Mobile VAS Forum
2009

Finding
Opportunities
In A Year Of
Economic
Uncertainty
Raúl Castañón M.
Agenda

o Telecom Industry Outlook

   o Industry Trends

   o Latin America Market Outlook

o Finding Opportunities In A ...
Industry Trends
and
Latin America
Market Outlook
Expected growth rate for 2009 for the Telecom equipment market, compared to
the year before (IDATE). ABI Research forecast...
Expected negative growth rate for 2009 for mobile phone shipments, compared
to the year before (IDC).
Nortel will cut 3,200 positions on top of previous cuts, Nokia will cut another
1,700 jobs and Microsoft will cut 5% of it...
Mobile apps
and Smart
phones
will drive
growth in
2009.
Apple's AppStore reached 25,000 applications in March and is expec...
New
players will
benefit
from new
opportunities.

Traditional infrastructure vendors will continue to struggle through the...
Operators face
delayed
investments, re
duced CAPEX
and slower
growth rates.
Pricing might be an option to grab new subscri...
Operators
will limit
CAPEX to
maintain
healthy cash
flows.
Since the region is still expected to grow in total number of
s...
Despite the
downturn, some
operators still
expect 10%
subscriber
growth for 2009.
With mobile penetration reaching saturat...
LATAM To Grow At Slowest Pace In Seven Years
LATINFOCUS expects Latin America to grow at the slowest pace in
seven years. ...
Even as subscribers
limit spending
there are
opportunities
to generate
revenue,.
Opportunities can come from increased MOU...
There are still
opportunities
to generate
more
revenue
from voice.
Call Completion practices in Latin America focus on “B”...
Market
Segmentation
Analysis By ARPU
And Usage
Behavior In LATAM
Voice Mail Revenue Generation
Approximately 50% of voice mail subscribers generate no
revenue but do generate significant ...
Voice Mail Revenue Generation
Approximately 50% of voice mail subscribers generate no
revenue but do generate significant ...
Can
Operators
Generate More
Revenue From
The Low ARPU
Segment?
The Low ARPU
Segment
represents
approximately
half of total
subscribers.
This segment includes a majority of young, prepai...
Understanding
Subscriber
Usage And
Opportunities
Of The Low
ARPU Segment
Regulation
plays an
important role
in user
behavior.

The introduction of regulation prompt had a major impact in call
com...
Regulation also
impacts
technical
deployment of
solution.

Operators can play regulation prompt at the switch or use the v...
Voice Mail Revenue Generation
Busy/Unreachable – calling party tends to hang up and
redial. Ring No Answer - user might se...
Opportunities Of The Low ARPU Segment
Approximately 25% of subscribers bring in 95% of total
revenue. This means that 75% ...
How To Adapt
VAS Offering
Using Market
Segmentation
And Usage
Trends
User behavior can
be used to
segment the
market and define
the right service
for users.
VAS managers have followed the str...
A
                                               B



    Criteria
       - MCA for B party
       - MCA for A party (opti...
Incoming Call



                      No   30%
         Answer?


Yes   70%
                                       Yes   ...
100
Connected     70%    70
Not Connected 30%    30
 No Answer    15%    15
 Unreachable  10%    10
 Busy          5%     ...
Usage
Behavior   ARPU          Segment         Plan       Solution              Goal

                                    ...
Summary and Conclusions
By analyzing end user behavior, traditional services can be

repackaged and launched as new servic...
Raul Castanon
http://telcolatam.blogspot.com/
http://www.linkedin.com/in/rcastanon
http://latamtelecom.net/
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Mobile VAS Forum: Finding Opportunities In A Year Of Economic Uncertainty

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  • Despite Recession, Wireless Infrastructure CAPEX Should Grow in 2010.In the most pessimistic of three new ABI Research forecast scenarios, worldwide capital expenditure on wireless infrastructure should still post a year-over-year growth of 1.5% between 2009 and the end of 2010. The most optimistic of the three forecasts sees that CAPEX figure reach as much as 3.7% growth.
  • Sony Ericsson became the latest handset maker to jump on the app store bandwagon after detailing plans to sell applications via its PlayNow arena content and services platform.Following the unveiling of three new entertainment oriented devices, the handset maker announced it has partnered with mobile software developer GetJar to ensure its application store is readily stocked with a variety of titles when it launches. Sony Ericsson did not disclose when its app store is likely to open for business, but said it plans to allow developers to submit their own programs from 1 July. The PlayNow arena app store will initially be available in the 13 countries that already support the service, which is currently compatible with 38 Sony Ericsson models.Apple’s App store is pushing 3.5 million downloads a day on average and reached the one billion app download in April.
  • Mobile VAS Forum: Finding Opportunities In A Year Of Economic Uncertainty

    1. 1. Mobile VAS Forum 2009 Finding Opportunities In A Year Of Economic Uncertainty Raúl Castañón M.
    2. 2. Agenda o Telecom Industry Outlook o Industry Trends o Latin America Market Outlook o Finding Opportunities In A Year Of Economic Uncertainty o Market Segmentation Analysis By ARPU And Usage Behavior In LATAM 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 o Summary And Conclusions
    3. 3. Industry Trends and Latin America Market Outlook
    4. 4. Expected growth rate for 2009 for the Telecom equipment market, compared to the year before (IDATE). ABI Research forecasts 1.5% to 3.7% growth through the end of 2010.
    5. 5. Expected negative growth rate for 2009 for mobile phone shipments, compared to the year before (IDC).
    6. 6. 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.
    7. 7. Mobile apps and Smart phones will drive growth in 2009. Apple's AppStore reached 25,000 applications in March and is expected to become a $1B business in 2009. Palm, RIM, Nokia, Windows, Android, Sony Ericsson will launch app stores in 2009.
    8. 8. New players will benefit from new opportunities. Traditional infrastructure vendors will continue to struggle through the recession but 2009 will be a big year with opportunities for Smart phones and Mobile Applications.
    9. 9. Operators face delayed investments, re duced 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.
    10. 10. 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.
    11. 11. 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.
    12. 12. 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.
    13. 13. 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.
    14. 14. 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 between 70% and 80%.
    15. 15. Market Segmentation Analysis By ARPU And Usage Behavior In LATAM
    16. 16. 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.
    17. 17. 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.
    18. 18. Can Operators Generate More Revenue From The Low ARPU Segment?
    19. 19. The Low ARPU Segment represents approximately half of total subscribers. 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.
    20. 20. Understanding Subscriber Usage And Opportunities Of The Low ARPU Segment
    21. 21. Regulation plays an important role in user behavior. The introduction of regulation prompt had a major impact in call completion. Slam down on calls diverted to voice mail on Unreachable / Busy / No Answer in Latin America is between 70% and 80%.
    22. 22. Regulation also impacts technical deployment of solution. Operators can play regulation prompt at the switch or use the voice mail platform; when calls are not forwarded to the voice mail system call information used for missed call alert is usually lost.
    23. 23. Voice Mail Revenue Generation Busy/Unreachable – calling party tends to hang up and redial. Ring No Answer - user might send SMS; less likely to redial. Busy with call waiting – this scenario overlaps with No Answer.
    24. 24. Opportunities Of The Low ARPU Segment Approximately 25% of subscribers bring in 95% of total revenue. This means that 75% of subscribers generate almost no revenue.
    25. 25. How To Adapt VAS Offering Using Market Segmentation And Usage Trends
    26. 26. User behavior can be used to segment the market and define the right service for users. VAS managers have followed the strategy of deprovisioning low usage subscribers. This looks good on paper but translates into playing with financial formulas instead of providing services to increase revenues.
    27. 27. A B Criteria - MCA for B party - MCA for A party (optional) -Traffic capacity VS storage (license per user) - Call handling - Platform optimization (Mailbox on the Fly)
    28. 28. Incoming Call No 30% Answer? Yes 70% Yes 70% VM user? End No 30% Yes 70% Slam down? End 30% Missed Call No Alert Billable event End End
    29. 29. 100 Connected 70% 70 Not Connected 30% 30 No Answer 15% 15 Unreachable 10% 10 Busy 5% 5 Yes 70% VM User? No 30% Yes 70% Non Users 30% 9 Slam No Answer 4.5 down? Unreachable 3 Busy 1.5 No 30% Billable VM Deposit 30% 6.3 event Missed Call Alert End Slam down 70% 14.7 End
    30. 30. Usage Behavior ARPU Segment Plan Solution Goal A and B Missed “A” Party services, price No VM Low Youth Prepaid Call Alert, A Party sensitivity. voice to SMS/MMS A and B Missed Light Call Alert, A or B Low Youth Prepaid Users Party voice to SMS/MMS “A” Party services New and exciting, trendy services. A and B Missed Mass Medium Youth Prepaid Call Alert, B Party Market voice to SMS/MMS New services that don’t A and B Missed require high end handsets. Mass Young Call Alert, Voice Medium Prepaid Make traditional services Market professionals Mail delivery to exciting and trendy, increase MMS, E Mail. VM usage. A and B Missed Loyalty, for subscribers that Heavy Young Medium/High Postpaid Call Alert, VVM, may want the iPhone but Users professionals Voice To Text. don’t want to switch. A and B Missed Corporate solutions such as Heavy Corporate High Postpaid Call Alert, VVM, Blackberry or high end Users Users Voice To Text handsets like Nokia N95.
    31. 31. Summary and Conclusions By analyzing end user behavior, traditional services can be repackaged and launched as new services, leveraging existing VAS infrastructure and reducing CAPEX normally required for new services. Repackaging existing services is a smart strategy in an economic downturn. Operators can introduce new services with minimal CAPEX, providing a faster ROI for new investments and increasing productivity by utilizing existing infrastructure.
    32. 32. Raul Castanon http://telcolatam.blogspot.com/ http://www.linkedin.com/in/rcastanon http://latamtelecom.net/

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