Africa and Middle East). The survey was designed to determine the mobile user preferences and behaviour across geographies. With the results of the survey we have analysed, compared and highlighted the key differences in consumer behavior in the respective markets. We hope that the end result of this exercise creates a ‗Mobile Data Usage Behaviour‘ case study that can help MNOs, application developers and many others in the mobile space to maximise revenues from mobile data services. 14 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Chapter 2 Worldwide Mobile Market © 2011, Portio Research. All Rights Reserved 15
  • Mobile Data Usage Trends 2011-2015 Worldwide Mobile Market The worldwide mobile industry continues to grow at a significant rate. Since inception, this industry‘s prolific growth rate has perpetually amazed all, including experts themselves, and will be strengthened further with the ongoing convergence of services with mobile communications, and initiatives taken by MNOs. At end-2010, worldwide mobile subscribers stood at nearly 5.4 billion. This subscriber base is now projected to grow at a CAGR of 6.8 percent between 2010 and 2015, and is expected to reach nearly 7.5 billion by end-2015. The figure below highlights the growth in worldwide mobile subscriber base during 20082015. Please note that within these new forecasts we have revised our worldwide and regional mobile subscriber base forecasts based on actual, currently-stated subscriber figures for end-2010. Figure 6: Mobile Subscriber Base – Worldwide (In Million, 2008 – 2015F) Mobile Subscriber Base (In Million) 8,000 6,355.1 6,775.2 7,144.8 7,464.2 5,871.0 6,000 5,362.4 4,655.8 4,044.8 4,000 2,000 0 2008 2009 2010 2011F 2012F 2013F 2014F 2015F Year Source: Portio Research Ltd. F – Forecasted Asia Pacific is the largest mobile market worldwide. At end-2010, the region‘s mobile subscriber base stood at over 2.6 billion and is forecast to surpass 3.9 billion by end-2015 – growing at a CAGR of 8.5 percent during 2010-2015. Europe is the second-largest region worldwide in terms of subscribers and was nearing 1.1 billion subscribers at end-2010. The next table highlights regional mobile subscriber levels during 2008-2015. 16 © 2011, Portio Research. All Rights Reserved At end-2010, worldwide mobile subscribers stood at nearly 5.4 billion. This subscriber base is now projected to grow at a CAGR of 6.8 percent between 2010 and 2015, and is expected to reach nearly 7.5 billion by end-2015.
  • Mobile Data Usage Trends 2011-2015 1 Table 1: Mobile Subscribers – Regional (In Million, 2008 – 2015F) Mobile Subscribers (In Million) Region 2008 2009 2010 2011F 2012F 2013F 2014F 2015F Europe 999.7 1,038.3 1,066.4 1,102.6 1,128.5 1,149.4 1,166.2 1,179.8 Asia Pacific 1,733.8 2,132.1 2,605.1 2,913.6 3,219.5 3,484.8 3,716.8 3,914.8 North America 291.9 313.5 343.4 361.4 377.7 392.3 405.4 417.0 Latin America 449.5 494.0 549.2 589.9 624.5 655.1 681.8 705.0 Africa and Middle East 570.1 677.9 798.3 903.5 1,004.9 1,093.7 1,174.6 1,247.6 Total 4,044.8 4,655.8 5,362.4 5,871.0 6,355.1 6,775.2 7,144.8 7,464.2 Source: Portio Research Ltd. The figure below is the graphical representation of Table 1 above. Figure 7: Mobile Subscriber Base – Regional (In Million, 2008 – 2015F) Mobile Subscribers (In Million) 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2008 Europe 2009 Asia Pacific 2010 2011F North America 2012F Latin America 2013F 2014F 2015F Africa and Middle East Source: Portio Research Ltd. F – Forecasted 1 Note: Sum of regional numbers may not equal total due to rounding off errors. © 2011, Portio Research. All Rights Reserved 17
  • Mobile Data Usage Trends 2011-2015 Asia Pacific‘s subscribers constituted 48.6 percent of the worldwide mobile subscriber base in 2010, while the second largest contributor was Europe with 19.9 percent. The figure below depicts regional contribution to the worldwide mobile subscriber base in 2010. Figure 8: Worldwide Subscriber Base – Regional Contribution (In Percent, 2010) 48.6% 6.4% 10.2% 14.9% 19.9% Europe Asia Pacific North America Latin America Africa and Middle East Source: Portio Research Ltd. Between 2010 and 2015, the percentage contribution of the Asia Pacific and Africa and Middle East (AME) regions to the worldwide subscriber base is expected to increase at the expense of the remaining regions, which will see declines during the same period. Asia Pacific will continue to dominate the worldwide mobile market, and in 2015 over 52 percent of worldwide mobile subscribers will originate from this region. The increase in subscriber base share for the Asia Pacific and AME regions can be ascribed to the strong subscriber base growth in the emerging markets. 2 Figure 9: Worldwide Subscriber Base – Regional Contribution (In Percent, 2015F) 52.4% 5.6% 9.4% 16.7% 15.8% Europe Asia Pacific North America Latin America Africa and Middle East Source: Portio Research Ltd. F – Forecasted 2 Note: The percentages do not add up to 100 percent because of rounding off errors. 18 © 2011, Portio Research. All Rights Reserved The increase in subscriber base share for the Asia Pacific and AME regions can be ascribed to the strong subscriber base growth in the emerging markets.
  • Mobile Data Usage Trends 2011-2015 Chapter 3 Mobile Data Services Market © 2011, Portio Research. All Rights Reserved 19
  • Mobile Data Usage Trends 2011-2015 Mobile Data Services Market Mobile data services, including messaging, have added significant value by allowing users to do a lot more on their handsets than just placing and receiving voice calls. Mobile data services have not only extended peer-to-peer (P2P) modes of communication beyond simple core voice communication, but have also expanded mobile communications to include peer-to-application, application-to-peer and application-to-application communications. Data services now provide widespread accessibility from anywhere anytime and offer customised services to meet individual and business needs. Mobile data services now act as the primary catalyst for the revenue growth of Mobile Network Operators (MNOs). The data revenue generated from non-voice services has helped to stabilise the average revenue per user (ARPU) by offsetting the falling voice ARPUs. As voice becomes commoditised, mobile operators need to look at other sources to generate income and this has provided the impetus to formulate and implement strategies to create successful data services that help increase overall data ARPU. Mobile data services have significantly transformed the mobile market from a volume-based business to valuebased business. Mobile operators in both developed and emerging markets are devising strategies around data to increase the data usage among subscribers. MNOs have entered the mobile applications market and are investing in developing innovative apps to catch the subscribers‘ attention. Efforts are being undertaken to improve the user experience and interaction with various data services. MNOs worldwide are investing billions of dollars in upgrading their network speeds to facilitate seamless usage of data services, and marketing efforts are being made to push the uptake of data services. The growing mobile data market also requires complete support from handset and network infrastructure equipment manufacturers. As a general rule, handset vendors are continuously investing in building a vast portfolio of devices catering to the needs of diverse customers. Advanced mobile devices such as smartphones and tablets have fueled the growth of mobile data services, and have increased data traffic to such levels that the existing networks will be unable to support data traffic growth for long. The explosive growth in data traffic requires MNOs to upgrade their existing networks to ensure seamless services to users in the future. Some MNOs have proactively awarded contracts to equipment vendors (such as Nokia Siemens Networks (NSN), Huawei, Ericsson and Alcatel-Lucent) to supply equipment, build and manage next-generation networks such as LTE and HSPA+ in the near future. The data market has huge potential and the coming years look very promising. Evolution of Mobile Data Services Market Mobile data services have evolved from simple SMS to advanced data services. Initially, the mobile data services ecosystem only included SMS, but over the years it has expanded to include numerous services such as MMS, e-mail, instant messaging (IM), mobile commerce, music, games, TV, videos and user-generated content. Today, the market is flooded with hundreds of different types of data services. 20 © 2011, Portio Research. All Rights Reserved Mobile operators in both developed and emerging markets are devising strategies around data to increase the data usage among subscribers.
  • Mobile Data Usage Trends 2011-2015 Figure 10: Evolution of Mobile Data Services Market (1993-2005) First P2P SMS was sent by a Nokia engineer from one mobile handset to another 1993 1997 The ringtone market came into existence. A Finish operator (Radiolinja) launched the first monoringtone service for Nokia handsets. The first ever mobile game (Snake) was released on Nokia 6110 A microbrowser was deployed for the first time on handsets SMS-based mobile commerce was launched 1999 i-mode, the first mobile Internet-based service, was launched in Japan. i-mode introduced mobile e-mail and IM. The first location-based service was launched on a mobile phone 1998 Softbank Mobile Japan (formerly known as J-Phone) launched the first picture messaging system ‗Sha-Mail‘ Mobile ticketing was launched in several countries such as Japan (airline tickets), Norway (parking tickets) and Austria (train ticketing). The first smartphone (Ericsson R380s) to use an open operating system (Symbian) was launched 2000 SK Telecom introduced Caller Ringback Tones 2002 2001 2004 South Korea became the first country to have mobile TV Worldwide annual SMS traffic volumes crossed one trillion Japan‘s largest operator, NTT DOCOMO, launched the first 3G network NTT DOCOMO launched the first ever application store (i-Appli) for i-mode mobile phones AT&T launched the first ever mobile music store (mMode) in the US. It allowed users to search, listen and purchase music tracks via the handset. 2005 Source: Portio Research Ltd. © 2011, Portio Research. All Rights Reserved 21
  • Mobile Data Usage Trends 2011-2015 Figure 11: Evolution of Mobile Data Services Market (2006-2011) VOIP services were made available on mobile phones Japanese operator NTT DOCOMO launched DCMX, a credit payment service. It allows handsets to be used as credit cards and make purchases through DOCOMO‘s iD. 2006 2007 2009 Apple and Google launched their respective app stores: Apple App Store and Google Android Market. Layar launched the first augmented reality app store The worldwide mobile subscriber base crossed five billion Apple launched iPad Facebook crossed 150 million mobile subscribers YouTube crossed the milestone of 150 million views per day via mobile phone Apple launched iPhone The mobile versions of Facebook, Twitter and YouTube websites were launched during the year Facebook also launched its mobile application in the same year The first mobile augmented reality browser, Layar, was launched RIM, Nokia and Microsoft introduced their app stores First commercial LTE network was launched Apple launched iPhone OS 3 with MMS capabilities 2011 YouTube and LG partnered to enable users to take and share 3D videos via mobile Social networking giant Facebook integrated video chats with social networking 2008 2010 In addition to the examples explicitly mentioned in the preceding figures, there are numerous other services which have been added to the mobile data space over the years. Typically, once such services are established, market players make efforts to bring the updated versions to market or to re-invent the services. The mobile data services market has witnessed some very innovative moves from various market players. For example, mobile commerce has evolved from a simple SMS-based service to customised location-based services. SMS-based mobile commerce was launched in 1997 when the first mobile phone-enabled Coca Cola vending machines were installed in Helsinki, Finland. In 1999, i-mode made mobile commerce possible through the Internet on a handheld device. Since then, many services/applications – such as contactless payments, mobile credit card services and micro-payments – have been developed for ease of use. In recent years, mobile commerce has been integrated with location-based services. Now users receive local discount coupons and vouchers depending on their location. Source: Portio Research Ltd. 22 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 While the history of data services can be traced back to 1993 when the first SMS was exchanged between two mobile devices3, the hype surrounding data didn‘t fully emerge for another six years. In 1999, Japanese MNO NTT DOCOMO launched i-mode services in the country. Several data services already existed in the market but it was i-mode that changed the landscape of the mobile data services market. i-mode offered incomparable services to users and thus introduced new growth avenues for MNOs. i-mode was an instant hit among subscribers, as evidenced by its dramatic growth to one million subscriptions within six months of launch. Figure 12: i-mode Services – Number of Subscriptions (Japan, In Million) 47 48 Nov-08 45 48 Nov-06 Number of Subscriptions (In Million) 60 50 40 35 36 24 30 i-mode Launched 20 10 12 5 1 May-11 Aug-05 Oct-03 Oct-02 Dec-01 Mar-01 Aug-00 Mar-00 Aug-99 Feb-99 0 Period Source: NTT DOCOMO i-mode‘s phenomenal success prompted competitors to enter the data services market and introduce very similar services. In April 1999, KDDI launched EzWeb, and Softbank Mobile (then J-Phone) launched J-Sky in December 1999. Today, every MNO worldwide is trying to make the most out of the lucrative data services market. 3 Note: The first SMS was sent on the Vodafone UK network from a PC to a mobile handset in December 1992, but the first P2P (Peer-To-Peer) SMS, from one mobile handset to another, was sent by a Nokia engineer in Finland in 1993. © 2011, Portio Research. All Rights Reserved 23 In 1999, Japanese MNO NTT DOCOMO launched i-mode services in the country. Several data services already existed in the market but it was i-mode that changed the landscape of the mobile data services market.
  • Mobile Data Usage Trends 2011-2015 Types of Mobile Data Services Messaging services  Short Messaging Service (SMS)  Multimedia Messaging Service (MMS)  Mobile E-mail  Mobile Instant Messaging (IM) Non-messaging mobile services  Mobile music  Mobile games  Mobile TV  Mobile video  Mobile user-generated content  Mobile commerce  Mobile portals Mobile Applications  Games  Productivity (including location-based services)  Multimedia  Communication (including social networking)  Travel  Utilities 24 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Figure 13: Type of Mobile Data Services Messaging Services Short Messaging Service (SMS): As expressed in the fifth edition of our messaging report ‗Mobile Messaging Futures 2011-2015‘, SMS is the single most successful mobile data service in the world, both in terms of traffic and revenue. Even as the whole world moves towards other data services at an accelerated pace, SMS still enjoys the largest market share and is the clear market leader. Multimedia Messaging Service (MMS): MMS did not achieve the meteoric growth seen by SMS, but it still stands strong as the second most successful messaging service worldwide Mobile E-mail: Subscribers can access mobile e-mail through three modes: Web e-mail, pull e-mail, and push e-mail by enabling Internet access on their handsets Mobile IM: Mobile IM is divided into two categories – real-time session-based services and SMS-centric transaction based-services Non-Messaging Mobile Services Mobile Music: Includes ringtones, caller ringback tones and streaming audios Mobile Games: Includes embedded games, SMS games and browser-based games Mobile TV: MNOs are offering services such as full-length live and on-demand episodes to their TV users Mobile Videos: Includes streaming videos and video calling. With 200 million views per day, YouTube has emerged as the clear winner in the mobile videos category. Mobile User Generated Content: Includes social networking, blogging, professional networking, forums, review-websites, and information/knowledge sharing platforms. Social networking sites have seen phenomenal growth in the last couple of years, and Facebook in particular has emerged as a leader in the social networking space. Mobile Commerce: Mobile commerce includes mobile banking, ticketing, coupons, loyalty cards, vouchers and mobile purchases Mobile Portals: A mobile portal is a website which has been customised for mobile web browsing Mobile Applications With the widespread adoption of smartphones and high-speed Internet, mobile applications have gained massive popularity among mobile users. Apple App Store alone has witnessed 15 billion app downloads as of early-July 2011. Mobile apps have emerged as a separate category in mobile data services. Mobile applications are functionalities provided to users by software that performs specific tasks. These applications now come pre-installed on handsets, or can be downloaded by users and installed on their handsets. Mobile applications include: Downloadable games Productivity apps including location-based services, word processor and directory services Multimedia apps including audio/video player, radio, image and presentation viewer Communication apps including social networking, mobile VoIP, e-mail and IM clients Travel apps including GPS/Maps, currency converter, city guide and flight/train tracking Utilities apps including news, weather, profile manager, task manager and antivirus Source: Portio Research Ltd. © 2011, Portio Research. All Rights Reserved 25
  • Mobile Data Usage Trends 2011-2015 Growth of Data Services Market The mobile data services market has grown exponentially since its inception in 1993. The market potential can be gauged from the fact that thousands of mobile apps are being developed, millions of videos are being uploaded, billions of SMS are being exchanged and billions of pictures are being uploaded via mobile devices every day. The present data services market presents great opportunity for all of its stakeholders. The primary factors driving the growth of the mobile data services market are the convergence of mobile and Internet, high-speed data networks, affordable tariff plans and the growing popularity of advanced mobile devices such as smartphones and tablets. In addition, easily accessible distribution channels and disruptive technologies (such as cloud computing) are providing the much needed impetus to the mobile data services market. The growth of the data services market is also dependent on a number of regional factors such as spending power of the population, mobile penetration, percentage of youth 4 population, desktop penetration , data consumption patterns of mobile users, MNOs‘ efforts (data services offered, pricing strategies, deployed technology and infrastructure investment plans) and availability of alternative options. For example, many countries in Africa still do not have proper banking infrastructure in place and the desktop penetration is also very low. Thus, they rely on their mobile phones for financial services. Convergence of Mobile and Internet Mobile and Internet existed as two separate worlds in the past. However, with the introduction of smartphones, the two have converged with each other, and high-speed networks, along with affordable data plans, have accelerated this convergence. With the ‗onthe-move‘ image that defines mobile telephony, convergence of mobile and Internet is the perfect bundle for users and mobile operators. It can be seen as a win-win scenario, with MNOs relying on and hence promoting data usage to compensate for their falling voice ARPUs, and subscribers utilising high speed Internet with plenty of choices in terms of available offers. The result is high-speed mobile Internet access that is available to the subscriber 24/7, which has led to an increase in mobile data usage with time. The convergence of mobile and Internet has unearthed an interesting phenomenon in terms of the radical shift from Internet being a need-plus-knowledge tool to a need-plusentertainment tool. In addition to voice and SMS, mobile phones are being used for several activities such as e-mail, IM, social networking, uploading photos and videos, audio and video streaming, and banking. The convergence of mobile and Internet offers great opportunity to MNOs in terms of both data usage and data revenue. MNOs have also been able to tap the business segment. Convergence has enabled them to provide business solutions catering to diverse corporate needs. Mobile Internet, along with innovative and compelling data services, has helped businesses improve efficiency and productivity by ensuring connectivity from anywhere, anytime. Role of Smartphones in the Uptake of Mobile Data Services Smartphones have played a big role in increasing mobile data usage. With declining technology costs and increasing features, they have significantly dented the feature phone market. The major factor is that smartphones are powered by advanced processors, whose processing speeds are catching up with those of computer processors. Consequently, they are increasingly making computers redundant. The increasing pace of smartphone adoption 4 Note: Desktop penetration refers to the number of desktops (PCs) as a percentage of the total population of the region. 26 © 2011, Portio Research. All Rights Reserved The primary factors driving the growth of the mobile data services market are the convergence of mobile and Internet, high-speed data networks, affordable tariff plans and the growing popularity of advanced mobile devices such as smartphones and tablets.
  • Mobile Data Usage Trends 2011-2015 has proved that the major deterrent was price. Handset manufacturers and operators are now increasingly introducing smartphones in the lower price segment as well. For the perfect user experience, synergy between the hardware and software is absolutely essential. The fact that the pace of hardware evolution has matched and even overtaken that of software technology within the mobile space is the biggest benefit to the end user. Smartphones now come equipped with enhanced features. With a host of connectivity options such as Wi-Fi, and countless apps available in the market, users always have something to look forward to. High data usage comes across as an obvious consequence. Tablets Catalysing the Growth of Data Services Every year, hardware technology improves and innovative devices are launched in the market, perpetually tempting users to upgrade their devices. Tablets, aptly referred to as portable personal computers, are the latest example of this. They have bridged the gap between smartphone and PC, and have unlocked new functionalities along with performance improvements. They ensure that users can stay connected at high-speeds all the time, even when they are on the move. Tablets allow users to connect with content, apps and the Internet in a more interactive and entertaining manner than ever before. Users can browse the web, manage their e-mails, stream audio and videos, watch TV, play games and locate their friends by making use of their tablet‘s personal and intuitive user interface. Apple is known to spur the growth of mobile data services by engaging users with their compelling devices, and the introduction of the iPad tablet proved it again. iPad became an instant hit among users. Within a month of its launch in April 2010, Apple was able to sell one million iPads. Features such as multi-touch user interface, larger screen size and highquality graphics keep users engaged with the device. iPad users downloaded 3.5 million apps and 600,000 iBooks within 5 days of its launch. High-Speed Data Networks The deployment of 3G and above networks provided a boost to mobile data services as this has enabled higher network speeds. MNOs have made efforts to tap this opportunity by investing in network upgrades and capacity expansion of mobile networks. As the number of smartphone users grows and data plans become more affordable, mobile data traffic is set to rise. To capitalise on the growing demand of data services, MNOs have to further upgrade their networks – both in terms of capacity and quality. This will further push the uptake of data services among subscribers. Compelling and Innovative Data Services Advanced mobile devices and networks alone are not enough to push the uptake of data services beyond a certain point. Users are tempted to explore data services if compelling and innovative content and applications are made available at their disposal. Content and applications add a dimension of multi-functionality to handsets. Market players – such as MNOs, app developers, content (such as music, videos, photos, themes, jokes and news) providers, app store/website owners and mobile API developers – are collaborating with each other to make the most of the opportunity provided by the growing demand for data services. These players are making efforts to constantly upgrade the content and develop numerous applications for users. © 2011, Portio Research. All Rights Reserved 27 Advanced mobile devices and networks alone are not enough to push the uptake of data services beyond a certain point. Users are tempted to explore data services if compelling and innovative content and applications are made available at their disposal.
  • Mobile Data Usage Trends 2011-2015 Number of Available Applications Figure 14: App Stores – Number of Available Applications (June 2011) 450,000 425,000 400,000 350,000 273,000 + 300,000 250,000 200,000 150,000 150,000 83,500+ 100,000 70,000 36,306 25,000+ BlackBerry App World 50,000 Windows Phone 7 Marketplace 0 Apple App Store Google Android Market GetJar Nokia Ovi Store China Mobile Market Mobile Application Stores Source: Portio Research Ltd. MNOs have themselves entered into the mobile apps market to increase revenue. With market players – especially MNOs – devising their strategies around data services and subscribers increasing their data usage, the future of mobile data usage certainly appears bright. Factors that make a Data Service Successful The worldwide mobile data market cannot be generalised. Each market is unique and a service that is successful in one market may not necessarily do well in another. There are various factors that make a mobile data service successful. Figure 15: Factors Behind a Successful Data Service Expand Perceived Value Continuing Upgrades Creating the right Business Model Factors Behind a Successful Data Service Minimise 'Clicks to Access' Choosing the Right Data Service Launch Timing Source: Portio Research Ltd. 28 © 2011, Portio Research. All Rights Reserved Each market is unique and a service that is successful in one market may not necessarily do well in another. There are various factors that make a mobile data service successful.
  • Mobile Data Usage Trends 2011-2015 Expand Perceived Value It is important to implement a service that adds value to subscribers, rather than being just an addition/upgrade to the existing array of services. Furthermore, it is equally important to price the service while keeping in mind the target audience. The service price is a combination of the following factors: understanding the target audience and their preferences, the value that the new service will deliver to the audience, and a cost that falls within the spending power of the target audience. Striking the right balance between these factors can make a new data service successful. A good example of delivering value to subscribers is Airtel India‘s service of accessing Facebook through USSD services. In May 2011, Airtel introduced a new service which allowed its users to access Facebook without subscribing to any mobile data plan. Users can update their Facebook status free of cost. In addition to status updates, users can also view news feeds, comment on or like news feed stories, post on friends‘ walls, confirm friend requests, view notifications, and find and add friends by paying INR 1 (USD 0.022) per day. 5 Minimise ‘Clicks to Access’ For mass adoption of a data service, the operator should ensure that the usability of such a service is simple and the service is easy to access. Subscribers may lose interest if they have to go through several links/buttons to access the service. Though it is understandable that not all services can be provided at the single click of a button, the operator should ensure that the portal that hosts the data service is accessible and easy to use. 3 Italia launched new handsets in conjunction with the launch of its mobile TV services. These handsets came with a TV button that gave subscribers easy access to mobile TV. Choosing the Right Data Service An operator should not only understand the subscriber‘s need for a data service, but should also understand the resources required to implement such a service. Each data service requires a different degree of resources; an operator should keep a watchful eye over the feasibility of introducing a service, ease of upgrading it, and the capital and manpower required. Launch Timing Correctly planning the right time to launch a data service plays a very important part in helping subscribers to easily relate to the service. Among the notable success stories highlighting the importance of effective launch timing is NTT DOCOMO‘s launch of mobile e-mail services in Japan – wherein it was recognised that Japanese subscribers were then more inclined to write lengthy messages, as opposed to the general trend of sending SMS. Similarly, 3 Italia launched its mobile TV services during the 2006 football World Cup (which Italy went on to win). These two services garnered success with increased user base for the services, and subsequently increased data ARPU. Creating the Right Business Model For a data service to be a commercial success, an appropriate business model must be identified. Even if a data service achieves high adoption rates, the operator may not gain the maximum benefit if the business model is not right. As data services involve other players in 5 Source: http://www.airtel.in/wps/wcm/connect/About%20Bharti%20Airtel/bharti+airtel/media+centre/bharti+airtel+news/mobil e/pg-first-ussd-based-facebook-access-service-in-india © 2011, Portio Research. All Rights Reserved 29
  • Mobile Data Usage Trends 2011-2015 the value chain, it is important for the operator to have control over this value chain to garner success from the services. NTT DOCOMO‘s DCMX (Mobile Credit Card) service was lauded for its successful business model. NTT DOCOMO acquired a stake in Sumitomo Mitsui Cards, a company with experience in delivering credit card services. This partnership was crucial for creating a successful business model for the DCMX data service. Continuing Upgrades The success of a data service is quickly outlived by new innovative services; its lifecycle is short due to the high number of innovations in the mobile industry. Hence, operators should offer regular upgrades to the portfolio of services provided. The progression from monophonic ringtones to polyphonic ringtones to caller ring back tones, and finally, to full track music downloads demonstrates the importance of upgrades within existing services. Monetising the Mobile Data Services Business MNOs are experimenting with different tariff plans to monetise the mobile data services market. Initially, MNOs offered unlimited data plans to their subscribers to push the uptake of data services but did not realise the fact that unlimited data plans would be unsustainable in the long term. Smartphones drove the level of use to such heights that it led to increasing network congestion, as the AT&T case study below attests. AT&T – A Lesson to be Learnt The US-based operator AT&T represents one of the major examples of a network straining under an unlimited data plan and intensive smartphone use. AT&T introduced unlimited data plans for USD 30 per month for all its smartphone users, including Apple‘s iPhone customers. Within a few days, the data usage skyrocketed among smartphone users, especially those using iPhones. iPhone users were using the majority of the network capacity, resulting in less available bandwidth for other smartphone users, who were actually experiencing poor network performance. AT&T‘s other subscribers were facing problems such as dropped calls, delayed text and voice messages and sluggish download speeds. AT&T‘s network was not ready for such a data use explosion and could not cope with the increased demands of bandwidth-hungry users. The situation degenerated further as the number of iPhones being used on the operator‘s network grew. In December 2009, the chief executive officer of AT&T Mobility and Consumer Markets - Ralph de la Vega - indicated that 3 percent of AT&T‘s smartphone users accounted for approximately 40 percent of the network capacity. He also indicated that high-bandwidth consuming activities included video and audio streaming. Several applications on the iPhone provide nonstop Internet radio (and were responsible for increasing data use). AT&T‘s painful experience is a priceless lesson. A very small percentage of AT&T‘s smartphone users clogged the company‘s entire network. In June 2010, AT&T shifted away from unlimited data plans and implemented a tiered pricing model. However, there has been no noticeable negative impact on demand for data services since tiered pricing was instituted in June 2010. 30 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Upgrading existing networks appears to be the most obvious solution to network congestion problems. However, given the fact that MNOs are already finding it difficult to recover the investments made in upgrading to 3G networks, and LTE deployments are still in the early stages, a network upgrade may not be a feasible option. One of the most effective ways to limit the data usage is to explore different pricing strategies. MNOs are now implementing tiered pricing in which multiple price points are offered to subscribers. Operators charge a premium for faster network speeds, higher data consumption, data usage during peak hours and for accessing websites/applications which generate very high data traffic. The various tiered pricing options which are being explored by MNOs worldwide include: Usage-based Tariff Plan: Verizon Wireless (US) has adopted usage-based tiered pricing for its feature phone customers. Feature phone customers can either opt for pay-per-use or can opt for a package worth USD 10 with an allowed limit of 75 MB. Speed Tiered Data Pricing: AT&T (US) intends to impose differential pricing based on speed tiers. AT&T‘s LTE users will pay more for faster speed access. Moreover, users with slower speeds can pay a fee to temporarily boost their network speeds. Subscription Package: KPN (Netherlands) offers a data subscription package similar to TV packages. It charges a separate fee for using Voice over Internet Protocol (VoIP) services such as Skype, streaming video and instant messaging applications. Pay-per-Site: Tata DOCOMO (India) introduced a pay-per-site tariff plan under which users just have to pay for the websites they want to browse. For example, if a user only accesses Facebook and YouTube on their mobile phone, they are required to pay monthly charges for only two websites. Peak and off-peak Hours: Users will be charged more for accessing mobile data during the peak hours of the day. Conversely, users will be offered incentives for using data services during off-peak hours. At present, MNOs are only charging subscribers for Internet access. Service providers that provide the content to subscribers are not incurring any cost for data delivery. To develop a win-win situation for both themselves and users, MNOs such as Vodafone, France Telecom, Telefonica and Telecom Italia are now suggesting a business model under which the service providers will also be charged for data delivery. In addition, this business model will also include smartphone vendors such as Apple and Android-based device manufacturers. MNOs want the content providers and smartphone vendors to contribute towards the cost of maintaining and improving networks. “Service providers are flooding networks with no incentive [to limit bandwidth]. It‟s necessary to put in place a system of payments by service providers as a function of their use”. Stephane Richard CEO, France Telecom “Companies such as Google and Yahoo! used our company‟s networks for free, which is good news for them and a tragedy for us”. Cesar Alierta CEO, Telefonica © 2011, Portio Research. All Rights Reserved 31 MNOs are now implementing tiered pricing in which multiple price points are offered to subscribers.
  • Mobile Data Usage Trends 2011-2015 Drivers and Inhibitors Drivers Figure 16: Drivers of Mobile Data Services Arrival of High-Speed Networks Arrival of high-speed networks such as 3G, HSPA and LTE has bolstered the growth of mobile data services. The high data traffic rate and better Quality of Service (QoS) provided by these advanced networks deliver a high quality experience to data services users. Arrival of High-Speed Internet Services Adoption of Smartphones Smartphones underpin the mobile data services market. These devices, packaged with affordable mobile data plans, are facilitating the uptake of mobile data services. Tablets further Catalysing the Growth In addition to smartphones, tablets will further boost the uptake of mobile data services Proliferation of Mobile Broadband With the increasing uptake of mobile broadband, consumers are fast adopting new content services and applications Cloud Computing Its benefits – such as an ability to handle unpredictable increased data traffic, centralisation of infrastructure and efficiency improvements – have encouraged more and more companies to adopt cloud computing. Cloud computing has facilitated the continuity of business through smartphones and thus has increased the mobile data usage among business users. Innovative and Compelling Data Services The emergence of sophisticated device-level and network-level APIs has led to the introduction of more elaborate and compelling data services Increasing Utility With increasing awareness, consumers are appreciating mobile data services utility in everyday activities – not just entertainment Services such as mobile banking, ticketing, videos and navigation are attracting the attention of millions of users, as these services support the realities of daily life Source: Portio Research Ltd. 32 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Inhibitors Figure 17: Inhibitors of Mobile Data Services Pace of Network Enhancements unable to keep up with the Increasing Consumption Patterns of Users After the arrival of smartphones, data traffic experienced an exponential growth leading to network congestion, especially in high-usage countries. The number of smartphones is set to increase in the coming years, putting pressure on MNOs to have robust networks in place to support the growing demands of users. “Mobile operators have been investing billions to upgrade and improve the capacity and performance of their networks, but in some high-usage cities, such as San Francisco, New York and London, we are still seeing users frustrated by chronic problems of network unavailability”. Hamadoun Touré Secretary General, ITU Revenue Growth slower than Data Traffic Growth Mobile data revenue is not growing at the same pace as mobile data traffic, primarily because of the unlimited data plans. In order to increase revenue opportunities and maximise profits, MNOs need to provide greater bandwidth to their users. However, network upgrades require huge investments which are a big challenge for MNOs in the present scenario. MNOs are already struggling to make profits against the investments made in building 3G and above network capacity. Privacy Users are not comfortable with device manufacturers and app vendors etc. collecting information from their devices without their knowledge Advertisers track users‘ locations using location-based services. Users should have a choice to opt-in or opt-out of targeted advertisements. Security Some mobile apps and websites pave the way for viruses to attack user‘s information Due to the staggering growth of mobile data traffic, mobile networks have become a potential platform for the hacker community Users‘ aversion to provide credit card and bank account details while using websites and applications on their mobile phone inhibits the growth of mobile commerce Lack of Usage Tracking Mechanism MNOs have introduced tiered pricing but there are no mechanisms for users to track their monthly mobile data usage. At the end of the month, users will know what data services they have used but they will have no idea about how much data traffic was generated by those services. Also, users find it challenging to estimate the data consumed by any data service in a minute or an hour. This leads to frustration among data services users. Unaffordable Smartphones and Data plans In emerging markets, smartphones and mobile data plans are still out of reach for many users Source: Portio Research Ltd. © 2011, Portio Research. All Rights Reserved 33
  • Mobile Data Usage Trends 2011-2015 Chapter 4 Market Size 34 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Market Size Forecast Methodology In this report, mobile data traffic is defined as the data traffic generated from mobile devices. Our mobile data traffic forecast for 2011-2015 essentially depends on the following three factors: 1. Percentage of the mobile subscriber base using mobile devices capable of intensive data consumption 2. Minimum data speeds available in the respective region 3. Average number of hours of data usage per day Various other factors – such as adoption of smartphones and tablets, affordability of smartphones, deployed technologies, pricing models, planned infrastructure investments and enthusiasm to try new services – affect the uptake of mobile data services. That said, these aforementioned factors were taken into consideration while estimating the percentage share of mobile devices of the total population of the region, minimum data speeds to be available in the region, average number of hours of data usage per day in the coming five years. Also, data points – such as spending power of the population, desktop penetration, youth population (age group 15-39) – were collected for all five regions to understand the overall state of the market. In this section, we have provided the forecasts for the mobile data services market in terms of mobile data traffic and mobile revenue from 2011 to 2015. Market Size Mobile Data Traffic The mobile data services market has recorded staggering growth in recent years in terms of data traffic, primarily due to the widespread adoption of smartphones and tablets. Highspeed data networks, affordable data plans and easy availability of compelling data services have also helped boost data traffic. Worldwide mobile data traffic stood at 231.1 Petabytes per month at end-2010. With the growing number of web-enabled mobile devices, cloud computing, alternate access networks such as Wi-Fi, and MNOs making huge infrastructural investments to improve the quality of networks, mobile data traffic is expected to grow at a Compound Annual Growth Rate (CAGR) of 91.2 percent between 2010 and 2015 to reach 5,904.1 Petabytes per month by end-2015. The figure on the next page depicts the monthly mobile data traffic from 2008 to 2015. © 2011, Portio Research. All Rights Reserved 35 With the growing number of web-enabled mobile devices, cloud computing, alternate access networks such as WiFi, and MNOs making huge infrastructural investments to improve the quality of networks, mobile data traffic is expected to grow at a Compound Annual Growth Rate (CAGR) of 91.2 percent between 2010 and 2015.
  • Mobile Data Usage Trends 2011-2015 Figure 18: Mobile Data Traffic per Month – Worldwide (In Petabytes, 2008 – 2015F) 5,904.1 Mobile Data Traffic (In Petabytes) 6,000 5,000 4,000 3,254.6 3,000 1,749.2 2,000 915.6 1,000 33.0 91.0 231.1 2008 2009 2010 470.6 0 2011F 2012F 2013F 2014F 2015F Year Source: Portio Research Ltd. F – Forecasted The table below highlights the growth in regional mobile data traffic from 2008 to 2015. Table 2: 6 Mobile Data Traffic per Month – Regional (In Petabytes, 2008 – 2015F) Mobile Data Traffic per Month (In Petabytes) Region 2008 2009 2010 2011F 2012F 2013F 2014F 2015F Europe 11.0 32.0 73.0 157.9 308.0 589.5 1,098.3 1,994.0 Asia Pacific 13.0 35.0 92.9 187.8 368.4 708.8 1,327.1 2,420.6 North America 6.0 17.0 47.8 91.4 176.5 334.9 619.3 1,117.2 Latin America 1.0 4.0 11.4 20.6 38.6 71.5 129.4 229.2 Africa and Middle East 2.0 3.0 6.0 12.9 24.1 44.5 80.7 143.2 Total 33.0 91.0 231.1 470.6 915.6 1,749.2 3,254.6 5,904.1 Source: Cisco and Portio Research Ltd. Asia Pacific had the largest regional mobile data traffic in 2010, constituting 40.2 percent of the worldwide mobile data traffic. It was followed by Europe and North America, with 31.6 percent and 20.7 percent shares respectively. The next figure breaks out the worldwide mobile data traffic in 2010 by regions. 6 Note: Sum of regional numbers may not add up to the total due to rounding off errors. 36 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Figure 19: Worldwide Mobile Data Traffic – Regional Contribution (In Percent, 2010) 40.2% 20.7% 31.6% Europe Asia Pacific 2.6% North America 4.9% Latin America Africa and Middle East Source: Portio Research Ltd. The figure below shows the projected contribution of the five regions to the worldwide mobile data traffic in 2011. Figure 20: Worldwide Mobile Data Traffic – Regional Contribution (In Percent, 2011F) 39.9% 19.4% 33.6% Europe Asia Pacific 2.7% North America 4.4% Latin America Africa and Middle East Source: Portio Research Ltd. The ranks of regions in 2011 and 2015, in terms of contributions to worldwide mobile data traffic, are expected to be the same as in 2010. Asia Pacific will continue its dominance over the next five years to 2015. Asia Pacific‘s huge subscriber base translates into a vast user base of web-enabled mobile devices. This is why the region contributes the most to the total mobile data traffic. The region will generate 41 percent of worldwide mobile data traffic at end-2015, followed by Europe with 33.8 percent. © 2011, Portio Research. All Rights Reserved 37
  • Mobile Data Usage Trends 2011-2015 The figure below highlights the regional share of worldwide mobile data traffic in 2015. Figure 21: Worldwide Mobile Data Traffic – Regional Contribution (In Percent, 2015F) 41.0% 18.9% 33.8% Europe Asia Pacific 2.4% North America 3.9% Latin America Africa and Middle East Source: Portio Research Ltd. F – Forecasted Worldwide mobile data traffic is forecast to grow at a CAGR of 91.2 percent between 2010 and 2015. Europe is expected to witness the highest percentage growth, due to the increased installed base of advanced devices and networks, and the growing online culture of sharing multimedia content including photos and videos. High growth is anticipated in all regions, as most markets aren‘t expected to saturate in the next five years. The figure below shows the regional CAGR for mobile data traffic growth in the period 20102015. Figure 22: Mobile Data Traffic Growth by Region (In Percent, 2010 – 2015F) CAGR Worldwide = 91.2 % 100 CAGR (In Percent) 93.8 CAGR 91.2% 91.9 88.6 87.8 90 82.2 80 70 60 50 Europe Asia Pacific North America Latin America Africa and Middle East Region Source: Portio Research Ltd. F – Forecasted 38 © 2011, Portio Research. All Rights Reserved High mobile data traffic growth is anticipated in all regions, as most markets aren‟t expected to saturate in the next five years.
  • Mobile Data Usage Trends 2011-2015 Mobile Data Revenue With the emergence of mobile data services, a valuable new revenue stream has arisen for operators. The growing importance of data services has prompted MNOs to design strategies to maximise the revenue-earning potential of these services. However, as noted earlier, mobile data revenue is not growing as fast as mobile data traffic. Worldwide mobile data revenue stood at USD 290.3 billion in 2010 and is expected to grow at a CAGR of 13.2 percent between 2010 and 2015 to reach USD 539.9 billion at end-2015. Mobile data revenue is not only experiencing a comparatively lower CAGR but the year-on-year growth rate is also expected to decline over the next five years. Flat-rate data plans have definitely been instrumental in driving the demand for mobile data services, however they have ultimately resulted in lower revenue for MNOs. Thus, MNOs have now started devising effective pricing strategies to boost their data revenue and regulate the network usage for the sustainable growth of mobile data services. The figure below depicts worldwide mobile data revenue from 2008 to 2015. Figure 23: Mobile Data Revenue – Worldwide (In USD Billion, 2008 – 2015F) 600 539.9 498.7 Revenue (In USD BIllion) 500 445.2 395.1 400 343.1 290.3 300 194.8 219.5 200 100 0 2008 2009 2010 2011F 2012F 2013F 2014F 2015F Year Source: Portio Research Ltd. F – Forecasted The table on the next page highlights the growth in regional mobile data revenue from 2008 to 2015. © 2011, Portio Research. All Rights Reserved 39 Mobile data revenue is not only experiencing a comparatively lower CAGR than mobile data traffic but the year-on-year growth rate is also expected to decline over the next five years.
  • Mobile Data Usage Trends 2011-2015 Table 3: 7 Mobile Data Revenues – Regional (In USD Billion, 2008 – 2015F) Mobile Data Revenue (In USD Billion) Region 2008 2009 2010 2011F 2012F 2013F 2014F 2015F Europe 56.3 66.0 101.9 118.4 131.2 141.4 152.8 161.4 Asia Pacific 78.9 81.9 97.2 111.5 126.3 140.1 153.2 158.3 North America 40.4 49.3 63.0 76.3 89.7 102.6 115.3 127.1 Latin America 10.2 11.4 13.8 16.3 20.2 24.4 29.5 34.7 Africa and Middle East 9.0 11.0 14.4 20.6 27.7 36.7 47.9 58.4 Total 194.8 219.5 290.3 343.1 395.1 445.2 498.7 539.9 Source: Portio Research Ltd. Europe had the largest regional mobile data revenue in 2010, constituting 35.1 percent of worldwide mobile data revenue, but was closely followed by Asia Pacific with a 33.5 percent share. North America accounted for 21.7 percent, while Africa and Middle East and Latin America respectively contributed 4.9 percent and 4.8 percent. The following figure breaks out the worldwide mobile data revenue in 2010 by regions. Figure 24: Worldwide Mobile Data Revenue – Regional Contribution (In Percent, 2010) 33.5% 21.7% 4.8% 35.1% Europe Asia Pacific 4.9% North America Latin America Africa and Middle East Source: Portio Research Ltd. The figure on the next page shows the expected contribution of the five regions to worldwide mobile data revenue in 2011. The regions‘ rankings, in data revenue terms, are expected to be the same as in 2010. 7 Note: Sum of regional numbers may not add up to the total due to rounding off errors. 40 © 2011, Portio Research. All Rights Reserved Europe had the largest regional mobile data revenue in 2010, constituting 35.1 percent of worldwide mobile data revenue, but was closely followed by Asia Pacific with a 33.5 percent share.
  • Mobile Data Usage Trends 2011-2015 8 Figure 25: Worldwide Mobile Data Revenue – Regional Contribution (In Percent, 2011F) 32.5% 22.2% 4.7% 34.5% Europe 6.0% Asia Pacific North America Latin America Africa and Middle East Source: Portio Research Ltd. F – Forecasted In 2015, Europe and Asia Pacific are expected be the top contributors to worldwide mobile data revenue, amassing 29.9 percent and 29.3 percent respectively, while North America is forecast to record 23.5 percent. The figure below highlights the regional share of worldwide mobile data revenue in 2015. 9 Figure 26: Worldwide Mobile Data Revenue – Regional Contribution (In Percent, 2015F) 29.3% 23.5% 6.4% 10.8% 29.9% Europe Asia Pacific North America Latin America Africa and Middle East Source: Portio Research Ltd. F – Forecasted Worldwide mobile data revenue is expected to grow at a CAGR of 13.2 percent between 2010-2015. Africa and Middle East and Latin America are expected to have the highest 8, 9 Note: The percentages do not add up to 100 percent because of rounding off errors. © 2011, Portio Research. All Rights Reserved 41
  • Mobile Data Usage Trends 2011-2015 CAGR for mobile data revenue in this period, primarily due to their smaller data revenue bases in 2010. The figure below depicts the regional CAGR for mobile data revenue between 2010-2015. Figure 27: Mobile Data Revenue Growth by Region (In Percent, 2010 – 2015F) CAGR Worldwide = 13.2 % CAGR (In Percent) 35 32.4 30 25 20.2 20 CAGR 13.2% 15.1 15 9.6 10.2 Europe 10 Asia Pacific 5 0 North America Latin America Africa and Middle East Region Source: Portio Research Ltd. F – Forecasted 42 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Chapter 5 Case Studies – Regional Trends © 2011, Portio Research. All Rights Reserved 43
  • Mobile Data Usage Trends 2011-2015 Case Studies – Regional Trends Methodology The aim of this research is to provide invaluable insight on the mobile data usage trends across various geographies worldwide. For the purpose of this report, primary research was conducted to understand and compare the mobile data usage behaviour across the following six countries: 1. The UK (Europe) 2. China (Asia Pacific) 3. India (Asia Pacific) 4. The US (North America) 5. Chile (Latin America) 6. The UAE (Africa and Middle East) The above countries were selected in order to depict the trends in both developing and developed markets. The UK and the US have some of the highest levels of smartphone penetration and mobile broadband adoption, and there have been aggressive efforts by MNOs in these markets to move to high-speed networks to accommodate burgeoning user demand for data services. On the contrary, China and India‘s smartphone penetrations are less than 4 percent, even though they lead in terms of mobile subscriber numbers. Chile has one of the highest ARPU figures among countries in Latin America, and also experienced the highest growth rate in mobile subscriber base between Q1 2010 and Q1 2011. Meanwhile, the UAE has one of the highest mobile penetrations worldwide. A survey questionnaire was designed and circulated to a random sample of mobile phone users, with responses gathered via e-mails, and telephone and face-to-face interviews. The survey was conducted over a one and half month period from June 2011 to mid-July 2011, with a strong response seen from participating countries. As approximately 90 percent of the total responses came in the month of June 2011 itself, the related data points in the following case studies have been reported as June 2011 (rather than July 2011). Our survey findings are presented in the coming pages via respective country profiles. The order of these country profiles (as the above numbered list shows) has been determined by the regions they fall under. Portio Research always presents regional analysis in the same order – Europe, Asia Pacific, North America, Latin America, and Africa and Middle East – and the sequence of the case studies herein is merely a reflection of that consistency. Please also note that while we hope the typical user profiles for each surveyed country prove to be extremely useful to our readers, they are only intended to reflect a typical user within our respondent pool, and how that particular select demographic is currently opting to use their mobile handset – based on our survey findings. 44 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 The UK The UK is one of Europe‘s most advanced mobile markets and has seen massive growth in mobile data usage in the last two years, as well as increased penetration of high-speed mobile broadband networks. Mobile subscriber behaviour here is changing as users move to Internet-enabled mobile handsets and find new and better ways to communicate, search and entertain. This also presents an opportunity for Mobile Network Operators (MNOs) to explore new revenue streams, although MNOs‘ profit margins have been lower in recent years due to the increasing competition amongst themselves. Table 4: Key Facts – The UK (End-2010) Statistics (End-2010) Population (In Million) 62.5 Mobile Subscribers (In Million) 76.2 Mobile Penetration (In Percent) 121.8 Smartphone Penetration (In Percent) 36.4 Mobile Internet Users (In Million) 23.3 Mobile Internet Penetration (In Percent) 30.6 3G Users (In Million) 34.1 SMS Traffic (In Billion) 121.5 MMS Traffic (In Million) 931.2 Facebook Users (In Million) 28.7 Twitter Users (In Million) 10 5.0 Source: Portio Research Ltd. 10 Note: The twitter user base is as of November 2010. © 2011, Portio Research. All Rights Reserved 45 The UK is one of Europe‟s most advanced mobile markets and has seen massive growth in mobile data usage in the last two years.
  • Mobile Data Usage Trends 2011-2015 Monetisation of Mobile Services The UK generates considerably higher ARPU (USD 28-30) than the worldwide average (which lies between USD 13-16), although it has fallen compared to 2009. This impressive ARPU is primarily attributed to the adoption of advanced data services and the availability of better network coverage. The UK market already has a mobile penetration of 121.8 percent and so MNOs are left with the option of promoting their value added services, and hence their data services, to increase revenues. The figure below depicts the break-out of UK respondents by their monthly mobile spend. While 50 percent of surveyed people spend between USD 51 to USD 100 per month on their mobile usage, ten percent of respondents are very intense mobile users which sees them spending over USD 200 on monthly mobile usage. 30 percent of the sample limits their mobile usage to USD 50 or under. Figure 28: Break-out of Respondents by Average Monthly Mobile Spend – The UK (In Percent, June 2011) 50.0% 10.0% 17.5% 10.0% 12.5% Less than USD 20 USD 20-USD 50 USD 51-USD 100 USD 101-USD 200 Greater than USD 200 Source: Portio Research Ltd. The next figure shows the break-out of individual mobile spends by voice and non-voice usage. Non-voice includes messaging (SMS and MMS) and data services. While both UK data usage and data spend are on the increase, voice spend remains ahead, albeit marginally. 46 © 2011, Portio Research. All Rights Reserved The UK market already has a mobile penetration of 121.8 percent and so MNOs are left with the option of promoting their value added services, and hence their data services, to increase revenues.
  • Mobile Data Usage Trends 2011-2015 Figure 29: Break-out of Voice vs. Non-voice Mobile Spend – The UK (In Percent, June 2011) 47.8% 52.2% Voice Non-Voice Source: Portio Research Ltd. © 2011, Portio Research. All Rights Reserved 47
  • Mobile Data Usage Trends 2011-2015 Popular Mobile Activities As per the survey responses, messaging (SMS and MMS) is the most widely used service on UK mobile phones, with 82.5 percent of respondents voting for it. Voice calling follows messaging with 78.8 percent of respondents using it frequently, with e-mail and social networking noted as the third and fourth most popular activities on UK handsets. 11 Figure 30: Top 6 Activities on Mobile Phone – The UK (June 2011) Messaging (SMS and MMS) 82.5 78.8 Voice Calling 63.8 E-mail 53.8 Social Networking 32.5 Gaming Instant Messaging 23.8 0 20 40 60 80 100 Percentage of respondents who selected the given activities among their Top 6 mobile activities Source: Portio Research Ltd. The figure on the next page depicts the average time spent per day on various activities via mobile. 11 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. 48 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Figure 31: Average Time Spent on Various Activities via Mobile per Day – The UK (In Hours, June 2011) Average Time Spent per Day (In Hours) 1.5 1.32 1.14 1.0 0.89 0.64 0.5 0.34 0.15 0.0 Social Networking News and Web Voice Calling Surfing Video Streaming Gaming Messaging (SMS and MMS) Source: Portio Research Ltd. Smartphone Users Smartphone penetration in the UK is approximately 36.4 percent. Although it‘s high, when compared to the worldwide smartphone penetration figure of 8.8 percent, 63.6 percent of mobile subscribers do not own a smartphone in the UK. The common reasons for it are affordability and lack of awareness about smartphone usage. The figure below shows the reasons cited by respondents for not owning a smartphone. Figure 32: Contribution of factors deterring Smartphone Usage – The UK (In Percent, June 12 2011) 50 Contribution of Factors (In Percent) 42.3 40 34.6 30 19.2 20 10 3.8 0 I cannot afford it I don't know what a smartphone is I do not wish to spend so much money on a mobile phone My feature phone has all the required functions Source: Portio Research Ltd. 12 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. © 2011, Portio Research. All Rights Reserved 49
  • Mobile Data Usage Trends 2011-2015 Among surveyed UK smartphone users, iPhone is the favorite device. 52.5 percent of smartphone users own an iPhone with BlackBerry and Android devices following closely with 18 percent and 14.8 percent of respondents possessing these devices. Percentage of respondents Figure 33: Categories of Smartphone owned – The UK (In Percent, June 2011) 60 52.5 50 40 30 20 14.8 18.0 11.5 10 0 iPhone Android Device Nokia BlackBerry Source: Portio Research Ltd. Internet Usage The increase in broadband speeds brought about by technological changes has understandably influenced Internet usage. Internet use also varies between different user groups. For example, Facebook is commonly accessed by teens, while search engines – such as Google – and content rich websites – such as BBC News – are preferred by the working age groups. Table 5: Facts on Internet Users – The UK (End-2010) Statistics (End-2010) Internet Users (In Million) 53.1 Mobile Internet Users (In Million) 23.3 Source: Portio Research Ltd. Around 41 percent of total UK Internet users access the Internet though their mobile phones. Convenience, urge to stay connected all the time, job requirement and availability of flexible and affordable data plans are the drivers contributing to the increase in mobile Internet usage. The next figure shows the extent to which such drivers are factors for our UK survey respondents. 50 © 2011, Portio Research. All Rights Reserved The increase in broadband speeds brought about by technological changes has understandably influenced Internet usage. Convenience, urge to stay connected all the time, job requirement and availability of flexible and affordable data plans are the drivers contributing to the increase in mobile Internet usage.
  • Mobile Data Usage Trends 2011-2015 13 Figure 34: Drivers contributing to the increase in Mobile Internet access – The UK (June 2011) Convenience 87.7 To stay connected all the time 46.2 Job demands it 15.4 Flexible and affordable plans 13.8 0 20 40 60 80 100 Percentage of respondents who have chosen the respective driver Source: Portio Research Ltd. For mobile data usage and Internet access, surveyed UK mobile users opt for various data plans offered by MNOs. While unlimited data plans are the favorites, with 46.9 percent of respondents subscribing to such plans, monthly bundled plans are almost equally favoured by respondents. However, with MNOs‘ approach being to completely monetise data usage, unlimited data plans are being revoked by applying an upper cap to the free data usage. This move will likely favour the popularity of monthly bundled data plans. The figure below shows the break-out of the various data plans opted for by respondents. 14 Figure 35: Break-out of Mobile Data Plan Types – The UK (In Percent, June 2011) 7.8% 43.8% 46.9% 1.6% Unlimited Data plans Pay-per-Use Monthly Bundles Use Wi-Fi to Access Internet Source: Portio Research Ltd. 13 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. 14 Note: The percentages do not add up to 100 percent because of rounding off errors. © 2011, Portio Research. All Rights Reserved 51
  • Mobile Data Usage Trends 2011-2015 The table below shows the top five websites viewed by respondents through their personal computers. Facebook tops the list, reflecting the growing popularity of social networking, followed by Google, the news content provider BBC News, Yahoo and eBay. Table 6: Top 5 Websites accessed through Desktop – The UK (June 2011) Rank Websites Category 1 Facebook Social Networking 2 Google Search Engine 3 BBC News News 4 Yahoo Search Engine/E-mail/Entertainment 5 eBay e-Commerce Source: Portio Research Ltd. The online behavior of UK respondents on mobile is also quite similar to that on PCs, with Facebook, Google and BBC News again featuring in the top five accessed websites via mobile Internet. However, Yahoo and eBay are replaced by Gmail and YouTube. Table 7: Top 5 Websites accessed through Mobile – The UK (June 2011) Rank Websites Category 1 Facebook Social Networking 2 Google Search Engine 3 BBC News News 4 YouTube Entertainment 5 Gmail E-mail Source: Portio Research Ltd. When it comes to downloading heavy files, Wi-Fi hotspots are the first preference for our UK respondents. 60.3 percent of those surveyed use Wi-Fi hotspots for such downloads as it is free or has minimal associated expenses. However, 39.7 percent of respondents still prefer the use of 3G and above networks, primarily owing to a lack of availability of Wi-Fi hotspots or the slow speeds of available hotspots on account of multiple users being connected to them. Data security is another important factor deterring respondents from using Wi-Fi hotspots. 52 © 2011, Portio Research. All Rights Reserved The online behavior of UK respondents on mobile is also quite similar to that on PCs, with Facebook, Google and BBC News again featuring in the top five accessed websites via mobile Internet.
  • Mobile Data Usage Trends 2011-2015 Figure 36: Break-out of Network Access preferred for Heavy File Downloads – The UK (In Percent, June 2011) 39.7% 60.3% Use Wi-Fi Hotspots Download data heavy files through 3G Source: Portio Research Ltd. Mobile Applications Even in the advanced UK mobile market, not all smartphone users download mobile applications. The major reasons cited by smartphone users for not downloading apps are a lack of awareness about mobile applications and a disinterest in using them. Figure 37: Percentage of Smartphone Users who Download Mobile Apps – The UK (June 2011) 74.1% 25.9% Smartphone users who download mobile apps Smartphone users who do not download mobile apps Source: Portio Research Ltd. The surveyed UK smartphone users who do download mobile applications do so from all apps‘ categories. E-mail and news are the two most popular apps categories for this geographic segment, with social networking coming a close third. Games and mobile commerce round out the UK‘s top 5 app types. © 2011, Portio Research. All Rights Reserved 53 E-mail and news are the two most popular apps categories for this geographic segment, with social networking coming a close third.
  • Mobile Data Usage Trends 2011-2015 15 Percentage of respondents using mobile apps Figure 38: Top 5 Mobile Application Types – The UK (June 2011) 25 20.9 20.7 19.8 20 13.2 15 10 3.8 5 0 E-mail News and Info Social networking Games Mobile Commerce Mobile Application Types Source: Portio Research Ltd. Among the respondents owing a smartphone, 77.5 percent of them acknowledge the download of a paid app. The figure below shows the percentage split of smartphone users who download only free apps, and those who download both paid and free apps. Figure 39: Paid vs. Free Apps Download Behaviour – UK Smartphone Users (In Percent, June 16 2011) 77.5% 22.5% Download Paid and Free Apps Download only Free Apps Source: Portio Research Ltd. 15 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. 16 Note: None of the local respondents download only paid apps. 54 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Table 8: Additional Analysis of Paid and Free Downloads – The UK (In Percent, June 2011) Percentage of Surveyed Smartphone Owners Mobile Apps Download Behaviour Percentage of smartphone users who only download free apps 22.5 Percentage of smartphone users who only download paid apps 0.0 Paid apps form between 1-10 percent of smartphone user‘s total downloaded apps 30.0 Paid apps form between 11-20 percent of smartphone user‘s total downloaded apps 15.0 Paid apps form between 21-35 percent of smartphone user‘s total downloaded apps 7.5 Paid apps form between 36-50 percent of smartphone user‘s total downloaded apps 15.0 Paid apps form between 51-99 percent of smartphone user‘s total downloaded apps 10.0 Source: Portio Research Ltd. Percentage of respondents using mobile apps Figure 40: Factors deterring Mobile App Users from Downloading Paid Mobile Apps – The UK 17 (June 2011) 68.0 70 60 50 40 28.0 30 20 16.0 12.0 8.0 10 0 No-value addition Cost of an app Security concerns Free substitute related to mobile apps available transactions for every paid app Crack/pirated files available Source: Portio Research Ltd. 17 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. © 2011, Portio Research. All Rights Reserved 55
  • Mobile Data Usage Trends 2011-2015 18 Figure 41: How do Mobile Application Users Discover New Apps – The UK (June 2011) While browsing through app store 63.9 Search for a specific type of App 58.3 Friends' Recommendation 55.6 Social Networking 30.6 See ads while using other apps 19.4 Browsing online 13.9 0 20 40 60 80 Percentage of respondents using mobile apps Source: Portio Research Ltd. 18 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. 56 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Social Networking Social networking is among the fastest growing mobile services in popularity terms, having been able to replicate the user experience, and hence success, of the desktop version on the mobile platform. Now, both a mobile website version and a mobile app are available for almost all social networking sites. The figure below compares the frequency of use by survey respondents of different activities on social networking websites/applications via mobile. Table 9: Frequency of Different Activities on a Social Networking Site via Mobile Phone – The UK (In Percent, June 2011) Activity Several Times a Day (In Percent) Once a Day (In Percent) Few Times a Month (In Percent) Once a Month (In Percent) Never (In Percent) Frequency of posting comments on a friend‘s wall 17.4 20.1 22.2 25.1 15.2 Frequency of sending private messages to friends 7.6 27.3 34.1 15.3 15.7 Frequency of posting comments to a friend‘s photos 12.1 20.3 27.7 22.2 17.7 Frequency of sending an IM to friends through a social networking website 7.9 5.2 24.3 22.4 40.2 Frequency of uploading photos 2.7 7.6 34.9 34.7 20.1 Frequency of updating your status messages 15.2 19.6 25.1 25.2 14.9 Frequency of playing games 12.6 7.4 5.3 25.4 49.3 Frequency of watching videos 10.1 12.4 25.7 22.2 29.6 Source: Portio Research Ltd. © 2011, Portio Research. All Rights Reserved 57
  • Mobile Data Usage Trends 2011-2015 Typical User Profile Mr. Smith Age group: 35-44 years Sex: Male Employment status: Employed Job Title: Sales Manager Average monthly mobile bill: GBP 84.5 (USD 137.2) Type of data plan: Unlimited data plan or monthly bundles Smartphone of choice iPhone/BlackBerry Additional mobile device Laptop/Tablet 61.7 percent voice charges Mobile Bill Split 38.3 percent non-voice charges Daily Average Usage Voice Calling (in Minutes) 55 - 60 minutes Social Networking websites (in Minutes) 50 – 55 minutes Online video streaming (in Minutes) 30 – 35 minutes Other Online activities (in Minutes) 50 – 55 minutes Text Messages (per day) 18-19 Multimedia messages (per month) 6-7 Mobile applications downloaded (per month) 4-7 Paid app downloads as a percentage of total mobile app downloads 23 percent Apps on the mobile: 41 Work related apps: 8 Favorite mobile websites: Google, Facebook, BBC News and YouTube Favorite mobile application categories: Social Networking, E-mail, Games and News How does Mr. Smith discover apps Friends‘ recommendation and requirement specific search Preferred access for heavy data file downloads Wi-Fi hotspots if available or else 3G network Comment about the changing mobile market „I am happy. Although there are far too many apps to search through‟. 58 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 China China is the world‘s largest mobile market in terms of mobile subscribers. At end-2010, it recorded a subscriber base of 842 million, which then crossed 925 million subscribers by the first half of 2011 – the milestone of a billion mobile subscribers now beckons. Smartphone penetration in China is very low compared to developed countries such as the US and the UK, however with the increasing affordability of smartphones and the presence of advanced mobile networks, China is witnessing high growth in smartphone shipments. Subscribers here prefer to use their mobile phones for daily tasks such as instant messaging, social networking, reading news and eBooks which were previously the domain of desktops or laptops. Table 10: Key Facts – China (End-2010) Statistics (End-2010) Population (In Million) 1,333.4 Mobile Subscribers (In Million) 842.0 Mobile Penetration (In Percent) 63.1 Smartphone Penetration (In Percent) 3.9 Mobile Internet Users (In Million) 302.7 Mobile Internet Penetration (In Percent) 36.0 3G Users (In Million) 47.1 SMS Traffic (In Billion) 827.7 MMS Traffic (In Billion) 75.1 Facebook Users (In Million) Blocked Twitter Users (In Million) Blocked Source: Portio Research Ltd. © 2011, Portio Research. All Rights Reserved 59 At end-2010, China recorded a subscriber base of 842 million, which then crossed 925 million subscribers by the first half of 2011 – the milestone of a billion mobile subscribers now beckons.
  • Mobile Data Usage Trends 2011-2015 Monetisation of Mobile Services Asia Pacific countries, like China and India, generate lower ARPU compared to their western counterparts. This is primarily due to two factors – a huge chunk of the mobile subscriber base belongs to the bottom of the pyramid demographic, and so far, instead of promoting their data services, MNOs have focussed on acquiring new customers for revenue. The average monthly mobile spend in China is limited to USD 20 for more than 76 percent of survey respondents. The figure below depicts the percentage share of respondents by their average monthly mobile spend. Figure 42: Break-out of Respondents by Average Monthly Mobile Spend – China (In Percent, June 2011) 48.8% 9.3% 7.1% 27.9% 6.9% Less than USD 10 USD 10-USD 20 USD 31-USD 40 USD 21-USD 30 Greater than USD 40 Source: Portio Research Ltd. Even though voice ARPU is declining, voice revenue still forms the majority element of mobile revenue in China. According to survey respondents, 58.7 percent of their mobile spend goes to voice. Figure 43: Break-out of Voice vs. Non-voice Mobile Spend – China (In Percent, June 2011) 41.3% 58.7% Voice Non-Voice Source: Portio Research Ltd. 60 © 2011, Portio Research. All Rights Reserved Even though voice ARPU is declining, voice revenue still forms the majority element of mobile revenue in China.
  • Mobile Data Usage Trends 2011-2015 Popular Mobile Activities Reading news/eBooks, instant messaging, mobile search and gaming are the top activities among China‘s respondents, after messaging (SMS and MMS) and voice calling. 81.4 percent of respondents ranked messaging (SMS and MMS) as their top activity in terms of frequency of use. With the increasing smartphone and mobile Internet penetration, services other than voice, texting and picture messaging hold enormous potential and are expected to help MNOs in increasing their mobile revenues. Respondents also stated that if data plans become more affordable, they will increase the use of their mobile phones for entertainment and information purposes. 19 Figure 44: Top 6 Activities on Mobile Phone – China (June 2011) Messaging (SMS and MMS) 81.4 74.4 Voice Calling 60.5 Reading News/eBooks 55.8 Instant Messaging 51.2 Mobile Search Gaming 49.5 0 20 40 60 80 100 Percentage of respondents who selected the given activities among their Top 6 mobile activities Source: Portio Research Ltd. According to our survey, an average Chinese mobile user spends most of their time reading news and eBooks. Respondents stated that on average they spend 2.54 hours per day reading news/eBooks via mobile. This also includes daily news feeds via SMS or MMS. The figure on the next page depicts the average time spent per day on various activities via mobile. 19 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. © 2011, Portio Research. All Rights Reserved 61
  • Mobile Data Usage Trends 2011-2015 Figure 45: Average Time Spent on Various Activities via Mobile per Day – China (In Hours, June 2011) Average Time Spent per Day (In Hours) 3 2.54 2 1.02 1 0.91 0.51 0.45 0.14 0 Reading News/eBooks Social Networking Voice Calling Video Streaming Gaming Messaging (SMS and MMS) Source: Portio Research Ltd. Smartphone Users As of end-2010, China‘s smartphone penetration stood at 3.9 percent. Our survey findings show that the primary reason for low smartphone uptake is affordability, with more than 63 percent of respondents not wanting to spend so much on a handset, and 10.3 percent commenting that they cannot afford smartphones. Another factor is that feature phones in China are equipped with advanced features, leaving users less motivated to buy a smartphone. For example, in June 2011, iaSolution Inc. and Alipay Corporation jointly launched the first mobile payment solution for feature phones in China. The solution offers a secured mobile payment application to feature phone users, which previously was only available for smartphones, and doesn‘t require users to open a browser or pay through SMS or MMS. The next figure shows the reasons cited by respondents for not owning a smartphone. 62 © 2011, Portio Research. All Rights Reserved The feature phones in China are equipped with advanced features, leaving users less motivated to buy a smartphone.
  • Mobile Data Usage Trends 2011-2015 Figure 46: Contribution of factors deterring Smartphone Usage – China (In Percent, June 20 2011) Percentage of respondents 70 63.6 60 54.5 50 40 30 20 10.3 9.1 10 0 I cannot afford it I do not wish to spend so much money on a mobile phone It is so complicated to use My feature phone has all the required functions Source: Portio Research Ltd. Among the respondents using smartphones, 43.8 percent own an iPhone. Android devices were the second favourite with 34.4 percent of respondents owning such a handset. 21 Figure 47: Categories of Smartphone owned – China (In Percent, June 2011) Percentage of respondents 50 43.8 40 34.4 30 18.8 20 9.4 10 6.3 0 iPhone Android Device Nokia BlackBerry Windows Device Smartphone Source: Portio Research Ltd. 20, 21 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. © 2011, Portio Research. All Rights Reserved 63
  • Mobile Data Usage Trends 2011-2015 Internet Usage China has the highest number of Internet users worldwide, having amassed 457.3 million at end-2010, and advancements in telecoms and I.T. have also led to exponential growth in mobile Internet users in the country. As of end 2010, China had 302.7 million mobile Internet users, having seen this user base grow at a CAGR of 105.4 percent between 2006-2010. Table 11: Facts on Internet Users – China (End-2010) Statistics (End-2010) Internet Users (In Million) 457.3 Mobile Internet Users (In Million) 302.7 Percentage of Internet users who surf the Internet only on a mobile phone 9.4 Source: CNNIC Internet Users (In Million) Figure 48: Total Internet Users and Mobile Internet Users – China (In Million, 2006-2010) 500 457.3 384.0 400 302.7 298.0 300 233.4 210.0 200 137.0 100 117.6 50.4 17.0 0 2006 2007 2008 2009 2010 Year Mobile Internet Users Total Internet Users Source: CNNIC, Portio Research Ltd. 64 © 2011, Portio Research. All Rights Reserved As of end 2010, China had 302.7 million mobile Internet users, having seen this user base grow at a CAGR of 105.4 percent between 20062010.
  • Mobile Data Usage Trends 2011-2015 Mobile Internet Users as a percentage of Total Internet Users Figure 49: Mobile Internet Users as a percentage of Total Internet Users – China (In Percent, 2006 – 2010) 80 66.2 60.8 60 39.5 40 24.0 20 12.4 0 2006 2007 2008 2009 2010 Year Source: Portio Research Ltd. Percentage of Total Internet Users Figure 50: Percentage share of Internet Users accessing Internet via Desktop, Laptop and Mobile – China (In Percent, End-2010) 100 80 89.4 73.4 78.4 60.8 66.2 60 45.7 39.5 40 27.8 30.7 20 0 Desktop Laptop 2008 2009 Mobile 2010 Source: CNNIC, Portio Research Ltd. © 2011, Portio Research. All Rights Reserved 65
  • Mobile Data Usage Trends 2011-2015 Convenience of accessing the Internet and the desire to stay connected to family, friends and peers even when on-the-move are the two major factors driving the growth of mobile Internet access in China. 22 Figure 51: Drivers contributing to the increase in Mobile Internet access – China (June 2011) Convenience 79.1 To stay connected all the time 44.2 Flexible and affordable plans 29.5 Peer Pressure 4.7 Mobile is the only way to access Internet 2.4 Job demands it 2.1 0 15 30 45 60 75 90 Percentage of respondents who have chosen the respective driver Source: Portio Research Ltd. Voice and messaging still dominate the Chinese mobile market. Therefore, mobile users prefer monthly bundles over unlimited data plans and pay-per-use plans. Figure 52: Break-out of Mobile Data Plan Types – China (In Percent, June 2011) 77.4% 19.4% Unlimited Data plans 3.2% Pay-per-Use Monthly Bundles Source: Portio Research Ltd. 22 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. 66 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 China‘s Internet market is entirely dominated by local players, who have an edge over global players because of their better understanding of the local audience, ability to provide superior local language support and greater understanding of stringent government regulations. Due to firewall and legal restrictions, Internet giants such as Facebook, Twitter and YouTube are blocked in the country, and this has led to the emergence of local players in almost every category of the Internet space, wherein they enjoy significant market shares. For example, Baidu has taken Google‘s place in the search engine category, Renren dominates the social networking space, Tencent QQ caters to instant messaging, Sina‘s Weibo is a replica of micro-blogging giant Twitter, Taobao has replaced eBay in ecommerce, and Youku is extensively used to watch videos instead of YouTube. Baidu is the most commonly accessed website in China via desktop and dominates the search engine category with a market share of 66.42 percent as of end-June 2011, followed by Google with a market share of 30.23 23. Tencent‘s QQ instant messaging stands strong at second place among the most accessed websites through a desktop. As of June 2011, QQ reported a user base of over 600 million, with nearly 45 percent of China‘s population utilising QQ to connect with each other. Users can access QQ through a web browser, mobile website, mobile application and text messaging. China‟s Internet market is entirely dominated by local players, who have an edge over global players because of their better understanding of the local audience, ability to provide superior local language support and greater understanding of stringent government regulations. The table below highlights the top five websites accessed through a desktop. Table 12: Top 5 Websites accessed through Desktop – China (June 2011) Rank Websites Category 1 Baidu Search Engine 2 QQ Instant Messaging 3 Google Search Engine 4 Sina News/Entertainment 5 Taobao e-Commerce Source: Portio Research Ltd. While Baidu rules among desktop Internet users, Google proves the most popular among mobile users. In June 2011, Google had a market share of 86.14 percent compared to Baidu‘s 12.52 percent share24, and Google‘s success in the mobile search engine space can primarily be attributed to its strategic partnership with China‘s largest operator China Mobile. As noted earlier, according to our survey Chinese mobile users spend most of their time reading news and eBooks, and particularly enjoy reading while on-the-go, and while commuting between their home and workplace. Chinese words take up less space than the translated text in English and thus Chinese text can be displayed in a relatively smaller space. This makes eBooks in Chinese better suited than English for mobile viewing. Sina is the market leader in the news website category on both desktop and mobile platforms. 23 24 Source: http://gs.statcounter.com/#search_engine-CN-monthly-200906-201106 Source: http://gs.statcounter.com/#mobile_search_engine-CN-monthly-200906-201106 © 2011, Portio Research. All Rights Reserved 67 While Baidu rules among desktop Internet users, Google proves the most popular among mobile users.
  • Mobile Data Usage Trends 2011-2015 Social networking has gained massive popularity among local mobile users, and Renren, Kaixin001 and Qzone dominate the social networking category in China. Table 13: Top 5 Websites accessed through Mobile – China (June 2011) Rank Websites Category 1 Google Search Engine 2 Baidu Search Engine 3 Sina News/Entertainment 4 Weibo Social Networking (Micro-blogging like Twitter) 5 Renren Social Networking Source: Portio Research Ltd. 88.4 percent of survey respondents are willing to wait for a Wi-Fi hotspot to download heavy data files because it is free of charge. Only 11.6 percent of respondents download such files through 3G. 3G user penetration is low in China and this is also one of the reasons for the lower percentage of people opting for this download method. Figure 53: Break-out of Network Access preferred for Heavy File Downloads – China (In Percent, June 2011) 88.4% 11.6% Use Wi-Fi Hotspots Download data heavy files through 3G Source: Portio Research Ltd. 68 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Mobile Applications Mobile applications usage is high among China‘s smartphone users, with 90.6 percent of the respondents who own a smartphone having downloaded a mobile application. The percentage of smartphone users downloading apps is relatively higher here than in the US and UK, primarily because of China‘s low smartphone user base. Figure 54: Percentage of Smartphone Users who Download Mobile Apps – China (June 2011) 90.6% 9.4% Smartphone users who download mobile apps Smartphone users who do not download mobile apps Source: Portio Research Ltd. Instant messaging is the leading mobile application category, with 82.8 percent of respondents who use mobile apps ranking it among their top 3 app categories. Games take a close second position, followed by news and info, social networking and e-mail. 25 Percentage of respondents using mobile apps Figure 55: Top 5 Mobile Application Types – China (June 2011) 90 82.8 72.4 75 62.1 58.6 60 45 31.0 30 15 0 Instant Messaging Games News and Info Social Networking E-mail Mobile Application Types Source: Portio Research Ltd. 25 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. © 2011, Portio Research. All Rights Reserved 69 Instant messaging is the leading mobile application category, with 82.8 percent of respondents who use mobile apps ranking it among their top 3 app categories.
  • Mobile Data Usage Trends 2011-2015 App stores offer numerous free and paid apps to mobile users catering to entertainment, information and productivity requirements. When the respondents using mobile apps were asked about whether they also download paid mobile applications in addition to free mobile applications, 51.4 percent replied that they have never downloaded a paid app. Also, out of the respondents who have downloaded paid apps, over 59 percent have downloaded only ten or less paid apps. Figure 56: Paid vs. Free Apps Download Behaviour – China Smartphone Users (In Percent, 26 June 2011) 51.4% 48.6% Download Paid and Free Apps Download only Free Apps Source: Portio Research Ltd. Table 14: Additional Analysis of Paid and Free Downloads – China (In Percent, June 2011) Percentage of Surveyed Smartphone Owners Mobile Apps Download Behaviour Percentage of smartphone users who only download free apps 51.4 Percentage of smartphone users who only download paid apps 0.0 Paid apps form between 1-10 percent of smartphone user‘s total downloaded apps 28.6 Paid apps form between 11-20 percent of smartphone user‘s total downloaded apps 11.4 Paid apps form between 21-35 percent of smartphone user‘s total downloaded apps 3.2 Paid apps form between 36-50 percent of smartphone user‘s total downloaded apps 2.9 Paid apps form between 51-99 percent of smartphone user‘s total downloaded apps 2.5 Source: Portio Research Ltd. 26 Note: None of the local respondents download only paid apps. 70 © 2011, Portio Research. All Rights Reserved Out of the respondents who have downloaded paid apps, over 59 percent have downloaded only ten or less paid apps.
  • Mobile Data Usage Trends 2011-2015 Percentage of respondents using mobile apps Figure 57: Factors deterring Mobile App Users from Downloading Paid Mobile Apps – China 27 (June 2011) 70 62.5 60 46.9 50 40 30 25.0 21.9 20 15.6 10 0 No-value addition Cost of an app Security concerns Free substitute related to mobile apps available transactions for every paid app Crack/pirated files available Source: Portio Research Ltd. 28 Figure 58: How do Mobile Application Users Discover New Apps – China (June 2011) While browsing through app store 83.0 Friends' Recommendation 73.5 Search for a specific type of App 73.5 Browsing online 48.3 Social Networking 27.6 See ads while using other apps 24.1 0 20 40 60 80 100 Percentage of respondents using mobile apps Source: Portio Research Ltd. 27, 28 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. © 2011, Portio Research. All Rights Reserved 71
  • Mobile Data Usage Trends 2011-2015 Social Networking Mobile users‘ behaviour on a social networking website is predominantly defined by the popularity of websites such as QQ, Renren and Kaixin001. In China, instant messaging (IM) is among the top activities undertaken on a mobile phone, and similar behaviour is observed while accessing social networking websites/apps via mobile. The most common activity on social networking is sending a private message to friends. Private messages include sending an IM from a social networking mobile website/application, or sending a message to a friend via SMS using short code services. Only 28.4 percent of respondents update their status messages at least once a day on social networking sites via mobile, and 25.9 percent of respondents have never updated their status message via mobile. When accessing social networking via mobile, the majority of respondents have never uploaded photos, played games or watched a video. For the most part, users visit social networking via mobile to check what their friends are doing and to send a message to them. Mobile users‟ behaviour on a social networking website is predominantly defined by the popularity of websites such as QQ, Renren and Kaixin001. The figure below compares the frequency of use by survey respondents of different activities on social networking websites/applications via mobile. Table 15: Frequency of Different Activities on a Social Networking Site via Mobile Phone – China (In Percent, June 2011) Activity Several Times a Day (In Percent) Once a Day (In Percent) Few Times a Month (In Percent) Once a Month (In Percent) Never (In Percent) Frequency of posting comments on a friend‘s wall 16.7 25.4 22.2 9.5 26.2 Frequency of sending private messages to friends 31.2 16.5 23.8 10.3 18.2 Frequency of posting comments to a friend‘s photos 9.3 30.0 28.6 7.1 25.0 Frequency of sending an IM to friends through a social networking website 21.6 12.1 23.1 17.0 26.2 Frequency of uploading photos 4.8 16.8 30.8 14.3 33.3 Frequency of updating your status messages 12.6 15.8 36.1 9.6 25.9 Frequency of playing games 7.3 11.4 29.3 14.1 37.9 Frequency of watching videos 9.7 16.2 33.3 2.7 38.1 Source: Portio Research Ltd. 72 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Typical User Profile Mr. Wu Age group: 25-29 years Sex: Male Employment status: Employed Job Title: Analyst Average monthly mobile bill: RMB 103.25 (USD 15.9) Type of data plan: Monthly Bundles Smartphone of choice iPhone/Android device Additional mobile device Laptop 56.8 percent voice charges Mobile Bill Split 43.2 percent non-voice charges Daily Average Usage Voice Calling (in Minutes) 35-40 minutes Social Networking websites (in Minutes) 60-70 minutes Online video streaming (in Minutes) 20-25 minutes Other Online activities (in Minutes) 140-145 minutes Text Messages (per day) 13-15 Multimedia messages (per month) 10-12 Mobile applications downloaded (per month) 9-11 Paid app downloads as a percentage of total mobile app downloads 12.3 percent Apps on the mobile: 34 Work related apps: 8 Favorite mobile websites: Google, Baidu, Sina, Renren and QQ Favorite mobile application categories: Instant Messaging, Social Networking, Mobile search, News and info and Games How does Mr. Wu discover apps Friends‘ recommendation Preferred access for heavy data file downloads Wi-Fi hotspots Comment about the changing mobile market „More and more companies should launch the mobile version of their websites‟. © 2011, Portio Research. All Rights Reserved 73
  • Mobile Data Usage Trends 2011-2015 India India is the second largest mobile market in Asia Pacific, after China, and has seen strong growth over the last decade. Voice call rates have reduced from INR 16 (USD 0.36) per minute to INR 0.60 per minute (USD 0.0132) in the last 15 years, and today Indians are using mobile phones to surf the Internet, play games, listen to music, book movie tickets and download mobile apps. Table 16: Key Facts – India (End-2010) Statistics (End-2010) Population (In Million) 1,181.1 Mobile Subscribers (In Million) 752.2 Mobile Penetration (In Percent) 63.7 Smartphone Penetration (In Percent) 1.2 Mobile Internet Users (In Million) 40.0 Mobile Internet Penetration (In Percent) 5.3 3G Users (In Million) 29 9.0 SMS Traffic (In Billion) 291.6 MMS Traffic (In Million) 852.7 Facebook Users (In Million) 17.3 Twitter Users (In Million) 8.7 Source: Portio Research Ltd. 29 Note: The number of 3G subscribers for India is as of mid-May 2011. 74 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Monetisation of Mobile Services With more than 10 operators, India‘s mobile market has too many players. Each MNO is fighting for market share, and this intense competition means local MNOs focus more on the acquisition of new subscribers by offering lower voice and messaging rates. This is to the detriment of mobile data services, which are given less attention by both operators and mobile users. Fierce price wars and lower uptake of data services has led to lower ARPU in India. Nearly a third of Indian survey respondents spend less than USD 10 on mobile bills per month, and just 4.9 percent of respondents‘ monthly mobile spend breaks USD 40. Figure 59: Break-out of Respondents by Average Monthly Mobile Spend – India (in Percent, 30 June 2011) 39.6% 11.7% 10.9% 33.0% 4.9% Less than USD 10 USD 10-USD 20 USD 31-USD 40 USD 21-USD 30 Greater than USD 40 Source: Portio Research Ltd. Voice revenue is the major contributor to total mobile revenue in India. On average, our survey respondents said that 67.5 percent of their monthly mobile bills were accounted for by voice calling and 32.5 percent was from non-voice services – including messaging and other data services. Figure 60: Break-out of Voice vs. Non-voice Mobile Spend – India (In Percent, June 2011) 67.5% 32.5% Voice Non-Voice Source: Portio Research Ltd. 30 Note: The percentages do not add up to 100 percent because of rounding off errors. © 2011, Portio Research. All Rights Reserved 75 Nearly a third of Indian survey respondents spend less than USD 10 on mobile bills per month, and just 4.9 percent of respondents‟ monthly mobile spend breaks USD 40.
  • Mobile Data Usage Trends 2011-2015 Popular Mobile Activities India‘s user behaviour is quite different from that of Chinese users. The popular activities among India‘s mobile subscribers are social networking, music and radio streaming, gaming and e-mails. However, Chinese mobile users prefer reading news/eBooks, instant messaging, mobile search and gaming when using their handsets. In our earlier report ‗Mobile Messaging Futures 2011-2015‘, we highlighted the significant difference between the two Asia Pacific countries in terms of MMS traffic. Both countries have massive mobile subscriber bases, however while China had annual MMS traffic of 75.1 billion in 2010, India lagged far behind with annual traffic of just 852.7 million – just 1 percent of Chinese MMS traffic. The main driver for the stupendous growth in MMS traffic in China is A2P traffic. MMS usage is quite diversified, with services such as news, sports and horoscopes updates, movie trailers, discount coupons and magazine highlights subscription. The initial phase of Indian smartphone penetration came from the enterprise segment when companies started giving BlackBerry devices to their employees. However, in recent years, smartphones have expanded to consumers and users have started exploring smartphones for entertainment and information purposes. That said, voice and messaging (SMS and MMS) presently remain the most common activities for Indian mobile users, closely followed by social networking and music/radio streaming. 71.6 percent of respondents ranked voice calling as their top activity in terms of frequency of use. 31 Figure 61: Top 6 Activities on Mobile Phone – India (June 2011) Voice Calling 71.6 67.5 Messaging (SMS and MMS) 62.6 Social Networking 56.1 Music and Radio Streaming 41.3 Gaming E-mail 39.5 0 15 30 45 60 75 90 Percentage of respondents who selected the given activities among their Top 6 mobile activities Source: Portio Research Ltd. 31 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. 76 © 2011, Portio Research. All Rights Reserved Voice and messaging (SMS and MMS) presently remain the most common activities for Indian mobile users, closely followed by social networking and music/radio streaming.
  • Mobile Data Usage Trends 2011-2015 According to the survey findings, an average Indian mobile user spends 1.52 hours per day on voice calling. The figure below depicts the average time spent per day on various activities via mobile. Figure 62: Average Time Spent on Various Activities via Mobile per Day – India (In Hours, June 2011) Average Time Spent per Day (In Hours) 2 1.52 1.41 1.05 1 0.55 0.38 0.13 0 Voice Calling News and Web Surfing Social Networking Gaming Video Streaming Messaging (SMS and MMS) Source: Portio Research Ltd. Smartphone Users As of end-2010, smartphone penetration in India was 1.2 percent, with affordability being the major factor contributing to such low penetration. Approximately 42.5 percent of respondents showed disinterest in spending too much money on purchasing a mobile phone and over 26 percent said that they couldn‘t afford one. However, with smartphone prices falling every month, smartphone penetration is expected to rise. Figure 63: Contribution of factors deterring Smartphone Usage – India (In Percent, June 2011) 32 Percentage of respondents 50 42.5 40 30 34.4 26.3 20 10 5.6 5.0 0 I cannot afford it I do not wish to spend so much money on a mobile phone It is so complicated to use My feature phone has all the required functions I don‘t know what a smartphone is Source: Portio Research Ltd. 32 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. © 2011, Portio Research. All Rights Reserved 77 Approximately 42.5 percent of respondents showed disinterest in spending too much money on purchasing a mobile phone and over 26 percent said that they couldn‟t afford one.
  • Mobile Data Usage Trends 2011-2015 Nokia smartphones are the most popular handsets among Indian respondents, closely followed by Android devices: 34.5 percent of respondents own a Nokia and 31.7 percent have an Android device. Percentage of respondents Figure 64: Categories of Smartphone owned – India (In Percent, June 2011) 33 40 34.5 31.7 30 21.0 20 15.1 10 4.4 0 Nokia Android Device BlackBerry iPhone Windows Device Smartphone Source: Portio Research Ltd. Internet Usage As of end-2010, India‘s Internet user base reached 100 million, including 40 million mobile Internet users. Approximately 59 percent of these mobile Internet users accessed the Internet only through mobile. Table 17: Facts on Internet Users – India (End-2010) Statistics (End-2010) Internet Users (In Million) 100.0 Mobile Internet Users (In Million) 40.0 Percentage of Internet users who surf Internet only on mobile phone 23.6 Source: Google estimate, BBH India‟s Study 33 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. 78 © 2011, Portio Research. All Rights Reserved Approximately 59 percent of the mobile Internet users accessed the Internet only through mobile.
  • Mobile Data Usage Trends 2011-2015 34 Figure 65: Drivers contributing to the increase in Mobile Internet access – India (June 2011) Convenience 67.5 To stay connected all the time 60.2 Flexible and affordable plans 19.2 Job demands it 6.3 Mobile is the only way to access Internet 3.6 Peer Pressure 2.7 0 10 20 30 40 50 60 70 Percentage of respondents who have chosen the respective driver Source: Portio Research Ltd. 32.1 percent of respondents have subscribed to unlimited data plans and 34.1 percent of respondents pay for MBs consumed on a per MB basis. Nearly 4.9 percent of respondents have not subscribed to any mobile data plan, but access the Internet only through Wi-Fi hotspots. Figure 66: Break-out of Mobile Data Plan Types – India (In Percent, June 2011) 34.1% 27.2% 32.1% 4.9% 0.6% 1.1% Unlimited Data plans Pay-per-Use Monthly Bundles Speed Tiered Pricing Pay-per-Site Use Wi-Fi to Access Internet Source: Portio Research Ltd. 34 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. © 2011, Portio Research. All Rights Reserved 79
  • Mobile Data Usage Trends 2011-2015 In India, there appears to be scant difference between traditional desktop Internet usage and mobile Internet access – at least in terms of the websites visited by our respondents. While the rankings shift slightly, Facebook, Google, Gmail, Yahoo and YouTube are the top five websites accessed by both mediums. Table 18: Top 5 Websites accessed through Desktop – India (June 2011) Rank Websites Category 1 Facebook Social Networking 2 Google Search Engine 3 Gmail E-mail Client 4 Yahoo Search Engine/E-mail client/Entertainment 5 YouTube Video Streaming Source: Portio Research Ltd. Table 19: Top 5 Websites accessed through Mobile – India (June 2011) Rank Websites Category 1 Facebook Social Networking 2 Gmail E-mail Client 3 Google Search Engine 4 Yahoo Search Engine/E-mail client/Entertainment 5 YouTube Video Streaming Source: Portio Research Ltd. 80 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 89.4 percent of respondents prefer downloading heavy data files through a Wi-Fi hotspot instead of downloading them through 3G, even though 3G provides relatively higher download speeds. This is primarily because unlimited 3G data plans are not available in India, and 3G is otherwise too costly. In India, only unlimited 2G data plans are available. Figure 67: Break-out of Network Access preferred for Heavy File Downloads – India (In Percent, June 2011) 89.4% 10.6% Use Wi-Fi Hotspots Download data heavy files through 3G Source: Portio Research Ltd. Mobile Applications Indian smartphone users are concurrently expanding their appetite for mobile applications, as mobile apps are being launched everyday at an increasing rate. Mobile users are particularly partial to social networking, games and e-mail functionalities. According to our survey, 86.5 percent of respondents who own a smartphone download mobile apps. Figure 68: Percentage of Smartphone Users who Download Mobile Apps – India (June 2011) 86.5% 13.5% Smartphone users who download mobile apps Smartphone users who do not download mobile apps Source: Portio Research Ltd. © 2011, Portio Research. All Rights Reserved 81
  • Mobile Data Usage Trends 2011-2015 35 Percentage of respondents using mobile apps Figure 69: Top 5 Mobile Application Types – India (June 2011) 90 75 71.2 64.0 60 54.1 45 34.2 30 20.7 15 0 Social networking Games E-mail Location-based Services Video Streaming Mobile Application Types Source: Portio Research Ltd. 46 percent of Indian apps users download both paid apps and free apps. 54 percent of users prefer downloading only free apps. Social networking, Google maps and games applications are the favoured choice of free applications. Figure 70: Paid vs. Free Apps Download Behaviour – India Smartphone Users (In Percent, June 36 2011) 54.0% 46.0% Download Paid and Free Apps Download only Free Apps Source: Portio Research Ltd. 35 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. 36 Note: None of the local respondents download only paid apps. 82 © 2011, Portio Research. All Rights Reserved Social networking, Google maps and games applications are the favoured choice of free applications.
  • Mobile Data Usage Trends 2011-2015 Table 20: Additional Analysis of Paid and Free Downloads – India (In Percent, June 2011) Mobile Apps Download Behaviour Percentage of Surveyed Smartphone Owners Percentage of smartphone users who only download free apps 54.0 Percentage of smartphone users who only download paid apps 0.0 Paid apps form between 1-10 percent of smartphone user‘s total downloaded apps 22.7 Paid apps form between 11-20 percent of smartphone user‘s total downloaded apps 10.1 Paid apps form between 21-35 percent of smartphone user‘s total downloaded apps 6.2 Paid apps form between 36-50 percent of smartphone user‘s total downloaded apps 3.5 Paid apps form between 51-99 percent of smartphone user‘s total downloaded apps 3.5 Source: Portio Research Ltd. On average, an Indian mobile user has 22 apps on their smartphone. 54 percent of respondents using mobile apps do not download any paid apps and 22.7 percent of respondents say that the number of paid apps has not gone beyond 10 percent of the total number of downloaded applications on their mobile phone. There are varied factors which deter users from downloading paid apps. Cost is the main issue and puts off 74.8 percent of users from downloading a paid application, while the second most common reason among respondents for not downloading paid apps was the availability of free substitutes of paid apps – 54.6 percent of respondents cited this reason. © 2011, Portio Research. All Rights Reserved 83
  • Mobile Data Usage Trends 2011-2015 Percentage of respondents using mobile apps Figure 71: Factors deterring Mobile App Users from Downloading Paid Mobile Apps – India 37 (June 2011) 80 74.8 60 54.6 40 33.6 21.0 20 13.4 0 No-value addition Cost of an app Security concerns Free substitute related to mobile apps available transactions for every paid app Crack/pirated files available Source: Portio Research Ltd. Our survey shows that browsing through an app store is the most common way of exploring new apps. Users also depend on their friends‘ recommendations for trying new apps. 38 Figure 72: How do Mobile Application Users Discover New Apps – India (June 2011) While browsing through app store 69.0 Friends' Recommendation 64.7 Search for a specific type of an app 57.2 Social Networking 39.0 Browsing online 37.4 See ads while using other apps 18.2 0 15 30 45 60 75 Percentage of respondents using mobile apps Source: Portio Research Ltd. 37, 38 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. 84 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Social Networking Today, almost every smartphone comes with preloaded social networking applications such as Facebook and Twitter. The most frequent activity on social networking sites via mobile phone is updating the status. Approximately 70.9 percent of Indian respondents update the status message at least once a day, out of which 37.8 percent of users update their status multiple times a day. Indians certainly do not enjoy playing games on social networking sites via mobile. Only 4.3 percent of respondents play games on social networking sites via mobile phone several times a day, whereas approximately 64 percent of respondents have never played a game on a social networking site while browsing via mobile. Over all approximately 50 percent of smartphone users among our respondents are active on social networking through mobile in a given day. Approximately 70.9 percent of Indian respondents update the status message at least once a day, out of which 37.8 percent of users update their status multiple times a day. Indians certainly do not enjoy playing games on social networking sites via mobile. The figure below compares the frequency of use by survey respondents of different activities on social networking websites/applications via mobile. Table 21: Frequency of Different Activities on a Social Networking Site via Mobile Phone – India (In Percent, June 2011) Activity Several Times a Day (In Percent) Once a Day (In Percent) Few Times a Month (In Percent) Once a Month (In Percent) Never (In Percent) Frequency of posting comments on a friend‘s wall 30.0 22.2 30.4 12.6 4.8 Frequency of sending private messages to friends 19.6 23.6 34.2 17.4 5.2 Frequency of posting comments to a friend‘s photos 24.3 20.4 36.5 11.7 7.1 Frequency of sending an IM to friends through a social networking website 20.9 25.2 26.1 16.1 11.7 Frequency of uploading photos 10.9 31.7 39.1 10.0 8.3 Frequency of updating your status messages 37.8 33.1 19.1 6.5 3.5 Frequency of playing games 4.3 6.2 10.4 15.2 63.9 Frequency of watching videos 16.1 23.9 31.7 16.1 12.2 Source: Portio Research Ltd. © 2011, Portio Research. All Rights Reserved 85
  • Mobile Data Usage Trends 2011-2015 Typical User Profile Ms. Gupta Age group: 25-29 years Sex: Female Employment status: Employed Job Title: Engineer Average monthly mobile bill: INR 965.6 (USD 21.6 ) Type of data plan: Pay-per-Use Smartphone of choice Nokia/Android device Additional mobile device Laptop 64.6 percent voice charges Mobile Bill Split 35.4 percent non-voice charges Daily Average Usage Voice Calling (in Minutes) 120 minutes Social Networking websites (in Minutes) 75-80 minutes Online video streaming (in Minutes) 15 minutes Other Online activities (in Minutes) 86-88 minutes Text Messages (per day) 25 Multimedia messages (per month) 6 Mobile applications downloaded (per month) 3-5 Paid app downloads as a percentage of total mobile app downloads 10.1 Apps on the mobile: 16 Work related apps: 3 Favorite mobile websites: Facebook, Gmail, Google, Yahoo and LinkedIn Favorite mobile application categories: Social Networking, Games and E-mail How does Ms. Gupta discover apps Search for a specific type of app and friends‘ recommendation Preferred access for heavy data file downloads Wi-Fi hotspots Comment about the changing mobile market „The new generation phones are very complicated to use‟. 86 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 The US The US is one of the most advanced mobile markets worldwide in terms of data use. While other markets are still exploring ways to utilise their 3G networks, the US is among the very few countries which have already witnessed LTE deployments, and the country continues to invest heavily in its network and infrastructure. At end-2010, the number of active data39 capable devices stood at 270 million, an increase of 13 million devices from the 2009 level . The US smartphone market has huge potential. At end-2010, smartphone penetration reached 37.7 percent which is very much higher than that seen in the emerging markets of China and India. LTE deployments are expected to further fuel the uptake of smartphones and mobile applications. Table 22: Key Facts – The US (End-2010) Statistics (End-2010) Population (In Million) 309.7 Mobile Subscribers (In Million) 318.8 Mobile Penetration (In Percent) 103.0 Smartphone Penetration (In Percent) 37.7 3G Users (In Million) 96.4 SMS Traffic (In Billion) 2,100.0 MMS Traffic (In Million) 56,600.0 Facebook Users (In Million) 145.7 Twitter Users (In Million) 60.0 Source: Portio Research Ltd. 39 Source: CTIA © 2011, Portio Research. All Rights Reserved 87 While other markets are still exploring ways to utilise their 3G networks, the US is among the very few countries which have already witnessed LTE deployments, and the country continues to invest heavily in its network and infrastructure.
  • Mobile Data Usage Trends 2011-2015 Monetisation of Mobile Services 72.5 percent of US respondents have an average monthly bill of less than USD 101. However, for 11.8 percent of respondents the average monthly mobile spend crosses USD 150. This stems from the fact that data services are popular among local mobile users and the contribution of data revenue to total mobile revenue is growing steadily. Figure 73: Break-out of Respondents by Average Monthly Mobile Spend – The US (in Percent, June 2011) 43.6% 15.7% 11.8% 28.9% Less than USD 50 USD 51-USD 100 USD 101-USD 150 Greater than USD 150 Source: Portio Research Ltd. Data services have gained a lot of momentum in the US, primarily due to the adoption of advanced devices and unlimited data plans. Such unlimited plans were aggressively promoted by MNOs to increase the uptake of data services in the country. However, after experiencing network bandwidth issues, operators are now shifting to tiered pricing. The percentage share of data revenue within total revenue is expected to increase in the coming years. This is supported by the fact that AT&T witnessed massive growth in data traffic, even after the withdrawal of unlimited data plans. Figure 74: Break-out of Voice vs. Non-voice Mobile Spend – The US (In Percent, June 2011) 45.7% 54.3% Voice Non-Voice Source: Portio Research Ltd. 88 © 2011, Portio Research. All Rights Reserved Data services have gained a lot of momentum in the US, primarily due to the adoption of advanced devices and unlimited data plans.
  • Mobile Data Usage Trends 2011-2015 Popular Mobile Activities Messaging (SMS and MMS) is the most frequently used activity on US mobile phones, and has even surpassed voice calling in terms of frequency of use. On average, a US teen sends more than 3,000 text messages per month. 85.7 percent of respondents have chosen messaging among their top activities on a mobile handset. E-mail and social networking are the most popular non-voice services after messaging. 40 Figure 75: Top 6 Activities on Mobile Phone – The US (June 2011) Messaging (SMS and MMS) 85.7 83.2 Voice Calling 78.6 E-mail 64.3 Social Networking 28.6 Location-based services Music and Radio Streaming 21.4 0 20 40 60 80 100 Percentage of respondents who selected the given activities among their Top 6 mobile activities Source: Portio Research Ltd. 40 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. © 2011, Portio Research. All Rights Reserved 89
  • Mobile Data Usage Trends 2011-2015 Figure 76: Average Time Spent on Various Activities via Mobile per Day – The US (In Hours, June 2011) Average Time Spent per Day (In Hours) 1.5 1.34 1.25 1.15 0.95 1.0 0.61 0.5 0.22 0.0 Social Networking News and Web Surfing Video Streaming Voice Calling Gaming Messaging (SMS and MMS) Source: Portio Research Ltd. The time spent daily on video streaming is testament to its growing popularity among mobile users, and goes someway to illustrate why local MNOs have experienced major network bandwidth issues. Smartphone Users At end-2010, US smartphone penetration stood at 37.7 percent. Smartphone shipments as a percentage of total handset shipments are continuously growing, and in the second quarter 41 of 2011, smartphone sales surpassed feature phone sales . Among the US respondents using a smartphone, 30.8 percent own an iPhone. iPhone enjoys the dominance in the US market because it is particularly aided by Apple‘s local brand strength. Apple has time and again proved itself to be one of the most creative and innovative brands through its hardware and software offerings. According to our study, Apple is closely followed by BlackBerry and Android in the smartphone market. Nokia smartphones command a significant market share in China and India, but struggle in the US. 41 Source: http://phandroid.com/2011/06/30/nielsen-android-still-number-one-as-smartphones-outpace-featurephone-sales/ 90 © 2011, Portio Research. All Rights Reserved iPhone enjoys the dominance in the US market because it is particularly aided by Apple‟s local brand strength.
  • Mobile Data Usage Trends 2011-2015 Percentage of respondents Figure 77: Categories of Smartphone owned – The US (In Percent, June 2011) 42 40 30.8 30 26.9 26.9 20 11.5 10 3.8 0 iPhone BlackBerry Android Device Windows Device Nokia Smartphone Source: Portio Research Ltd. Internet Usage The US is a tech savvy country, in part illustrated by the fact that 79 percent of the population access the Internet. At end-2010, the US Internet user base reached 244.6 million. 43 Figure 78: Drivers contributing to the increase in Mobile Internet access – The US (June 2011) Convenience 92.9 To stay connected all the time 57.1 Job demands it 21.4 Flexible and affordable plans 17.9 0 10 20 30 40 50 60 70 80 90 100 Percentage of respondents who have chosen the respective driver Source: Portio Research Ltd. 42, 43 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. © 2011, Portio Research. All Rights Reserved 91
  • Mobile Data Usage Trends 2011-2015 Among US respondents, half of mobile data users have subscribed to unlimited data plans. However, since MNOs are withdrawing unlimited plans, new users are opting for monthly bundles. Figure 79: Break-out of Mobile Data Plan Types – The US (In Percent, June 2011) 7.1% 42.9% 50.0% Unlimited Data plans Pay-per-Use Monthly Bundles Source: Portio Research Ltd. Table 23: Top 5 Websites accessed through Desktop – The US (June 2011) Rank Websites Category 1 Facebook Social Networking 2 Google Search Engine 3 YouTube Video Streaming 4 Yahoo Search Engine/E-mail client/Entertainment 5 Gmail E-mail Client Source: Portio Research Ltd. As already noted, social networking and e-mail are the most popular non-voice activities (after SMS and MMS messaging) on mobile phones, and so perhaps unsurprisingly Facebook and Gmail make the list of top websites accessed via mobile. In the US, users have shifted to their handsets for most of the tasks which they earlier performed on desktops, and the top five websites accessed through desktop and mobile are almost identical – with the exception of Yahoo and the Weather Channel. 92 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Table 24: Top 5 Websites accessed through Mobile – The US (June 2011) Rank Websites Category 1 Facebook Social Networking 2 Google Search Engine 3 YouTube Video Streaming 4 Weather Channel Weather 5 Gmail E-mail Client Source: Portio Research Ltd. Approximately two-thirds of US respondents prefer downloading heavy data files from Wi-Fi hotspots, primarily due to the cost difference between using 3G and Wi-Fi. Also, in the US the Wi-Fi hotspots are easily available at various public places such as restaurants, hotels and shopping malls. Figure 80: Break-out of Network Access preferred for Heavy File Downloads – The US (In Percent, June 2011) 66.7% 33.3% Use Wi-Fi Hotspots Download data heavy files through 3G Source: Portio Research Ltd. © 2011, Portio Research. All Rights Reserved 93
  • Mobile Data Usage Trends 2011-2015 Mobile Applications With Apple App Store and Google Android Market headquartered in the US, the country is the epicentre of mobile application innovations. Apple App Store was launched in July 2008 and it kicked off the apps phenomenon in the US, and the US market has since demonstrated huge potential in the mobile apps space. Over 92 percent of the US respondents using smartphones have downloaded apps on their handsets. Figure 81: Percentage of Smartphone Users who Download Mobile Apps – The US (June 2011) 92.3% 7.7% Smartphone users who download mobile apps Smartphone users who do not download mobile apps Source: Portio Research Ltd. Games dominate the mobile applications market in the US, with social networking holding second place. For 71.4 percent of local respondents, games are among the top three most downloaded apps category. 44 Percentage of respondents using mobile apps Figure 82: Top 5 Mobile Application Types – The US (June 2011) 90 75 71.4 64.3 60 45 35.7 30 21.4 14.3 15 0 Games Social networking News and Info Location-based Mobile Commerce Services Mobile Application Types Source: Portio Research Ltd. 44 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. 94 © 2011, Portio Research. All Rights Reserved Games dominate the mobile applications market in the US, with social networking holding second place.
  • Mobile Data Usage Trends 2011-2015 Figure 83: Paid vs. Free Apps Download Behaviour – US Smartphone Users (In Percent, June 45 2011) 35.7% 64.3% Download Paid and Free Apps Download only Free Apps Source: Portio Research Ltd. Table 25: Additional Analysis of Paid and Free Downloads – The US (In Percent, June 2011) Mobile Apps Download Behaviour Percentage of Surveyed Smartphone Owners Percentage of smartphone users who only download free apps 35.7 Percentage of smartphone users who only download paid apps 0.0 Paid apps form between 1-10 percent of smartphone user‘s total downloaded apps 25.0 Paid apps form between 11-20 percent of smartphone user‘s total downloaded apps 21.4 Paid apps form between 21-35 percent of smartphone user‘s total downloaded apps 9.3 Paid apps form between 36-50 percent of smartphone user‘s total downloaded apps 5.0 Paid apps form between 51-99 percent of smartphone user‘s total downloaded apps 3.6 Source: Portio Research Ltd. 45 Note: None of the local respondents download only paid apps. © 2011, Portio Research. All Rights Reserved 95
  • Mobile Data Usage Trends 2011-2015 Percentage of respondents using mobile apps Figure 84: Factors deterring Mobile App Users from Downloading Paid Mobile Apps – The US 46 (June 2011) 80 72.7 60 45.5 36.4 40 27.3 20 1.5 0 No-value addition Cost of an app Security concerns Free substitute related to mobile apps available transactions for every paid app Crack/pirated files available Source: Portio Research Ltd. 47 Figure 85: How do Mobile Application Users Discover New Apps – The US (June 2011) Friends' Recommendation 72.7 While browsing through app store 54.5 Search for a specific type of an app 29.7 Social Networking 27.3 Browsing online 18.2 See ads while using other apps 9.1 0 15 30 45 60 75 Percentage of respondents using mobile apps Source: Portio Research Ltd. 46, 47 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. 96 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Social Networking In the US, millions of mobile users have joined social networking sites to share and connect with their family and friends, and Facebook is undoubtedly the market leader in the social networking space. In the US, more than 50 percent of respondents post a comment on their friend‘s wall at least once a day. Mobile users here access social networking sites to have a quick check on what their friends are doing and what is happening in their lives. In the US, activities such as playing games, watching videos, and sending an instant message are the least preferred activities when social networking via mobile. Mobile users here access social networking sites to have a quick check on what their friends are doing and what is happening in their lives. The figure below compares the frequency of use by survey respondents of different activities on social networking websites/applications via mobile. Table 26: Frequency of Different Activities on a Social Networking Site via Mobile Phone – The US (In Percent, June 2011) Several Times a Day (In Percent) Once a Day (In Percent) Few Times a Month (In Percent) Once a Month (In Percent) Never (In Percent) Frequency of posting comments on a friend‘s wall 23.8 27.9 19.8 20.4 8.1 Frequency of sending private messages to friends 6.5 14.2 42.4 27.2 9.7 Frequency of posting comments to a friend‘s photos 16.0 13.9 49.3 14.4 6.4 Frequency of sending an IM to friends through a social networking website 8.1 6.8 14.1 42.1 28.9 Frequency of uploading photos 2.2 1.8 47.6 41.3 7.1 Frequency of updating your status messages 5.7 8.6 50.0 21.4 14.3 Frequency of playing games 1.4 12.9 6.3 15.1 64.3 Frequency of watching videos 6.4 7.9 35.7 19.6 30.4 Activity Source: Portio Research Ltd. © 2011, Portio Research. All Rights Reserved 97
  • Mobile Data Usage Trends 2011-2015 Typical User Profile Mr. Ross Age group: 18-24 years Sex: Male Employment status: Not Employed Job Title: NA (Student) Average monthly mobile bill: USD 101.2 Type of data plan: Monthly Bundle Smartphone of choice iPhone Additional mobile device Laptop/Tablet 43.8 percent voice charges Mobile Bill Split 56.2 percent non-voice charges Daily Average Usage Voice Calling (in Minutes) 65-70 minutes Social Networking websites (in Minutes) 110-115 minutes Online video streaming (in Minutes) 60 minutes Other Online activities (in Minutes) 120 minutes Text Messages (per day) 42 Multimedia messages (per month) 2 Mobile applications downloaded (per month) 14-16 Paid app downloads as a percentage of total mobile app downloads 10.5 Apps on the mobile: 70 Work related apps: 0 Favorite mobile websites: Facebook, YouTube and Twitter Favorite mobile application categories: Social Networking, Games, Video streaming and Messaging How does Mr. Ross discover apps Friends‘ recommendation Preferred access for heavy data file downloads 3G network Comment about the changing mobile market „I wish I could eliminate the need to have a wallet and have all my credit cards securely stored on my smartphone‟. 98 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Chile Chile has the fourth highest mobile penetration in Latin America after Argentina, the Republic of Panama and Uruguay. The major players of Chile‘s mobile market are Movistar, Entel and Claro. Due to comparatively low PC penetration, the mobile phone is a major device with which to access the Internet. Table 27: Key Facts – Chile (End-2010) Statistics (End-2010) Population (In Million) 16.8 Mobile Subscribers (In Million) 19.9 Mobile Penetration (In Percent) 118.0 Smartphone Penetration (In Percent) 10.2 Mobile Internet Users (In Million) 5.8 Mobile Internet Penetration (In Percent) 29.1 3G Users (In Million) 1.4 SMS Traffic (In Billion) 1.9 MMS Traffic (In Million) 32.2 Facebook Users (In Million) 7.6 Twitter Users (In Million) 1.0 (Approx.) Source: Portio Research Ltd. © 2011, Portio Research. All Rights Reserved 99 Due to comparatively low PC penetration, the mobile phone is a major device with which to access the Internet.
  • Mobile Data Usage Trends 2011-2015 Monetisation of Mobile Services With a mobile penetration of 118 percent, MNOs in Chile‘s mobile market face intense competition between themselves, as subscriber additions are typically achieved by cannibalising another MNO‘s subscriber base. As a result, MNOs actively advertise their data services to lure in subscribers from other networks, and also to counter Chile‘s falling voice ARPU. Around two-thirds of respondents spend USD 50 or less on monthly mobile bills, however, 5.3 percent of respondents do spend over USD 101 per month. Figure 86: Break-out of Respondents by Average Monthly Mobile Spend – Chile (In Percent, 48 June 2011) 55.2% 28.5% 3.2% 11.1% 2.1% Less than USD 20 USD 20-USD 50 USD 51-USD 100 USD 101-USD 200 Greater than USD 200 Source: Portio Research Ltd. Voice spending contributes heavily towards Chilean‘s monthly mobile expenditure. As per our survey respondents, 65.1 percent of the monthly mobile bill is from voice usage. Figure 87: Break-out of Voice vs. Non-voice Mobile Spend − Chile (In Percent, June 2011) 65.1% 34.9% Voice Non-Voice Source: Portio Research Ltd. 48 Note: The percentages do not add up to 100 percent because of rounding off errors. 100 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Popular Mobile Activities The traditional mobile activities of voice calling and messaging (SMS and MMS) are the top two activities of Chilean mobile users – albeit closely followed by e-mail and, to a lesser extent, social networking. Gaming and music/radio streaming round out the top six mobile activities of local subscribers. 49 Figure 88: Top 6 Activities on Mobile Phone – Chile (June 2011) Voice Calling 80.2 70.9 Messaging (SMS and MMS) 69.8 E-mail 58.1 Social Networking Gaming 39.8 Music and Radio streaming 39.6 0 20 40 60 80 100 Percentage of respondents who selected the given activities among their Top 6 mobile activities Source: Portio Research Ltd. According to the survey, Chilean mobile respondents spend 1.41 hours per day reading news on the web or Internet surfing. The figure on the next page depicts the average time spent per day on various activities via mobile. 49 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. © 2011, Portio Research. All Rights Reserved 101
  • Mobile Data Usage Trends 2011-2015 Figure 89: Average Time Spent on Various Activities via Mobile per Day – Chile (In Hours, June 2011) Average Time Spent per Day (In Hours) 1.5 1.41 0.96 1.0 0.88 0.5 0.27 0.19 0.04 0.0 News and Web Voice Calling Surfing Social Networking Gaming Video Streaming Messaging (SMS and MMS) Source: Portio Research Ltd. Smartphone Users As of end-2010, smartphone penetration in Chile was 10.2 percent. Affordability has been identified as the major factor contributing to this low penetration, with 56.8 percent of respondents showing no desire to spend so much on a handset, and over 32 percent stating that they cannot afford smartphones. 50 Figure 90: Contribution of factors deterring Smartphone Usage – Chile (In Percent, June 2011) 56.8 Percentage of respondents 60 50 40 32.4 29.7 30 20 10 2.7 0 I cannot afford it I do not wish to spend so much money on a mobile phone It is so complicated to use My feature phone has all the required functions Source: Portio Research Ltd. Within our Chilean survey pool, 32.7 percent of respondents own an iPhone – anecdotally making it the most popular smartphone in this market. The next most widely-owned handsets are BlackBerry and Android devices with 26.5 percent and 22.4 percent respectively. 50 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. 102 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 51 Percentage of respondents Figure 91: Categories of Smartphone owned – Chile (In Percent, June 2011) 40 32.7 30 26.5 22.4 20 16.3 10 2.6 2.1 Windows Device Sony Ericsson 0 iPhone BlackBerry Android Device Nokia Smartphone Source: Portio Research Ltd. Internet Usage As of end-2010, Chile‘s Internet user base reached 7.57 million, including 5.84 million mobile Internet users. Table 28: Facts on Internet Users − Chile (End-2010) Statistics (End-2010) Internet Users (In Million) 7.6 Mobile Internet Users (In Million) 5.8 Source: ITU, SUBTEL The wish to stay connected all the time and convenience are the two major reasons for Chilean subscribers to access the Internet through mobile phones. The figure on the next page depicts the drivers for the adoption of mobile Internet in Chile. 51 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. © 2011, Portio Research. All Rights Reserved 103
  • Mobile Data Usage Trends 2011-2015 52 Figure 92: Drivers contributing to the increase in Mobile Internet access – Chile (June 2011) To stay connected all the time 83.6 Convenience 80.0 Flexible and affordable plans 18.2 Job demands it 14.5 Peer Pressure 1.9 Mobile is the only way to access Internet 1.7 0 10 20 30 40 50 60 70 80 90 Percentage of respondents who have chosen the respective driver Source: Portio Research Ltd. 78.2 percent of local respondents have subscribed to unlimited data plans and 10.9 percent chose monthly bundles. 3.6 percent of those surveyed have not subscribed to any form of mobile data plan, and access the Internet instead through Wi-Fi hotspots. Figure 93: Break-out of Mobile Data Plan Types – Chile (In Percent, June 2011) 78.2% 7.3% 10.9% 3.6% Unlimited Data plans Pay-per-Use Monthly Bundles Use Wi-Fi to Access Internet Source: Portio Research Ltd. 52 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. 104 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Overall, desktop and mobile Internet usage behaviour in Chile have very strong similarities. Facebook, Google, Gmail and Emol are the top four websites accessed through both desktops and mobile, while Hotmail comes fifth for desktop and YouTube takes that place in the case of mobile Internet access. Table 29: Top 5 Websites accessed through Desktop − Chile (June 2011) Rank Websites Category 1 Facebook Social Networking 2 Google Search Engine 3 Gmail E-mail Client 4 Emol News 5 Hotmail E-mail Client Source: Portio Research Ltd. Table 30: Top 5 Websites accessed through Mobile − Chile (June 2011) Rank Websites Category 1 Facebook Social Networking 2 Google Search Engine 3 Gmail E-mail Client 4 Emol News 5 YouTube Video Streaming Source: Portio Research Ltd. © 2011, Portio Research. All Rights Reserved 105
  • Mobile Data Usage Trends 2011-2015 69.2 percent of Chilean respondents prefer downloading heavy data files through Wi-Fi hotspots than through 3G, even though 3G provides relatively higher download speeds. Figure 94: Break-out of Network Access preferred for Heavy File Downloads – Chile (In Percent, June 2011) 69.2% 30.8% Use Wi-Fi Hotspots Download data heavy files through 3G Source: Portio Research Ltd. Mobile Applications Chilean smartphone users are increasingly downloading mobile applications on their handsets, with a particular focus on apps for social networking, e-mail, and news info. 87.2 percent of respondents who own a smartphone download mobile apps. Figure 95: Percentage of Smartphone Users who Download Mobile Apps – Chile (June 2011) 87.2% 12.8% Smartphone users who download mobile apps Smartphone users who do not download mobile apps Source: Portio Research Ltd. 106 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 53 Percentage of respondents using mobile apps Figure 96: Top 5 Mobile Application Types – Chile (June 2011) 90 78.0 75 63.4 53.7 60 39.0 45 30 15 7.3 0 Social Networking E-mail News and Info Games Mobile VoIP Mobile Application Types Source: Portio Research Ltd. The majority, albeit a slight one, of smartphone users are interested in downloading only free apps. Figure 97: Paid vs. Free Apps Download Behaviour – Chilean Smartphone Users (In Percent, 54 June 2011) 51.2% 48.8% Download Paid and Free Apps Download only Free Apps Source: Portio Research Ltd. 53 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. 54 Note: None of the local respondents download only paid apps. © 2011, Portio Research. All Rights Reserved 107
  • Mobile Data Usage Trends 2011-2015 Table 31: Additional Analysis of Paid and Free Downloads – Chile (In Percent, June 2011) Percentage of Surveyed Smartphone Owners Mobile Apps Download Behaviour Percentage of smartphone users who only download free apps 51.2 Percentage of smartphone users who only download paid apps 0.0 Paid apps form between 1-10 percent of smartphone user‘s total downloaded apps 26.8 Paid apps form between 11-20 percent of smartphone user‘s total downloaded apps 2.5 Paid apps form between 21-35 percent of smartphone user‘s total downloaded apps 2.4 Paid apps form between 36-50 percent of smartphone user‘s total downloaded apps 4.9 Paid apps form between 51-99 percent of smartphone user‘s total downloaded apps 12.2 Source: Portio Research Ltd. Cost of paid mobile applications and the availability of their free substitutes are the major factors that deter a Chilean user from downloading a paid app. Percentage of respondents using mobile apps Figure 98: Factors deterring Mobile App Users from Downloading Paid Mobile Apps – Chile 55 (June 2011) 70 62.1 60 48.3 50 40 34.8 34.1 30 20 10 3.4 0 No-value addition Cost of an app Security concerns Free substitute related to mobile apps available transactions for every paid app Crack/pirated files available Source: Portio Research Ltd. 55 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. 108 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 56 Figure 99: How do Mobile Application Users Discover New Apps – Chile (June 2011) Search for a specific type of an app 61.9 While browsing through app store 61.5 Friends' Recommendation 59.0 Browsing online 51.3 Social Networking 28.2 See ads while using other apps 12.8 0 15 30 45 60 75 Percentage of respondents using mobile apps Source: Portio Research Ltd. Browsing through an app store and searching for a specific app are the top contributing factors for a user to discover new apps. 56 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. © 2011, Portio Research. All Rights Reserved 109
  • Mobile Data Usage Trends 2011-2015 Social Networking As with other geographic regions, social networking has impacted the mobile behaviour of Chilean subscribers too. Posting comments, sending private messages and watching videos are the most frequent activities on social networking sites. The figure below compares the frequency of use by survey respondents of different activities on social networking websites/applications via mobile. Posting comments, sending private messages and watching videos are the most frequent activities on social networking sites. Table 32: Frequency of Different Activities on a Social Networking Site via Mobile Phone – Chile (In Percent, June 2011) Activity Several Times a Day (In Percent) Once a Day (In Percent) Few Times a Month (In Percent) Once a Month (In Percent) Never (In Percent) Frequency of posting comments on a friend‘s wall 10.9 27.8 24.2 7.2 29.9 Frequency of sending private messages to friends 10.6 26.8 32.8 11.9 17.9 Frequency of posting comments to a friend‘s photos 8.4 18.2 27.7 15.6 30.1 Frequency of sending an IM to friends through a social networking website 9.6 11.8 24.1 13.4 41.1 Frequency of uploading photos 3.8 4.6 32.5 19.3 39.8 Frequency of updating your status messages 3.6 18.1 25.3 21.7 31.3 Frequency of playing games 4.8 8.6 16.7 14.5 55.4 Frequency of watching videos 10.8 17.1 24.3 14.7 33.1 Source: Portio Research Ltd. 110 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Typical User Profile Mr. Sebastian Age group: 25-29 years Sex: Male Employment status: Employed Job Title: Research Associate Average monthly mobile bill: CLP 24,029.7 (USD 51.2) Type of Data Plan: Unlimited Data Plan Smartphone of choice BlackBerry/Android device Additional mobile device Laptop 71.8 percent voice charges Mobile Bill Split 28.2 percent non-voice charges Daily Average Usage Voice Calling (in Minutes) 45 – 50 minutes Social Networking websites (in Minutes) 95 –100 minutes Online video streaming (in Minutes) 55 – 60 minutes Other Online activities (in Minutes) 145 – 150 minutes Text Messages (per day) 5 Multimedia messages (per month) 1-2 Mobile applications downloaded (per month) 5-8 Paid app downloads as a percentage of total mobile app downloads 2 Apps on the mobile: 22 Work related apps: 3 Favorite mobile websites: Facebook, Google, Emol, Terra and Gmail Favorite mobile application categories: Social Networking, E-mail and News How does Mr. Sebastian discover apps Search for a specific type of app and while browsing through app stores Preferred access for heavy data file downloads Wi-Fi hotspots Comment about the changing mobile market © 2011, Portio Research. All Rights Reserved „ ‟ I would like to see an app for housing . 111
  • Mobile Data Usage Trends 2011-2015 The UAE The UAE mobile market has one of the highest mobile penetrations worldwide. The market entry of operator Du in 2007 broke the monopoly of Etisalat, and the market is now duopolistic. Du has captured more than 30 percent of the market in just three years, when the mobile penetration was already 125 percent at the time of launch. However, this does not imply that that Etisalat‘s subscriber base has decreased; in fact Etisalat‘s subscriber base too has been growing. The reason behind this was the increasing mobile penetration as people actively went for multiple SIM ownership. Also, the continuous inflow of foreign workers contributes to the high penetration as these foreign workers are not counted in the country's population but are counted in the mobile subscriber base. At end-2010, mobile penetration in the UAE reached 197.2 percent. The figure below highlights the various reasons that subscribers give for owning multiple SIMs. Figure 100: Contribution of factors encouraging Multiple SIM Ownership – The UAE (In 57 Percent, End-2010) Percentage of respondents 70 65.0 60 50.0 50 40 30 20 19.0 13.0 10 4.0 0 Separate SIMs for To avail different To use when To get better personal and promotions offered travelling abroad connectivity with business needs by two operators other regions of the country Other Source: TRA -The UAE 57 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. 112 © 2011, Portio Research. All Rights Reserved The UAE mobile market has one of the highest mobile penetrations worldwide.
  • Mobile Data Usage Trends 2011-2015 Table 33: Key Facts – The UAE (End-2010) Statistics (End-2010) Population (In Million) 5.1 Mobile Subscribers (In Million) 10.9 Mobile Penetration (In Percent) 197.2 Smartphone Penetration (In Percent) 14.8 Mobile Internet Users (In Million) 0.5 Mobile Internet Penetration (In Percent) 4.6 3G Users (In Million) 4.9 SMS Traffic (In Billion) 3.3 MMS Traffic (In Million) 63.0 Facebook Users (In Million) 2.4 Twitter Users (In Million) 58 2.2 Source: Portio Research Ltd. 58 Note: Twitter user base is as of June 2011. © 2011, Portio Research. All Rights Reserved 113
  • Mobile Data Usage Trends 2011-2015 Monetisation of Mobile Services The UAE is one of the highest generating ARPU mobile markets due to the high purchasing power of subscribers. While 5 percent of UAE respondents have a monthly mobile spend of less than USD 10, 18 percent said it is more than USD 110. Figure 101: Break-out of Respondents by Average Monthly Mobile Spend – The UAE (In Percent, June 2011) 26.0% 16.0% 35.0% 18.0% 5.0% Less than USD 10 USD 11-USD 40 USD 41-USD 70 USD 71-USD 110 Greater than USD 110 Source: Portio Research Ltd. Voice spending contributes heavily towards the monthly mobile expenditure. According to survey respondents, 85.8 percent of their monthly mobile outlay is from voice usage. Figure 102: Break-out of Voice vs. Non-voice Mobile Spend – The UAE (In Percent, June 2011) 85.8% 14.2% Voice Non-Voice Source: Portio Research Ltd. 114 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Popular Mobile Activities Voice calling and messaging (SMS and MMS) are the top two uses for mobile phones in the UAE, although e-mail runs a close third. The top six list of activities is completed by social networking, gaming and instant messaging. 59 Figure 103: Top 6 Activities on Mobile Phone – The UAE (June 2011) Messaging (SMS and MMS) 83.3 75.0 Voice Calling 66.7 E-mail Social Networking 58.4 Gaming 58.1 Instant Messaging 41.7 0 20 40 60 80 100 Percentage of respondents who selected the given activities among their Top 6 mobile activities Source: Portio Research Ltd. According to the survey, an average mobile user spends 1.36 hours per day on reading news on the web or surfing. The figure on the next page depicts the average time spent per day on various activities via mobile. 59 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. © 2011, Portio Research. All Rights Reserved 115
  • Mobile Data Usage Trends 2011-2015 Figure 104: Average Time Spent on Various Activities via Mobile per Day – The UAE (In Hours, June 2011) Average Time Spent per Day (In Hours) 1.5 1.36 1.21 1.0 0.72 0.5 0.28 0.22 0.06 0.0 News and Web Surfing Social Networking Voice Calling Gaming Video Streaming Messaging (SMS and MMS) Source: Portio Research Ltd. 116 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Mobile Applications Mobile apps usage has surged in the UAE, with the market capturing 60 percent of the mobile application business in the Middle East region. Around 40 percent of the surveyed smartphone owners use 6−10 mobile applications on a daily basis. The influence of mobile applications can be gauged from the fact that the UAE government has produced 20−25 mobile apps of its own. The figure below shows the top mobile application categories used by smartphone users in the UAE. 60 Figure 105: Top 5 Mobile Application Types – The UAE (June 2011) Percentage of respondents 70 65.7 60 50 40 30.8 28.2 30 24.5 23.4 News and Info Photo and video sharing 20 10 0 E-mail Social Networking Games Mobile Application Types Source: Portio Research Ltd. Internet Usage As of end-2010, the UAE‘s Internet user base reached 3.14 million. Out of these users, 16 percent used mobile phones to access the Internet. Table 34: Facts on Internet Users – The UAE (End-2010) Statistics (End-2010) Internet Users (In Million) 3.14 Mobile Internet Users (In Million) 0.50 Source: ITU, SUBTEL A survey by MasterCard indicates that Internet users in the UAE are increasingly performing online shopping. The percentage of MasterCard respondents doing so increased from 29 percent in 2009 to 42 percent in 2010. This growth is driven by the 25-44 age group. 60 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. © 2011, Portio Research. All Rights Reserved 117 Mobile apps usage has surged in the UAE, with the market capturing 60 percent of the mobile application business in the Middle East region.
  • Mobile Data Usage Trends 2011-2015 The figure below shows the different categories leading the growth of online commerce in the UAE. 61 Figure 106: Categories of Online Commerce – The UAE (In Percent, End-2010) Percentage of respondents 80 74.0 66.0 70 60 50 40 34.0 32.0 32.0 32.0 Clothing and Accessories Home Appliances and Electronic Products Restaurants Supermarkets 30 20 10 0 Airline Tickets Hotel Bookings Source: MasterCard. The growth of mobile Internet in the UAE is also impressive. By end-2010, 16 percent of Internet users accessed the web via mobile handsets; by June 2011, this percentage had grown to 50 percent. The next figure shows the top mobile website categories viewed by mobile Internet users in the UAE. 62 Figure 107: Categories of Mobile Websites viewed – The UAE (In Percent, June 2011) Percentage of respondents 80 72.5 70 60 50 36.7 40 35.8 33.7 29.6 30 20 10 0 E-mail Social Networking News Games Photo and video sharing Source: Portio Research Ltd. 61, 62 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. 118 © 2011, Portio Research. All Rights Reserved By end-2010, 16 percent of Internet users accessed the web via mobile handsets; by June 2011, this percentage had grown to 50 percent.
  • Mobile Data Usage Trends 2011-2015 Social Networking The UAE‘s social networking user base is growing fast, with Facebook being the most commonly used site. More than 45 percent of the UAE population has an account on Facebook, and among these social networking users some 97 percent access Facebook. The figure below shows the popularity of the various social networking websites among the social networking users in the UAE. 63 Percentage of Social Networking Users Figure 108: Popularity of Social Networking Websites – The UAE (In Percent, End-2010) 120 100 97.0 80 60 40 20 9.0 6.0 2.0 2.0 1.0 1.0 Bebo LinkedIn Picasa Others 0 Facebook Twitter MySpace Social Networking Websites Source: TRA - The UAE In the UAE, posting comments, sending private messages (including IM) and updating status messages are the most frequent activities on social networking sites via mobiles. 63 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. © 2011, Portio Research. All Rights Reserved 119 Among the social networking users some 97 percent access Facebook.
  • Mobile Data Usage Trends 2011-2015 Table 35: Frequency of Different Activities on a Social Networking Site via Mobile Phone – The UAE (In Percent, June 2011) Several Times a Day (In Percent) Once a Day (In Percent) Few Times a Month (In Percent) Once a Month (In Percent) Never (In Percent) Frequency of posting comments on a friend‘s wall 16.7 50.5 8.3 16.6 7.9 Frequency of sending private messages to friends 16.4 41.8 16.9 16.2 8.7 Frequency of posting comments to a friend‘s photos 24.9 25.4 25.2 15.9 8.6 Frequency of sending an IM to friends through a social networking website 32.9 25.9 8.1 25.3 7.8 Frequency of uploading photos 0.9 24.5 58.5 8.4 7.7 Frequency of updating your status messages 24.7 33.1 16.3 16.8 9.1 Frequency of playing games 8.9 24.4 17.1 23.9 25.7 Frequency of watching videos 8.5 41.5 25.1 16.1 8.8 Activity Source: Portio Research Ltd. Subscribers in the UAE overwhelmingly use PC/laptops to access social networking sites, rather than mobile handsets – as evidenced by the next figure. Percentage of Social Networking Users Figure 109: Device used to access Social Networking Websites – The UAE (In Percent, End64 2010) 100 93.0 80 60 40 17.0 20 0 PC/Laptops Mobile Phone Source: TRA - The UAE 64 Note: The sum of percentages can be more than 100 percent because the respondents were allowed to select more than one option. 120 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Typical User Profile Mr. Hussain Age group: 25-29 years Sex: Male Employment status: Not Employed Job Title: NA (Student) Average monthly mobile bill: AED 205.7 (USD 56.0) Type of Data Plan: No data plan, access Internet only through Wi-Fi hotspots Smartphone of choice BlackBerry/Android device Additional mobile device Laptop 85.8 percent voice charges Mobile Bill Split 14.2 percent non-voice charges Daily Average Usage Voice Calling (in Minutes) 25 – 30 minutes Social Networking websites (in Minutes) 85 – 90 minutes Online video streaming (in Minutes) 85 – 90 minutes Other Online activities (in Minutes) 85 – 90 minutes Text Messages (per day) 4 Multimedia messages (per month) 1 Mobile applications downloaded (per month) 2-4 Paid app downloads as a percentage of total mobile app downloads 5.0 Apps on the mobile: 10 Work related apps: 2 Favorite mobile websites: Google, Facebook, Gmail Favorite mobile application categories: Social Networking, E-mail and News How does Mr. Hussain discover apps Friends‘ recommendation and social networking Preferred access for heavy data file downloads Wi-Fi hotspots Comment about the changing mobile market „More free educational apps should be made available in the market‟. © 2011, Portio Research. All Rights Reserved 121
  • Mobile Data Usage Trends 2011-2015 Chapter 6 Managing Data Traffic Growth 122 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Managing Data Traffic Growth The use of mobile data services has increased tremendously in recent years, with global mobile data traffic growing at a CAGR of 164.6 percent between 2008 and 2010. SMS was the first mobile data service and has grown astronomically from its 1992 origin to achieve (at end-2010) daily traffic of 19 billion SMS messages. MMS, another traditional data service, has also substantially contributed to the uptake of data services by recording annual traffic of 248.7 billion for 2010. Web surfing, social networking, online gaming, streaming/uploading video, and audio on/through mobile phones are some of the popular avenues of data usage. In developed markets, mobile Internet browsing at speeds as high as 5 Mbps has become common, and many websites have their mobile versions as mobile portals to improve the mobile user experience. As noted, streaming and uploading of audio and video files on mobile phones is now commonplace, with YouTube alone claiming 200 million views per day via mobile. Another very popular service which is driving mobile data usage is social networking. People regularly snap photos and record videos through their mobile devices to post on their social network profiles. Sharing of third party videos and pictures is another added factor contributing to increasing mobile data usage. More than 250 million Facebook users access the site through mobile phones regularly. Another social networking site Twitter, which had a user base of 300 million as of May 2011, claims that half of its users access Twitter via mobile phones. The figure below shows monthly regional mobile data traffic for 2008-2010. Figure 110: Mobile Data Traffic per Month – Regional (In Petabytes, 2008 – 2010) Mobile Data Traffic (In PB) 100 92.9 90 80 73.0 70 60 47.8 50 40 32.0 35.0 30 20 17.0 11.0 13.0 11.4 6.0 10 6.0 4.0 3.0 1.0 2.0 0 2008 Europe Asia Pacific 2009 North America Latin America 2010 Africa and Middle East Source: Cisco VNI Mobile Forecasts © 2011, Portio Research. All Rights Reserved 123 The use of mobile data services has increased tremendously in recent years, with global mobile data traffic growing at a CAGR of 164.6 percent between 2008 and 2010.
  • Mobile Data Usage Trends 2011-2015 The table below shows the growth in monthly mobile data traffic in the forecast period 20112015 at a regional level. 65 Table 36: Mobile Data Traffic per Month – Regional (In Petabytes, 2011F – 2015F) Mobile Data Traffic per Month (In Petabytes) Region 2011F 2012F 2013F 2014F 2015F Europe 157.9 308.0 589.5 1,098.3 1,994.0 Asia Pacific 187.8 368.4 708.8 1,327.1 2,420.6 North America 91.4 176.5 334.9 619.3 1,117.2 Latin America 20.6 38.6 71.5 129.4 229.2 Africa and Middle East 12.9 24.1 44.5 80.7 143.2 Total 470.6 915.6 1,749.2 3,254.6 5,904.1 Source: Portio Research Ltd. This sudden boom in data services can be accredited to several factors. Uptake of highly capable mobile handsets has allowed consumers to opt for numerous available data services, and operators have supported this trend with the aim of making up for their falling voice ARPU with data revenue. From the demand side, consumers enjoy the various trappings which were earlier only available through wired channels. Web browsing, social networking, e-mail, IM, audio, video downloads, multiplayer online gaming and many more, are all now on offer to on-the-go users via mobile platforms. These developments are further supported by MNOs‘ initiatives, such as planned investments in improving network coverage and data speeds – both of which have further bolstered mobile data usage. The average network speed in 2009 was around 600 kbps; this jumped to approximately 1,050 kbps in 2010. But, as noted previously, this increase in mobile data usage took an ugly turn for operators when in some instances data demand began to stretch their networks to the limit. The rising data demand is forcing MNOs to invest significantly so that they can handle the ever increasing traffic. Also, data services have acquired so much importance that they‘re now among the key parameters consumers use to select an MNO service. To survive in the fiercely competitive market, MNOs are under added pressure to update and upgrade their network capabilities regularly to avoid losing both their current and potential customers. However, this scenario is generally only for MNOs operating in developed markets, such as the US, the UK, South Korea, Spain etc. Operators in developing markets are still not compelled to enhance their data services to lure customers. In these markets, it‘s typically only the upper strata of the customer base who crave enhanced data services, while the bottom of pyramid segment of their customer bases remain satisfied with basic voice and messaging services – affordability and lower mobile penetration (which influences subscriber acquisition strategy) are of course also considerations in emerging markets. 65 Note: Sum of regional numbers may not add up to the total due to rounding off errors. 124 © 2011, Portio Research. All Rights Reserved To survive in the fiercely competitive market, MNOs are under added pressure to update and upgrade their network capabilities regularly to avoid losing both their current and potential customers.
  • Mobile Data Usage Trends 2011-2015 However, this scenario is expected to change in the near future, and in some markets – such as India, China, South Africa – it has already begun, Factors in play here include government intervention, increasing smartphone penetration, urge of operators to charge for premium services to compensate for their falling ARPU, and improvements in other socioeconomic factors. So the pressure of mobile data traffic on networks is immense and inevitable, and this is the new reality that players have to work within. The MNO community is trying out different strategies to avoid the call drops and sluggish data connections that are the associated byproducts of data-traffic induced bandwidth crunches. While some initiatives focus on investments to upgrade and update networks, others involve limiting or managing data usage. Some MNOs are trying to limit data usage or monetise the extra usage by introducing a cap on data plans. Instead of offering unlimited data plans, operators are coming up with monthly cap plans, which when exceeded see consumers charged at premium rates. MNOs are also seeking to apply premium charging to – or to block entirely – heavy data consuming services, like video streaming, at peak hours. Here operators can try to manage the resources involved in data traffic. The resource distribution can be made to each of the users based on their demand. For example, a user‘s initial request for web page viewing can be supported by a high speed response, but the continuous data transfer activities – such as file downloading or file sharing – can be slowed down. This can be done most efficiently at the cell site by using admission control. The MNO community is trying out different strategies to avoid the call drops and sluggish data connections that are the associated byproducts of data-traffic induced bandwidth crunches. Another approach that an MNO can adopt is consumer profiling. This approach is supported by Deep Packet Inspection routers integrated with the Gateway GPRS Support Node in the core network. Under such a system, the consumer is profiled and the data requests are prioritised above or below others. For example, the data requests for those exceeding their cap usage can be throttled or entertained with low priority. Here subscribers can decide to pay more and avail the high speed service, or be satisfied with low speeds. Operators can also try to optimise the data content and the applications consuming data. In this strategy, MNOs can make use of the solutions which can optimise and compress the data content to effectively reduce the data traffic. MNOs also need to seek cooperation from the app developer community to improve the application designs to make the data usage of apps better suited to their respective capacities. An example of this is scheduling the regular updates of the applications during off peak hours. While this strategy leaves the consumers‘ pocket unaffected, it has certain limitations too. Optimisation of the data content can only be done to a certain extent, and only to certain formats. Also the operators need to involve the third party solution providers and the large application developers community, which can be difficult for them. Data offloading to numerous Wi-Fi networks at the available hot spots and also to femtocells is another strategy creating buzz and being encouraged in the MNO community. It is one of the most viable solutions for operators, as building more Wi-Fi hot spots is significantly cheaper than network upgrades and roll outs. T-Mobile USA, Metro PCS, Aircel and Ruckus Wireless are some of the MNOs who have already embraced Wi-Fi offloading. It is claimed that Wi-Fi offloading is already taking 20 percent of the data traffic load for these operators and is expected to increase further. Data offloading is handled using two approaches: on-the-spot offloading and delayed offloading. In on-the-spot offloading, mobile devices are spontaneously connected to Wi-Fi and data transfer starts immediately. The connectivity and data transfer with Wi-Fi is then © 2011, Portio Research. All Rights Reserved 125 Data offloading to numerous Wi-Fi networks at the available hot spots and also to femtocells is another strategy creating buzz and being encouraged in the MNO community. It is claimed that Wi-Fi offloading is already taking 20 percent of the data traffic load for these operators and is expected to increase further.
  • Mobile Data Usage Trends 2011-2015 discontinued when the subscriber moves out of the Wi-Fi coverage area, and the cellular network completes the unfinished aspect of the data transfer. This system also requires mobile devices to give priority to Wi-Fi networks over cellular networks for data exchange to support the on-the-spot offloading. In the case of delayed offloading, the data exchange is associated with a deadline. The data transfer is discontinued and resumed every time the user moves in and out of Wi-Fi coverage until the full data transfer is complete. If it does not happen within the set deadline, the mobile network completes the data transfer. MNOs can provide incentives to users to opt for longer deadlines, as this offloads most of the data to Wi-Fi. It will also make subscribers set such deadlines judiciously. Metro-femto is a similar approach adopted by Vodafone in the UK and Germany. With this system, low cost cell sites are installed in a high data traffic region which is a comparatively simpler rollout than tall towers with antennas. The backhaul connectivity is done through existing copper wires. Alternatively, a mesh network with high-speed fibre links at just the grid‘s corner can be used. The networks equipped with mesh metro-femto arrangements have a data transfer capacity of 3Gbps per square kilometre. Operators can use a similar strategy to increase their existing capacity of cell sites. Recalibration of the parameters in each of the cell sites affecting capacity can be done to obtain optimal performance. Additional hardware, such as baseband processors, can be installed at cell sites to obtain optimal performance from each of the radio carriers, as initial deployments generally use less hardware to reduce costs. Additional radio carriers can also be installed at each of the cell sites with high data traffic in the case of 3G networks, as initial networks typically use only single carriers. This approach has already been adopted by selected MNOs and they have deployed two radio carriers (and three in some cases). Sectorisation can also increase cell site performance. In this instance, the data transmission is spatially separated from each cell site into three or six sectors, and each sector is independently capable of the full capacity of a single cell. Efficiency can be further bolstered by using techniques such as Multiple Input Multiple Output (MIMO) to introduce spatial diversity. However, it requires additional physical antennas at each cell site for support. In some countries, buying additional spectrum is a further option available to operators for handling the pressure from increasing mobile data traffic – as some governments are making additional spectrum available. For example, 3G spectrum was auctioned in India in April 2010. In a similar move, spectrum reserved for other purposes has been freed to make it available to the MNOs. For example, in 2008 the Federal Communications Commission (FCC) in the US started auctioning digital TV spectrum; now, its current plan is to transfer 40 percent of the TV spectrum from broadcasters to MNOs. However, spectrum acquisition is one of the most expensive strategies, as – being a finite resource – governments expect to squeeze the absolute maximum from spectrum licence fees. Rollout of new technologies, such as Long Term Evolution (LTE), is another investment scenario for operators wishing to reduce mobile data traffic on their network. With higher spectral efficiency and data transfer rates, LTE is being viewed as the most promising solution for operators. It is also cheaper for operators in the long run, as LTE requires fewer cell sites to deliver the same payload. Such associated benefits have seen 218 operators in 81 countries commit to investing in LTE. Of these, 166 have committed to commercial LTE deployments, while 52 have announced pre-trials. In early July 2011, 24 operators had already deployed commercial LTE networks in Austria, Denmark, Estonia, Finland, Germany, Hong Kong, Japan, Lithuania, Norway, the Philippines, Poland, Singapore, South 126 © 2011, Portio Research. All Rights Reserved In some countries, buying additional spectrum is a further option available to operators for handling the pressure from increasing mobile data traffic – as some governments are making additional spectrum available.
  • Mobile Data Usage Trends 2011-2015 Korea, Sweden, the US and Uzbekistan. However, this type of rollout can face local hindrances, such as allotment of spectrum and regulatory restrictions. Additional antennas supporting MIMO will be required at each cell site, which may not always be possible due to the physical restrictions of a particular cell site. RF transmission power limits for cell sites may also be exceeded at places where 2G, 3G and LTE are simultaneously used. Hence LTE rollouts also need to be carefully analysed and planned. All of the strategies and investment options available to the operator community have their own pros and cons. Depending on factors such as a cost/benefit analysis, the impact on subscribers, the time required, and the marketing strategy utilised, MNOs may use a combination of these strategies. © 2011, Portio Research. All Rights Reserved 127
  • Mobile Data Usage Trends 2011-2015 Chapter 7 Summary and Conclusions 128 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Summary and Conclusions Mobile data services have been on the radar of the MNO community for quite some time. To cultivate a competitive edge and distinguish themselves from rival providers, especially in the saturated mobile markets of developed nations, MNOs have typically gone all-out to popularise their network capabilities for handling subscribers‘ data needs. 3G and above network deployments worldwide are testament to the general readiness of mobile operators to handle the existing and expected mobile data traffic pressure on their networks. The growth in mobile data traffic is stupendous, and where subscribers previously limited data usage to messaging, they are now devouring mobile data via mobile applications, mobile Internet, online gaming, social networking, video streaming and online content – to name just some of the means of data consumption. For this report, we conducted a survey in six markets – the UK, China, India, the US, Chile, and the UAE – to analyse the extent of mobile data usage, and to get a read on the habits of a typical user within these countries. Respondents within this survey pool highlighted high subscriber spending on mobile data services and applications. The figure below depicts the spending on non-voice services as a percentage of total mobile spend in the surveyed six countries. Percentage of Total Mobile Spend Figure 111: Non-voice Spend as a Percentage of Total Mobile Spend (In Percent, June 2011) 60 50 47.8 45.7 41.3 40 34.9 32.5 30 20 14.2 10 0 The UK China India The US Chile The UAE Country Source: Portio Research Ltd. The contribution of mobile data revenue to MNOs‘ total revenue is constantly increasing worldwide. In high data usage markets, such as Japan, the revenue from non-voice services has already surpassed that derived from voice – and based on the anecdotal evidence from our survey, both the UK and US could see a similar scenario emerge shortly. Perhaps unsurprisingly given their wider mobile ecosystems, these two developed markets (the UK and US) top the data set in the above figure, with China – again anecdotally – on their heels. While the UAE sees the lowest percentage of total spend used for data, it is important to keep in mind what that total spend actually constitutes. As our earlier case studies showed, just 6.9 percent of Chinese respondents have monthly spends exceeding USD 40; whereas 60 percent of those surveyed in the UAE have a monthly outlay of over USD 40. © 2011, Portio Research. All Rights Reserved 129 The growth in mobile data traffic is stupendous, and where subscribers, previously limited data usage to messaging, they are now devouring mobile data via mobile applications, mobile Internet, online gaming, social networking, video streaming and online content – to name just some of the means of data consumption.
  • Mobile Data Usage Trends 2011-2015 The table below highlights users‘ top five mobile activities (by frequency of use) in each of the surveyed countries. Table 37: Top 5 Mobile Activities in the Surveyed Countries (June 2011) Rank The UK China India The US Chile The UAE 1 Messaging (SMS and MMS) Messaging (SMS and MMS) Voice Calling Messaging (SMS and MMS) Voice Calling Messaging (SMS and MMS) 2 Voice Calling Voice Calling Messaging (SMS and MMS) Voice Calling Messaging (SMS and MMS) Voice Calling 3 E-mail Reading News/eBooks Social Networking E-mail E-mail E-mail 4 Social Networking Instant Messaging Music and Radio Streaming Social Networking Social Networking Social Networking 5 Gaming Mobile Search Gaming Locationbased Services Gaming Gaming Source: Portio Research Ltd. We know that in the recent past there has been a seismic shift within the mobile data space that now sees mobile users expect access to a vast range of previously-extraordinary services to come more or less as standard, and – as discussed – this has wide-reaching ramifications (for network type, mobile devices etc). So it will come as some relief to operators, albeit tempered, that the traditional stalwarts of revenue generation for MNOs – voice and messaging (SMS and MMS) – top the list of mobile activities, in all regions. While of course with user-led surveys of this nature there will inevitably be a degree of distortion, filtered in the above manner our findings furthermore suggest that most people, in most countries still primarily and tellingly use their phones for communication purposes. Without question, games and streaming video/audio are highly popular offerings, but chat and messaging services – including those newer variations: e-mail, instant messaging and social networking – are evidently dominant. Returning to that earlier revenue assertion, the full-balanced usage picture naturally only emerges when this data is aligned with the time-spent by users on each available data service. Clearly, the fluctuating durations that users may be tying up a network with potentially bandwidth-heavy enhanced data services have varied knock-on effects on network performance. The table on the next page compares the average time spent on various activities via mobile per day across the six surveyed countries. 130 © 2011, Portio Research. All Rights Reserved The traditional stalwarts of revenue generation for MNOs – voice and messaging (SMS and MMS) – top the list of mobile activities, in all regions.
  • Mobile Data Usage Trends 2011-2015 Table 38: Average Time Spent on Various Activities via Mobile per Day (In Hours, June 2011) Activity The UK China India The US Chile The UAE Voice Calling 0.89 0.91 1.52 0.95 0.96 0.72 Social Networking 1.32 1.02 1.05 1.34 0.88 1.21 Video Streaming 0.64 0.51 0.38 1.15 0.19 0.22 Gaming 0.34 0.45 0.55 0.61 0.27 0.28 Messsaging 0.15 0.14 0.13 0.22 0.04 0.06 News and Web Surfing 1.14 1.41 1.25 1.41 1.36 66 2.54 Source: Portio Research Ltd. The figure below is the graphical representation of Table 38 above. Figure 112: Average Time Spent on Various Activities via Mobile per Day (In Hours, June 2011) Average time spent via mobile phone (In Hour) 3.0 2.5 2.0 1.5 1.0 0.5 0.0 Voice Calling Social Networking The UK China News and Web Surfing India Video Streaming The US Gaming Chile Messaging (SMS and MMS) The UAE Source: Portio Research Ltd. Qualifying the rationale at the time, an earlier observation in this report noted that, as a general rule, instances of data demand outstripping network capacity is an evolutionary curse presently bestowed upon MNOs in developed markets only. But things can change. And while no one can say for certain how soon change will come, the fast pace of innovation within the mobile space and the increasing affordability of advanced handsets leaves room for only relative certainty at best. 66 Note: For China, the figure refers to average time spent on reading news and eBooks via mobile phone. © 2011, Portio Research. All Rights Reserved 131
  • Mobile Data Usage Trends 2011-2015 The innovative and new league of mobile applications has attracted millions of users worldwide and has given rise to increased data usage, as more and more functionalities are added to mobile handsets via these add-ons. By the end of 2011, annual worldwide application downloads are projected to reach 18.4 billion. The table below shows the top five mobile application categories used by mobile users in the six countries surveyed for this report. By the end of 2011, annual worldwide application downloads are projected to reach 18.4 billion. Table 39: Top 5 Mobile Applications in the Surveyed Countries (June 2011) Rank The UK China India The US Chile The UAE 1 E-mail Instant Messaging Social Networking Games Social Networking E-mail 2 News and Info Games Games Social Networking E-mail Social Networking 3 Social Networking News and Info E-mail News and Info News and Info Games 4 Games Social Networking Locationbased Services Locationbased Services Games News and Info 5 Mobile Commerce E-mail Video Streaming Mobile Commerce Mobile VoIP Photo and Video Sharing Source: Portio Research Ltd. From the table above, it can be seen that social networking and games are the most preferred mobile applications worldwide, although surveyed users as a whole still retain a substantial communications-focus within their apps portfolio. While mobile gaming has origins as far back as 1997 when ―Snake‖ was released on the Nokia 6110, social networking via mobile is comparatively nascent. Presently, the total number of subscriptions to social networking websites is more than 10 billion, which is mind-blowingly more than the world‘s population (on account of users subscribing to multiple websites). With the arrival of mobile versions of such sites and associated mobile apps, their popularity has further increased due to the ease of access. The next figure compares the average time spent daily by mobile users on social networking through their mobile phones, in the six countries profiled. 132 © 2011, Portio Research. All Rights Reserved Social networking and games are the most preferred mobile applications worldwide, although surveyed users as a whole still retain a substantial communications-focus within their apps portfolio.
  • Mobile Data Usage Trends 2011-2015 Figure 113: Average Time spent on Social Networking via Mobile Phone per Day (In Hours, June 2011) 1.5 1.34 1.32 Average Time Spent (In Hours) 1.21 1.02 1.05 1.0 0.88 0.5 0.0 The UK China India The US Chile The UAE Country Source: Portio Research Ltd. The increasing popularity of social networking, the availability of a massive range of mobile applications, and the evolution of highly capable smartphones have contributed significantly towards the growth of mobile data usage. MNOs‘ complementary efforts to underpin this rising usage trend by providing high-speed networks have further bolstered mobile data consumption. The MNO community is investing significantly in network upgrades and efficient data traffic management in an attempt to further popularise mobile data usage to counter their falling voice ARPUs. However, as supporting data forecasts in the earlier ‖Market Size‖ chapter demonstrated, the growth in mobile data traffic will be widely disproportionate to the increase in data revenues. While mobile data traffic is presently expected to soar at a CAGR of 91.2 percent for the period 2010-2015, mobile data revenues are expected to grow at a meagre CAGR of just 13.2 percent in the same period. The figure on the next page compares the mobile data traffic and mobile data revenue growth, in year-on-year terms. There is a kink in the 2010 figure for mobile data revenue growth due to the sudden increase in smartphone and mobile data service usage. © 2011, Portio Research. All Rights Reserved 133 While mobile data traffic is presently expected to soar at a CAGR of 91.2 percent for the period 2010-2015, mobile data revenues are expected to grow at a meagre CAGR of just 13.2 percent in the same period.
  • Mobile Data Usage Trends 2011-2015 Figure 114: Y-o-y growth of Mobile Data Traffic and Mobile Data Revenue – Worldwide (In Percent, 2009 – 2015F) Y-o-y Growth (In Percent) 200 175.8 154.0 160 120 103.0 94.6 91.0 86.1 81.4 80 40 32.3 18.2 12.7 15.2 12.7 12.0 8.3 2011F 2012F 2013F 2014F 2015F 0 2009 2010 Year Mobile Data traffic Mobile Data Revenue Source: Portio Research Ltd. F – Forecasted The slow growth of mobile data revenue arose from MNOs‘ initial approach of introducing unlimited, flat rate plans to promote mobile data. While these contributed to revenue growth for MNOs at the outset, they left little scope to offer plans which could incrementally drive revenue growth. Furthermore, such unlimited plans led to an increase in costs to handle the mobile data traffic generated, clipping down MNOs‘ margins. To overcome this, MNOs need to further monetise mobile data usage. Tiered pricing is one upcoming strategy to meet this objective. New business models such as real-time charging and policy management capabilities need to be leveraged to monetise real-time mobile users and ensure network control. This will enable MNOs to optimise network asset utilisation while creating new revenue streams and providing a personalised experience to mobile users. There is a need to explore other charging models beyond the traditional prepaid and post-paid models to provide more choice, flexibility and customisation for mobile users, and fuel new revenue creation for operators. Application-aware data charging can also be implemented. MNOs are trying out different strategies to handle the mounting mobile data traffic pressure on their networks. Wi-Fi and femtocell offloading, mesh metro-femto arrangements, sectorisation and the use of admission control are some of initiatives being used. In closing, based on both worldwide and regional data forecasts, as well as the country-level mobile data usage trends observed in our survey, it can be said that mobile data traffic is growing and will certainly continue to do so. MNOs need to accordingly invest to enhance their networks to avoid congestion, based not just on the current usage trends of their subscriber bases but also – as best they reasonably can – based on anticipated future trends. At the same time, they need to take appropriate measures to monetise this excessive mobile data usage to drive revenues and profits. 134 © 2011, Portio Research. All Rights Reserved Wi-Fi and femtocell offloading, mesh metro-femto arrangements, sectorisation and the use of admission control are some of initiatives being used by MNOs to handle the mounting mobile data traffic pressure on their networks.
  • Mobile Data Usage Trends 2011-2015 Chapter 8 Appendices © 2011, Portio Research. All Rights Reserved 135
  • Mobile Data Usage Trends 2011-2015 Appendices This market study has been written in a way that avoids excessive use of market acronyms (except where appropriate) and industry technical talk, as we have tried to keep the text open to all readers, not just those with in-depth knowledge of the world‘s mobile markets. Because this study covers all geographical regions and many emerging markets, a great deal of the data contained within this study will potentially be of interest to investors, financial analysts, consultants, venture capitalists and others all around the world who do not work within the mobile industry itself every day of their lives. To many of these people, some of the industry technical talk and acronyms may be confusing, so we have attempted to write this study in a self explanatory way that assumes little prior knowledge, but in doing this, some of the speech chosen may seem somewhat "obvious" to our more knowledgeable readers. We hope this offers the best possible solution to everyone, and we hope this does not cause any confusion or inconvenience. Where we have used technical terms or acronyms, we offer an explanation of those expressions below. 136 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Glossary 2G or Second Generation Packet Data Networks The second-generation packet networks recently introduced consist of combined voice and packet data networks based on global standards. 2.5G 2.5G describes the state of wireless technology and capability usually associated with General Packet Radio Services (GPRS) - that is, between the second and third generations of wireless technology. The second generation or 2G-level of wireless is usually identified as Global System for Mobile (GSM) service and the third generation or 3G-level is usually identified as Universal Mobile Telecommunication Service (UMTS). Each generation provides a higher data rate and additional capabilities. There is also a fourth generation (4G) of technology in the planning and research stages. 2.5G protocols extend 2G systems to provide additional features such as packet-switched connection (GPRS) and enhanced data rates (HSCSD, EDGE). 3G or third generation 3G is an International Telecommunication Union (ITU) specification for the third generation (analog cellular was the first generation and digital PCS 67 was the second generation) of mobile communication technology. Third generation Wireless Wide Area Networks (WWAN) communication systems are characterised by high-speed data rates (144 Kbps68 to 2+ Mbps69) suitable for multimedia content. 3G technologies typically are packet-switched and use Code Division Multiple Access (CDMA) technology to communicate. Examples of 3G include EDGE 70, 1xRTT, HDR and W-CDMA.71 3G protocols in mobile telephony support higher data transmission rates, measured in Mbps, intended for applications other than voice. 3G support broadband and bandwidth applications, such as full-motion video, video conferencing and Internet access. 3G as a Percentage 3G as a percentage refers to 3G subscribers as a percentage of total active mobile subscribers in a country. This represents the proportion of 3G subscribers in the total mobile subscriber base of a country. 3G Penetration 3G penetration refers to 3G subscribers as a percentage of total population of the country. This is similar to the term ‗mobile penetration‘, which means total number of active mobile subscribers in a country as a percentage of total population of the country. 4G or fourth generation 4G or fourth generation WWAN communication systems are characterised by high-speed data rates at 20+ Mbps, suitable for high-resolution movies and television. The initial deployment of 4G communication systems is expected in 2006-2010. The proposed features of these systems include 100 Mbps speed, location sensing and self-tailoring to user needs. A2P Application-to-Peer: In the mobile messaging world A2P messages are defined as messages generated by an application and sent to subscribers, for example, the advertisements sent through SMS/MMS on subscribers‘ handsets. 67 Personal Communications Service (PCS) Kilobits per second (Kbps) 69 Megabits per second (Mbps) 70 Enhanced Data for Global Evolution (EDGE) 71 Wideband Code Division Multiple Access (W-CDMA) 68 © 2011, Portio Research. All Rights Reserved 137
  • Mobile Data Usage Trends 2011-2015 AAC Advance Audio Coding: It is an advanced audio compression algorithm used for downloading music files, streaming video, audio and satellite-radio applications. Admission Control Admission control is the means for controlling mobile data traffic at times of overload. Admission control finalises the data calls that have to be accepted in the network to maximise revenues, while maintaining QoS for all the other services. Application Programming Interface (API) It is an interface implemented by a software program to communicate with other software. Operating systems and applications use API to determine the way to call or send requests to other software. Associated Companies Associated Company is defined as a company in which the MNO Group/MNO has a stake of less than 51 percent but does not consolidate the associate‘s financial statements. Augmented Reality (AR) Augmented reality is the superimposition of virtual content over the real time environment. Virtual content includes digital graphics, audio and other sense enhancements, which are augmented to the real world by an AR device. Average Revenue per User (ARPU) Measures the average monthly revenue generated for each customer unit, such as a handset or pager that an operator has in operation. Backhaul It refers to the process of transmitting voice and data traffic from a remote site to a central site. BREW Binary Runtime Environment for Wireless: It is an application development platform developed by Qualcomm. It enables wireless users to download and run applications, such as enhanced e-mail, location positioning, games, etc., to BREW-enabled handset. BREW was first introduced and developed for CDMA handsets, but it now supports GSM/GPRS and UMTS handsets as well. BTS Base Transceiver Station: It is the equipment that facilitates the wireless communication between user equipment such as mobile handsets, computers etc., and the mobile network. Broadcast Technologies for Mobile TV Some of the broadcast technologies for mobile TV worldwide are: DVB-H (Digital Video Broadcast – Handheld): DVB-H technology allows simultaneous broadcast of television, video and radio channels on mobile, and helps operators to preserve network bandwidth for other data and voice services. It has been accepted as the standard by the European Telecommunications Standards Institute (ETSI). Integrated Mobile Broadcast (IMB) It is a 3GPP Release 8 Standard that empowers MNOs to offer Multimedia Broadcast Multicast Services in a spectrally efficient manner in the 3G TDD bands. It is deployed with existing 3G FDD unicast technology. 138 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 ISDB-T (Integrated Services Digital Broadcast – Terrestrial): It is the transmission standard that has been developed in Japan to help the radio and television stations support digital content. DMB (Digital Media Broadcast): It is a transmission standard, which transmits video feed via satellite (S-DMB) or terrestrial (T-DMB) mode. The standard is currently deployed in Korea and is being increasingly used in other parts of Asia as well as Europe. MBMS (Multimedia Broadcast/Multicast Service): This standard allows the transmission of multimedia content over the UMTS and GSM network. BWA Broadband Wireless Access: It is a form of fixed wireless access system. Byte Byte is a collection of bits in which each bit can take a value of either 1 or 0. Kbps, Mbps and Gbps denote the number of bytes transferred per second; Kbps, Mbps and Gbps translate to 103, 106 and 109 bytes per second respectively. CAPEX Capital Expenditure: It refers to the cost of developing a product or system. CDMA Code Division Multiple Access: In a CDMA system, each voice circuit is labelled with a unique code and transmitted on a single channel simultaneously along with many other coded voice circuits. The receiver uses the same code to recover the signal from the noise. CDMA2000 1x CDMA2000 1x: This is regarded as the first phase of CDMA2000 technology used for providing voice and data services over mobile networks. Data speeds of 307kbps are using a single channel while with two channels speeds of 614kbps are possible. Churn Rate It is the rate at which the subscribers cancel their subscription with the existing operator and sign up with another operator. Cloud Computing Cloud computing is a technology involved in delivering hosted services on the Internet. It is based on client-server architecture, which includes user device with applications (such as Web browsers) to access the back end (various components, such as data storage devices, servers, etc.). The back end components perform specific tasks and interact with each other through standard application programming interfaces. Desktop Penetration Desktop penetration refers to the number of desktops (PCs) as a percentage of the total population of the region. Dongle Dongle is a portable device which is connected to a laptop or desktop and resembles a USB flash drive. It is widely used as a wireless broadband adapter. DRM Digital Rights Management: It refers to a set of technologies used for the administration of digital content. It authorises the nature and restricts the frequency of the usage based on the administrative policy settings. It sustains the revenue of the mobile network operator by regulating the usage of content at end user. © 2011, Portio Research. All Rights Reserved 139
  • Mobile Data Usage Trends 2011-2015 DSL Digital Subscriber Loop: It is a technology that provides digital data transmission over the copper lines of a PSTN network. Dumb Pipes Dumb pipe refers to a mobile operator‘s wireless network being used only to transfer data/bytes between the Internet and the user‘s device. For an operator being a dumb pipe, there is a potential loss of revenue for the operator, since the operator is generating revenue only for the network data access and is not receiving any significant share in data/content service revenue. E-UTRA Evolved Universal Terrestrial Radio Access (E-UTRA) was used in the 3rd Generation Partnership Project‘s (3GPP) early drafts of LTE specification for Evolved UMTS Terrestrial Radio Access Network (eUTRAN). It is the air interface of the LTE network which will replace the earlier technologies like UMTS, HSDPA, HSUPA for radio access network. It uses orthogonal frequency-division multiplexing (OFDM), multiple-input multiple-output (MIMO) antenna technology for downlink to support more users, higher data transfer rates and lower power requirement for the handsets. For uplink, OFDM and Single Carrier Frequency Division Multiple Access (SC-FDMA) is used depending on the channel to compensate for high peak to average power ratio associated with normal OFDM. This facilitates the key features of high data transfer rates, low latency and optimisation for packet data. EDGE Enhanced Data rates for Global Evolution: An enhanced modulation technique designed to increase network capacity and data rates in GSM networks. EDGE should provide data rates up to 384 Kbps. EDGE will let operators without a 3G license compete with 3G networks offering similar data services. EV-DO Evolution Data Only, Evolution Data Optimised: It is a wireless radio broadband data protocol being adopted by many CDMA operators. It is being used as a part of CDMA2000 networks in Japan, Korea, the United States and Canada. It provides better data speeds in comparison to GSM technologies such as GPRS and EDGE. FDMA Frequency Division Multiple Access is a channel access protocol that allows a user dedicated allocation to single or multiple frequency bands. Feature Phone Feature phones are handsets with browsers (primarily based on embedded J2ME and BREW platforms) to enable access to web based e-mail, and sometimes have embedded applications for social networking, instant messaging (IM) and mobile banking. These phones often come with high resolution cameras, GPS and innovative multimedia features. The major differentiating factor between a smartphone and a feature phone is that feature phones do not have an open Operating System (OS). The OS present in smartphones, through its Application Programming Interface (API), enables subscribers to install and remove third-party applications. Smartphones are better integrated with the handset's User Interface than Java applications. Femtocell Femtocell is a small cellular base station that operates in licensed spectrum and is controlled by the operator. It uses DSL or cable connection for backhaul. It is deployed with the aim of improving indoor coverage for domestic or small business use. 140 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Free Float Free Float refers to the shares of a company that are available to the investing public and are freely traded in the market. It excludes shares held by founders, directors, acquirers, bodies with a controlling interest, promoters‘ holding and government holding. Freemium Freemium is a strategy adopted by application stores in which trial or lite versions of premium apps are offered for free or for a small charge; and users have an option to upgrade the apps with additional features by paying additional charges. Gbps Please see ―Byte‖. GPRS General Packet Radio Service (GPRS) is a packet-based standard for mobile communication, which runs at speeds up to 115 kilobits per second, compared with GSM systems' 9.6 kilobits per second. GPRS supports a wide range of bandwidths and makes efficient use of limited bandwidth. It is particularly suited for sending and receiving small bursts of data, such as e-mail and web browsing, as well as large volumes of data. Applications for GPRS may include any of the following: chat, text and visual information, still images, moving images, web browsing, document sharing/collaborative working, audio, job dispatch, corporate e-mail, Internet e-mail, vehicle positioning, remote Local Area Network (LAN) access, file transfer or home automation. GSM Global System for Mobile communications, the most widely used digital mobile phone system and the mobile telephone standard in Europe. It was originally defined as a panEuropean open standard for a digital cellular telephone network to support voice, data, text messaging and cross-border roaming. GSM is now one of the world's main 2G digital wireless standards. GSM is present in more than 160 countries and according to the GSM Association, accounts for approximately 70 percent of the total digital cellular wireless market. GSM is a time division multiplex (TDM) system. Implemented on 800, 900, 1800 and 1900 MHz frequency bands. GUI Graphical User Interface (GUI) is the front-end interface and navigation design of an application. This includes standard formats for representing text and graphics. GUIs have become the standard ways for interaction between users and digital devices. HARQ Hybrid Automatic Repeat Request is a process of ensuring data transmission even in poor signal conditions with an adverse effect of lowering the throughput in better signal conditions. It does so by error-correction in addition to error detection in the transmitting bits. HSPA High Speed Packet Access comprises two mobile protocols: High Speed Downlink Packet Access (HSDPA) and High Speed Uplink Packet Access (HSUPA). These protocols enhance the performance of WCDMA protocols. HTML Hyper Text Mark-up Language: It is a syntax based language used for designing web pages. The content of HTML, written in standard syntax, when opened in a web browser takes the form of Web page. The nascent version of HTML was used with easy syntax rules in comparison to existing HTML and MHTML versions of it. In recent times, the official © 2011, Portio Research. All Rights Reserved 141
  • Mobile Data Usage Trends 2011-2015 standards of World Wide Web recommend Web developers to use XHTML 1.1, XHTML 1.0 and HTML 4.01 versions. i-mode i-mode is a proprietary packet-based information service for mobile handsets. It delivers information (such as mobile banking, and train timetable) to handsets and enables exchange of e-mail from mobile handsets on the PDC-P network. Launched in 1999 by NTT DOCOMO, i-mode is very popular in Japan (especially for e-mail and transfer of icons). IMPS IMPS (Instant Messaging and Presence Service) is an instant messaging system designed for mobile environments. Presence refers to the availability of a user for communication. IMS IMS IP Multimedia Subsystem is an extension of the GSM / 3GPP GPRS core Network. It uses SIP (Session Initiation Protocol) to set up, maintain and terminate packet-switched voice and multimedia sessions. Interoperability This is defined as the ability of a network to operate with other networks, such as two systems based on different protocols or technologies. In-app Payment In-app payment is the payment made by mobile user to get privileged features, services or digital goods while using mobile apps. The privileged feature may be moving from a free or lite version of an app to the full version. Instant Messaging (IM) Instant Messaging is an Internet-based service that alerts users when their friends or colleagues are online and allows them to communicate with each other in real-time through private online chat areas. With instant messaging, users create a list of other users with whom they want to communicate. When a user from their list is online, the service alerts them and enables an immediate contact with the other user. While instant messaging has primarily been a proprietary service offered by Internet service providers such as AOL and MSN, businesses are starting to employ instant messaging to increase employee efficiency and make expertise more readily available to employees. Intranet The intranet is a private network inside a company or an organisation, and uses software similar to that used on the Internet. Companies use intranets to manage projects, provide employee information, distribute data and information, etc. J2ME Java2, Micro edition: The Micro Edition of the Java 2 Platform provides an application environment that specifically addresses the needs of commodities in the vast and rapidly growing consumer and embedded space, including mobile handsets, pagers, personal digital assistants, set-top boxes, and vehicle telematics systems. Java A simple platform-independent object-oriented programming language used for writing applets that are downloaded from the World Wide Web by a client and run on the client's machine. Kbps Please see ―Byte‖. 142 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Key Interests In this report, Key Interests include the MNO Group‘s direct and indirect subsidiaries and joint ventures. KPI Key Performance Indicator (KPI) is a term used to indicate the key indicators to measure the business and operational performance of the companies in order to evaluate success and competitive position in the market. In the case of mobile companies, we use commonly used KPIs, such as Subscriber Addition, Market Share, ARPU, Churn Rate, etc. In addition, Revenue, Operating Profit and Number of Employees are other KPIs generally used to benchmark different companies. LTE Long-Term Evolution (LTE) is the standard being developed by 3GPP to achieve download rates of 100Mbps, and upload rates of 50Mbps for every 20MHz of spectrum and is termed as a 4G standard. LTE has support for bandwidths ranging from 1.25MHz to 20MHz. LTE Commitments LTE commitments cover announcements from service providers about conducting trials and deployments for LTE networks. LTE Deployments LTE deployments refer to the successful launch of LTE services in a market by a service provider. LTE Engagements LTE engagements refer to the collaborations between service providers and infrastructure vendors to conduct LTE trials and deployments. An LTE trial or deployment may consist of more than one engagement. For example, TeliaSonera selected Ericsson and Nokia Siemens Networks for its LTE roll-out in Norway. In this case, one LTE deployment accounted for two LTE engagements. LTE Subscriber Base as a Percentage of Total Mobile Subscribers LTE subscriber base includes the subscribers using LTE services through dongles and handsets. LTE subscriber base as a percentage of total mobile subscribers refers to the percentage of mobile subscribers who use LTE services. M2M Machine-to-Machine: M2M generally means the communication between machines. However, in the mobile world, it is sometimes defined as Mobile-to-Mobile, which basically refers to communication that involves only mobiles and not landlines. MAN Metropolitan Area Network is a computer network that normally encompasses a city or a big premise. It is formed by connecting several local area networks. Mbps Please see ―Byte‖. Megabyte 6 Megabyte translates to 10 bytes. Please see ―Byte‖ for further details. MiFi MiFi is a collection of wireless routers that are used as mobile Wi-Fi hotspots. The technology is developed by Novatel Wireless. © 2011, Portio Research. All Rights Reserved 143
  • Mobile Data Usage Trends 2011-2015 MIMO Multiple-Input and Multiple-Output refers to the use of more than one antenna at the transmitter and receiver end to enhance the communication process. Mobile Broadband Users as a Percentage A mobile broadband user as a percentage refers to mobile broadband users as a percentage of total active mobile subscribers in a country. This represents the proportion of mobile broadband users in the total mobile subscriber base of a country. MNO Mobile Network Operator. MNO market penetration It is the mobile subscriber base of an MNO expressed as a percentage of total population of the country of operation. Mobile E-Mail Penetration Mobile E-mail Penetration is described as mobile e-mail users (of the specified market or region) as a percentage of the specified market or region‘s mobile subscriber base. Mobile IM Penetration Mobile IM Penetration is described as mobile IM users (of the specified market or region) as a percentage of the specified market or region‘s mobile subscriber base. Mobile Internet Penetration Mobile Internet Penetration is described as mobile Internet users (of the specified market or region) as a percentage of the specified market or region‘s mobile subscriber base. Mobile penetration It is the mobile subscriber base in a country expressed as a percentage of its total population. Modem A modem is a device which modulates and demodulates analogue and digital signals for the transmission of signals over different carriers. MVNO Mobile Virtual Network Operator: Term used for a mobile operator who does not own its own spectrum and usually does not have its own network infrastructure. Instead, MVNOs have business arrangements with traditional mobile operators to buy minutes of use (MOU) for sale to their own customers. Native Apps Native apps are mobile applications developed specifically to run on a particular operating system or device. Near Field Communication Near Field Communication (NFC) is a wireless communication technology which uses shortrange high frequency to enable the exchange of data between devices in proximity with each other. The distance between the communicating devices has to be less than 10 centimetres. NFC-capable devices can communicate with smartcard readers as well as other NFC-capable devices. Node - B It is a term used in Universal Mobile Telecommunications System (UMTS) to refer to the Base Transceiver Station (BTS). 144 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 ODM An original design manufacturer (ODM) is a firm involved in designing and manufacturing a product according to specifications provided by another firm. The products are sold under the brand of the firm which gives the manufacturing contract to the ODM. OEM An original equipment manufacturer (OEM) is a firm which acquires a product (or a component) for reuse or incorporation into the products branded under its name. OFDMA Orthogonal Frequency Division Multiple Access is an advancement of Orthogonal Frequency Division Multiplexing to support mobile networks with more flexibility. Subsets of the subcarriers are assigned to individual users to facilitate multiple access. OMA-IMPS Open Mobile Alliance-Instant Messaging and Presence Service: It is an open mobile alliance enabler for instant messaging and presence. The first cut of this specification was developed by the Wireless Village consortium. OPEX Operating Expenditure: It refers to the ongoing costs for running or operating a product or system. OPhone OPhone is a mobile operating system developed by China Mobile. It runs on Linux kernel and is based on Google Android‘s Open Mobile System (OMS) operating system. Over-the-Top Services Over-the-top services refer to those services which are available to users over mobile networks without MNOs being involved in planning, provisioning and selling them. Packet Data Packet data is a method of transmitting information in small packets each containing a certain amount of the information. Packet data networks allow transmission of high-speed data to and from devices connected to the network. Packet Data is similar to dial-up Internet access available in homes or in businesses with cable modems, ADSL 72 lines, etc. P2P Peer-to-Peer: In the mobile messaging world, P2P messages are defined as messages exchanged between subscribers. These messages originate from and terminate to mobile subscribers‘ handsets. PDA Personal Digital Assistant: A portable computing device capable of transmitting data. This device makes possible services such as paging, data messaging, electronic mail, computing, facsimile, date book and other information handling capabilities. Petabyte 15 Petabytes translate to 10 bytes. Please see ―Byte‖ for further details. PIM Personal Information Manager: Also known as a "contact manager," is a form of software that logs personal and business information, such as contacts, appointments, lists, notes, occasions, etc. 72 Asymmetric Digital Subscriber Line (ADSL) © 2011, Portio Research. All Rights Reserved 145
  • Mobile Data Usage Trends 2011-2015 Proportionate Subscribers An MNO Group‘s proportionate subscriber base is based on its equity stake in its subsidiaries, joint ventures and associated companies. In the case of an MNO being operational in only one country, its proportionate subscriber figure is the same as its total customer base. QoS QoS stands for quality of service. RAN Radio Access Network: It is a component that exists between the mobile handset and the core network. It performs the radio functionality of the network and provides connection to the core network. RFID Radio frequency identification (RFID) denotes a system employed to convey a unique serial number using radio waves. It does not require contact or line of sight for communication. An example of the deployment of this technology is in electronic toll collection using RFID tags. SC-FDMA Single-carrier frequency-division multiple access (SC-FDMA) facilitates multiple access schemes and is used for assigning multiple users to a shared communication resource. While in OFDMA, subsets of the subcarriers are assigned to individual users to assist multiple access schemes, SC-FDMA enables a single-carrier transmission scheme. SDK Software Development Kit is a set of tools used for the development of an application for a software package. Service Revenue Service revenues are the revenues earned by MNOs through the provision of services only, i.e. revenues after deducting revenues earned from sales of equipment/products. Sectorisation It is a process by which a base station divides its coverage area into sectors by the use of directional antennas. This helps in increasing the coverage area of the base station and also avoids the interference caused by the data signals converging at the base station. SIM card It is a smart card that gives GSM handset its user identity. The card is inserted into a GSM/TDMA or GSM-only mobile handset containing subscriber-related data. The card contains 18 digits code for GSM markets and 20 digits code for TDMA markets. SIM Toolkit Subscriber Identity Module Application Toolkit: It is used by network operators to provide a user friendly interface on a subscribers‘ handset to access value-added services provided by them. These applications also provide a mechanism for storing and using any service specific parameters. These applications are built within a SIM card by mobile network operators. SIMPLE SIMPLE (Session Initiation Protocol for Instant Messaging and Presence Leveraging Extensions) is an open standard instant messaging (IM) protocol. 146 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 SIP Session Initiation Protocol or SIP is a standard multimedia and telephony protocol for initiating an interactive user session over mobile networks. The services under SIP may include call forwarding, number delivery, authentication and other telecoms applications. Smartphone A smartphone is a mobile handset which runs on operating system (OS) software and offers some of the capabilities of a PC. It provides a standardised interface and platform for application developers and is enabled with advanced features, such as e-mail, Internet and an e-book reader. Some of the other features expected from a smartphone include built-in full keyboard/external USB keyboard, powerful microprocessors, memory, built-in modem and large screens. The major differentiating factor between a smartphone and a feature phone is that an open Operating System (OS) is present in a smartphone. The OS, through its Application Programming Interface (API), enables subscribers to install and remove thirdparty applications. Smartphones are better integrated with the handset's User Interface than Java applications. Smartphone Penetration Smartphone penetration is described as smartphone users (of the specified market or region) as a percentage of the specified market or region's mobile subscriber base. SMS TV This is defined as the use of SMS for variety of applications, such as voting, teletext chat for TV programmes. SMSC Short Message Service Centre (SMSC) provides the routing of all SMS or text messages in any mobile network. Similar to e-mail server, the SMSC handles large volumes of messages sent between two mobile handsets or a mobile handset and a software application. Spectrum Allocation The use of radio frequency electromagnetic spectrum in a country is regulated by government bodies who then allocate spectrum to telecom companies. The license for using a particular spectrum is typically awarded following a bidding process. There are certain guidelines for using the allocated spectrum which service providers must adhere to — including a minimum quality of service, and roll-out timelines for the services for which the license has been issued. SS7 SS7 is a global standard for telecommunications defined by ITU Telecommunication Standardisation Sector (ITU-T). The standard defines the procedures and protocol by which network elements in the public switched telephone network (PSTN) exchange information over a digital signalling network to effect mobile (cellular) and wire-line call setup, routing and control. TDD Time Division Multiplex: This is a scheme for allowing simultaneous transmission and receiving of data at the same frequency, but with the different time slots allocated to them. TDMA Time Division Multiple Access: A TDMA channel is a single FDMA channel divided up in time into multiple time slots. TDMA system is able to transmit multiple voice circuits per channel. Three users can take it in turn to share one radio channel. The channels can vary in bandwidth and depending on the type of system, the time slots can transmit all or part of a voice circuit. Each user's speech is stored, compressed and transmitted as a quick packet, using controlled time slots to distinguish them-hence the phrase 'time division'. It uses 30 KHz channels and a vocoder rate of 8 Kbits/sec. At the receiver, the packet is decompressed. © 2011, Portio Research. All Rights Reserved 147
  • Mobile Data Usage Trends 2011-2015 TD-SCDMA Time Division Synchronous Code Division Multiple Access: It is an air interface used in UMTS mobile telecommunications networks. It has been deployed in China to replace WCDMA technology. Telecom Circle A telecom Circle is a mobile service area in India which is classified depending on its revenue and subscriber base potential. India is divided into 22 telecom Circles which are grouped into 4 categories - Metro, A, B and C Metro: Delhi, Mumbai, Kolkatta and Chennai A: Maharashtra, Gujarat, Andhra Pradesh, Karnataka and Tamil Nadu B: Kerala, Punjab, Haryana, Uttar Pradesh (East), Uttar Pradesh (West), Rajasthan and Madhya Pradesh C: Himachal Pradesh, Bihar, Orissa, Jammu and Kashmir, Assam, and North-East Thin Client Thin Client refers to a client computer or client software in client-server architecture networks. The primary purpose of Thin Client is to convey input and output between the user and the remote server. UMTS Universal Mobile Telecommunications System: This is the future transmission network for third generation mobile telephones, as defined by the International Telecommunications Union (ITU). In time, UMTS could reach transmission capacities of 2 Mbits/sec. (compared to 9.6 Kbits/sec. for GSM). Initially UMTS will offer rates of 144 to 384 Kbits/sec. This standard will make the development of new multimedia services having very wide bands and new uses, notably in the transmission of video, images and sound possible. UMTS FDD Universal Mobile Telecommunication System (UMTS) Frequency Division Duplex (FDD): It is designed to generate typical data transfer rates of up to 384 Kbps and is suitable for wide area coverage due to potentially high reach. UMTS TDD Universal Mobile Telecommunication System (UMTS) Time-Division-Depleting (TDD): UMTS TDD Mobile Broadband technology is a packet data implementation of the international 3GPP UMTS standard and is designed to work in a single unpaired frequency band. It is designed to generate typical data transfer rates of up to 2 Mbps. USB Universal Serial Bus is a specification used to initiate data transfer between devices and a host controller. USSD Unstructured Supplementary Service Data (USSD) is a standard for transmitting information over GSM networks. It is primarily used to access the information on prepaid balances and similar details. UTRA-FDD Universal terrestrial radio access–frequency division duplex (FDD) refers to paired frequencies in which the transmitter and receiver operate simultaneously but at different frequencies UTRA-TDD Time division duplex (TDD) refers to unpaired frequency which is shared between uplink and downlink data rates 148 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 VAS Mobile operators offer various services which are not part of the basic voice offer. These services are availed off separately by the mobile subscribers. It includes services such as SMS, MMS, mobile e-mail, mobile games, mobile music etc. These also include services such as WAP, voicemail, call diversion, etc. Vertical Devices Vertical devices are smartphones optimised to run mobile enterprise applications and are particularly useful for a mobile work fleet. These devices are designed to provide highbandwidth data collection and enable employees to access and update enterprise databases in a real-time environment. Aside from powerful processors, vertical devices are often enabled with capabilities such as a bar code scanner, digital camera, and two-way radio. Voice over Internet Protocol Voice over Internet Protocol (VoIP) is an Internet service which enables voice communication over IP network. This uses a set of communication and transmission protocols. WAP Wireless Advance Protocol: WAP is a specification for a set of communication protocols to standardise the way mobile devices, such as handsets and radio transceivers, can be used for Internet access. The WAP standard is based on Internet standards (HTML, XML and TCP/IP). It consists of a Wireless Markup Language (WML) specification, a WMLScript specification, and a Wireless Telephony Application Interface (WTAI) specification. The WAP protocol is the leading standard for information services on wireless terminals such as digital handsets. Some examples of WAP for accessing information include the following: checking train timings, purchasing tickets, flight check-in, viewing traffic information, checking weather conditions, looking up stock values, looking up phone numbers, looking up addresses or looking up sport results, and there are countless more. W-CDMA Wideband Code Division Multiple Access: The third generation standard offered to the International Telecommunication Union by GSM proponents. This is a 3G technology that increases data transmission rates in GSM systems by using CDMA instead of TDMA. W-CDMA has become the Direct Sequence mode in the ITU's 3G specification which includes the 1x Multi-Carrier mode (1x MC) and 3x Multi-Carrier mode (3x MC). 1x MC (formerly known as cdma2000) and 3x MC comprise the 3G upgrade paths for operators already using CDMA. WiBro Wireless Broadband: The technology was formulated by South Korean telecom industry as an equivalent to mobile WiMAX international standard. Wi-Fi Wireless Fidelity: It is used to provide wireless local area network through enhanced interoperability of the network. Services such as Internet, VoIP phone access, and gaming, etc., can be provided using Wi-Fi. WiMAX Worldwide Interoperability for Microwave Access: It is a telecommunication technology used for wireless data transfer over long distances through point-to-point links as well as mobile cellular type access. It is based on standards that are useful in wireless broadband access. © 2011, Portio Research. All Rights Reserved 149
  • Mobile Data Usage Trends 2011-2015 Wireless MAN Wireless Metropolitan Area Network: The technology is used to provide wireless network over a larger area as compared to local area network. WLL Wireless Local Loop: It refers to the wireless devices that are situated in fixed locations. The signal transmissions occur through the air and it provides connectivity to the users in remote and isolated areas without the need for laying new cables. 150 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Portio Research Classifications Geographical Regions: There is sometimes a difference in the way research firms classify the major geographical territories. At Portio Research, we follow 'obvious' geographical lines, but for the record, here are the regional definitions we follow, unless otherwise stated in the report: Western Europe: Standard classification includes Iceland and various islands Central and Eastern Europe: Includes standard list of Central and Eastern European countries, and the Baltic states, Balkans, Russia, Greece and Turkey Asia Pacific: Includes Australasia, the Indian Sub-Continent, Pakistan, Afghanistan, Sri Lanka, Maldives and the Former Soviet Union Central Asian republics North America: Standard classification, including Hawaii and islands to the North Latin America: Includes all South and Central American countries including Mexico, The Caribbean and The West Indies Middle East: Includes Israel and all Middle Eastern countries East of Egypt, South of Turkey and West of Afghanistan Africa: Standard classification includes territories in Western Indian Ocean Mobile Subscribers Generally, we count active SIMs, and we consider active as being used within 3 months, but, of course there is some room for variance, depending on what figures operators themselves publish or report to us when we interview them. When running spot-checks on operator numbers, we are governed by the figures they give us, and as we are all aware, many individuals and companies around the world count their subscribers/subscriptions by a number of different criteria. We refer to "total subscribers" for a network/country or globally, as a count of the total number of active subscriptions those networks have, and as such this can cause a slight distortion of any country-penetration rate. Currency and Monetary Values All monetary values quoted in this report are in US Dollars as the most widely recognised benchmark internationally. The currency conversion has been done on the year average basis. Whilst researching global mobile markets, we use http://www.oanda.com/ for all currency conversion calculations. © 2011, Portio Research. All Rights Reserved 151
  • Mobile Data Usage Trends 2011-2015 Companies Mentioned in this Report Company 3Italia www.tre.it Aircel www.aircel.com Alcatel-Lucent www.alcatel-lucent.com Alipay-Alibaba Group market.alipay.com Apple www.apple.com AT&T www.att.com Baidu www.baidu.com BBC News www.bbc.co.uk Bebo www.bebo.com Bharti Airtel www.airtel.in China Mobile www.chinamobileltd.com Claro www.clarochile.cl Coca-Cola www.coca-cola.com Du www.du.ae eBay www.ebay.com Elisa www.elisa.com Emol www.emol.com Entel www.entel.co.uk Ericsson www.ericsson.com Etisalat www.etisalat.ae Facebook www.facebook.com GetJar www.getjar.com Google www.code.google.com Hotmail www.hotmail.com Huawei www.huawei.com iaSolution Inc. www.iasolution.net Kaixin001 www.kaixin001.com KDDI www.kddi.com KPN www.kpn.com Layar www.layar.com LG World 152 Website www.lgmobile.com © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Company Website LinkedIn www.linkedin.com MasterCard www.mastercard.com MetroPCS www.metropcs.com Microsoft www.microsoft.com Movistar www.movistar.com MySpace www.myspace.com Nokia www.nokia.com Nokia Siemens Networks www.nokiasiemensnetworks.com NTT DOCOMO www.nttdocomo.com Orange( France Telecom) www.orange.com Renren Inc. www.renren-inc.com RIM www.rim.com Ruckus Wireless www.ruckuswireless.com Sina Weibo www.weibo.com SK Telecom www.sktelecom.com Skype www.skype.com SoftBank www.mb.softbank.jp Sony Ericsson www.sonyericsson.com Sumitomo Mitsui www.smbc.co.jp Taobao www.taobao.com Tata DOCOMO www.tatadocomo.com Telecom Italia www.telecomitalia.com Telefonica www.telefonica.com Tencent QQ www.tencent.com Terra www.terra.com T-Mobile www.t-mobile.com Twitter www.twitter.com Verizon Wireless www.verizonwireless.com Vodafone www.vodafone.com Yahoo www.yahoo.com Youku www.youku.com YouTube www.youtube.com © 2011, Portio Research. All Rights Reserved 153
  • Mobile Data Usage Trends 2011-2015 About the Authors Prasoon Sharma Prasoon Sharma is working as a Group Manager with Portio Research and Evalueserve. Over the past seven years, he has worked on various projects in the telecom domain. He post-graduated from IILM, India. He has been working with Portio Research and Evalueserve since December 2003. Radhika Goel Radhika Goel is working as a Senior Business Analyst with Portio Research and Evalueserve. She post-graduated in Business Management from IMI, India. She has been working with Portio Research and Evalueserve since April 2010. Sudhir Kumar Sudhir Kumar is working as a Senior Business Analyst with Portio Research and Evalueserve. He graduated from NIT Jalandhar, India. He has been working with Portio Research and Evalueserve since April 2010. John White John White has been Editor and contributing author for this report. John is Business Development Director for Portio Research and has over 18 years experience in the technical publishing industry. Working in the IT sector previously and in the telecoms industry for the last 11 years, John has extensive experience in the mobile sector. 154 © 2011, Portio Research. All Rights Reserved
  • Mobile Data Usage Trends 2011-2015 Also available from Portio Research Limited Portio Research Ltd is a UK-based research company focussing on the mobile space, providing reports, handbooks, directories and database products. New and Best Selling Reports include: Disruptive Mobile Applications and Services 2011-2015 With new forecasts and market sizing, the rapidly evolving worldwide mobile applications market is comprehensively reassessed in this exciting new market study – with particular focus on the current breed of hugely popular disruptive applications and services (Mobile Video Streaming, Social Networking, Mobile VoIP, Bulk Messaging Services, and Mobile Payments) and the threats and opportunities that they respectively present to mobile operators. With analysis also of app stores and app development, this 162-page report covers: YouTube, Facebook, Twitter, Skype, Angry Birds, MobiTV, Google+, Nimbuzz, SMS GupShup, Square, Bango, Boku, Apple App Store, Google Android Market, BlackBerry App World, Nokia Ovi Store, Windows Phone 7 Marketplace and much more. Please click here for more details. Mobile Network Operator Groups 2011 This essential new report comprehensively analyses the Top 30 MNO Groups Worldwide (as determined by proportionate subscriber bases at end-2010). Over 123 pages, with 109 supporting Figures and Tables, this great-value, text-light study delivers solid insight and data about these global leaders, and reappraises their success using differing KPIs – to see how rankings alter. The report also features detailed profiles of these 30 MNO Groups, with data points on: Total Revenue, Mobile Revenue, Net Profit, Employees, Key Interests, Brand Names, Ownership, Subscribers, Proportionate Subscribers, Market Share, Technology Deployments, Planned Upgrades, Recent Mergers, Acquisitions and Partnership Deals. Please click here for more details. Mobile Messaging Futures 2011-2015 The highly anticipated fifth edition of our best selling messaging report is now available to order. This new edition is packed with detailed market analysis, traffic and revenue forecasts and a brand new vendor survey. This massive 398-page market study gives you all the data you need for SMS, MMS, mobile e-mail and mobile IM markets worldwide, and includes a BONUS 26-slide Executive Summary presentation. With essential insight into a market that is forecast to be worth USD 335 billion by end-2015, this is one of the most detailed and popular reports ever written on the worldwide mobile messaging market. Please click here for more details. If you have any questions or if we can be of any assistance to you, please contact us by e-mail: info@portioresearch.com Copyright 2011. Portio Research Limited 2011 www.portioresearch.com © 2011, Portio Research. All Rights Reserved 155