Ibc Vas 2009 V1

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Draft of my presentation for the IBC Mobile VAS Forum 2009, Miami FL June 9-10 2009

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Ibc Vas 2009 V1

  1. 1. Mobile VAS Forum 2009 Finding Opportunities In A Year Of Economic Uncertainty Raúl Castañón
  2. 2. Agenda o Market segmentation analysis by ARPU and usage behavior in Latin America o Can operators generate more revenue from the low ARPU segment? o Understanding subscriber usage and opportunities of the low ARPU segment o How to adapt VAS offering using market segmentation and usage trends
  3. 3. Expected growth rate for 2009 for the Telecom equipment market, compared to the year before (IDATE).
  4. 4. Expected negative growth rate for 2009 for mobile phone shipments, compared to the year before (IDC).
  5. 5. Nortel will cut 3,200 positions on top of previous cuts, Nokia will cut another 1,700 jobs and Microsoft will cut 5% of its workforce over the next 18 months.
  6. 6. LATAM to grow at slowest pace in seven years LATINFOCUS expects Latin America to grow at the slowest pace in seven years. Industry analysts estimate wireless subscriber growth in 2009 to be between 5% (Yankee Group) and 8% (Moody's), down from double digit growth in previous years.
  7. 7. Operators face delayed investments, reduced CAPEX and slower growth rates. Pricing might be an option to grab new subscribers but in a year of economic hardship and with subscriber growth coming mainly from lower ARPU segments, price discounts can only get them so far.
  8. 8. Operators will limit CAPEX to maintain healthy cash flows. Since the region is still expected to grow in total number of subscribers, expanding capacity of existing network infrastructure will be their top priority.
  9. 9. Despite the downturn, some operators still expect 10% subscriber growth for 2009. With mobile penetration reaching saturation in major markets and slower growth rates this year, the only way they can achieve this is via churn from other operators.
  10. 10. Even as subscribers limit spending there are opportunities to generate revenue,. Opportunities can come from increased MOU or SMS, introducing SMS based services in countries with low voice usage or new data services where usage and ARPU show potential for rapid adoption.
  11. 11. Opportunity Map Latin America The chart above shows three key factors: (x) Average Monthly SMS; (y) MOU - Minutes of Usage; and ARPU - Monthly Average Revenue per User (bubble size) for the six largest markets in the region; Brazil, Mexico, Chile, Colombia, Venezuela and Argentina.
  12. 12. Opportunities can also be found in network productivity improvement. Some of these opportunities can be positioned as new services; this year operators will have limited resources but they cannot afford to miss opportunities to maintain or improve their position in the market.
  13. 13. There are still opportunities to generate more revenue from voice. Call Completion practices in Latin America focus on “B” party solutions: Voice Mail and Missed Call Alert. Slam down at voice mail or regulatory prompt in Latin America is ~ 70% - 80%.
  14. 14. Heavy Users 1% Mass Users 14% Non Users 51% Light Users 34% Voice Mail Revenue Generation Approximately 50% of voice mail subscribers generate no revenue but do generate significant traffic in the network. This does not include an additional ~30% of subscribers that are not provisioned in the voicemail system.
  15. 15. 70% 60% 50% 40% 30% 20% 10% 0% A B C D E F G SUBS % TOTAL Ch SOU % Voice Mail Revenue Generation Approximately 50% of voice mail subscribers generate no revenue but do generate significant traffic in the network. This does not include subscribers that are not provisioned in the voicemail system.
  16. 16. Can operators generate more revenue from the low ARPU segment? This segment includes a majority of young, prepaid subscribers that generate traffic but no significant revenue. Most calls end in slam down with no billable SOU.
  17. 17. Latin America Mobile Market Doing business in Latin America is becoming increasingly challenging; the region is incredibly complex and major players have consolidated their presence and gained negotiating power. Understanding the market and the specific needs of each country can help identify opportunities in Latin America, a market that is complex, fascinating and full of potential.
  18. 18. Raul Castanon http://telcolatam.blogspot.com/ http://www.linkedin.com/in/rcastanon

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