The App Effect
Jens Schulte-Bockum
CEO Vodafone Netherlands

VINT Symposium - 7 June 2011
.
=

Apps = Smartphones
Smartphone adoption EU                Type of phone per age group
                                                                Share of type of mobile phone per age group (%). Source:TPCP
                                                         100%


                                                         90%                                                         17
                                                                                                        24                      28
                                                                    35                      33
                                                         80%                    42

                                                         70%


                                                         60%


                                                         50%


                                                         40%                                                         83
                                                                                                        76                      72
                                                                    65                      67
Source : VF internal sales EU




                                                                                                                                        Source : Telecompaper
                                                         30%                    58

                                                         20%


                                                         10%


                                                          0%
                                                                   15-18       19-29       30-39       40-49       50-64       Market
                                                                            Normal                      Smartphone




                                            Netherlands is the Frontrunner!
Total network Tera Bytes



                            Other                                                    250 TB
                            M2M
                            HHBD
                            IOYM
                            MBB




                 apr-09     jul-09   okt-09   jan-10   apr-10   jul-10   okt-10      jan-11


                                                                         Source : Vodafone Network data




Data growth from apps, mobile web and email
14


                                          12


                                                                                                                                                iPhone
                  Average Daily MB Used




                                          10
Daily user MB’s




                                           8                                                                                                    6 – 12 MB per day

                                           6
                                                        Old device
                                           4
                                                        0,75 MB per day
                                           2


                                           0
                                               -13 -12 -11 -10 -9   -8   -7   -6   -5   -4   -3   -2   -1   0   1   2   3   4   5   6   7   8   9   10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

                                                                                                                Days since first iPhone use




                                                                                                                                                               Source : Vodafone Network data




                                                                                    Clear iPhone effect
Apps usage insights
    .
Organizers
                         26%
                                                                      Source:



Beginners
                             Addicts
   31%
                              12%




                    Socializers
                       31%
                                             98
                                       100                 94
                                        90                             87
                                                                                     Use more than once per day
                                        80                                           Use 1 hour or more per day
                                        70
                                                                                      61
                                        60
                                        50
            Apps usage per profile:                 39           38
                                        40
                                        30
                                        20                                      14
                                                                                             8
                                        10
                                         0
                                             socializers    addicts    organizers    beginners


                            Profiles of apps users
                  Four groups of users, based on different motives
“Apps have changed my life”
40
                            34
                                                                                 Source:
35                                    32
30
25
                                                     20
20
15
           10
10
                                                                     5
5
0
       totally agree       agree     neutral       disagree   totally disagree




     Needs / Motivations:
     “Because it makes my life easier…”                                                     Connectivity
         “It seems fun and entertaining”
                                                                                           Entertainment
                       “It’s new and I’m curious about what it does”
                            “Because it will make me more productive”                      Productivity




                                               The app effect
                                               Big impact on our life
Source :



90
80
     79
70
          71   70
60                  66

50                       55
                              50   49
40
                                        40
30
                                             28   26
20                                                     25   24    23
10                                                                      17   16   16
                                                                                         10     8      3
0




                                                                                       Connectivity

                                                                                       Entertainment

                                                                                       Productivity



                         Favourite usage of apps
     Social media #1, followed by gaming, news, weather and navigation
IOYM General Traffic Distribution
                                                      7%

                                                      6%
                                                      5%

                                                      4%
                                                      3%                                                     Total                 HTC

                                                      2%                                                     Thurs                 Apple
                                                                                                             Sunday
                                                      1%

                                                      0%
         M       Tu    W   Th   F   Sa    Su




                                                                 m


                                                                        m


                                                                               m


                                                                                       m




                                                                                                              m


                                                                                                                        m


                                                                                                                               m


                                                                                                                                      m
                                                         am




                                                                                              am


                                                                                                      pm




                                                                                                                                              pm
                                                              2a


                                                                     4a


                                                                            6a


                                                                                    8a




                                                                                                           2p


                                                                                                                     4p


                                                                                                                            6p


                                                                                                                                   8p
                                                      12




                                                                                           10


                                                                                                   12




                                                                                                                                           10
                                                IOYM Application Traffic Distribution

700000                                         7000                          10%

600000                                         6000                            8%
500000                                         5000
                                                           Email               6%
400000                                         4000
                                                           Streaming
300000                                         3000        VOIP (RH axis)      4%
                                                                                                                                          Email
200000                                         2000
                                                                               2%                                                         Streaming
100000                                         1000                                                                                       VOIP
    0                                          0                               0%
                                                                                    12am 2am 4am 6am 8am 10am 12pm 2pm 4pm 6pm 8pm 10pm
             M    Tu   W   Th   F   Sa   Su

                                                                                                                              Source : Vodafone network data


                            Data usage patterns from our network
                                               Per day of the week and per day
24h00
                                                     12h00
Source : Vodafone network data



                    Daily usage pattern of social media apps
Future outlook
     .
Smartphone penetration
     grows fast : >50% of all                                           500 MB per
          device sales                                                  month / user




          Tablets will follow:




                                                      100 MB per
                                                      month / user




Current ownership and intended purchase of a tablet (%) – Netherlands


        Data Explosion, driven by Smartphones and Tablets
Challenge from free
communication Apps




   Re-balance           Re-balance to profit from data growth

                        Grow new revenues




         Challenging the way we do business
          We’re in transition to alternative business models
Ensure best network (HSDPA+ / LTE)


Ensure seamless customer experience


Ensure key enablers: safety, payment, distribution




     What are the ingredients for success?
Jens Schulte-Bockum

Jens Schulte-Bockum

  • 1.
    The App Effect JensSchulte-Bockum CEO Vodafone Netherlands VINT Symposium - 7 June 2011 .
  • 2.
  • 3.
    Smartphone adoption EU Type of phone per age group Share of type of mobile phone per age group (%). Source:TPCP 100% 90% 17 24 28 35 33 80% 42 70% 60% 50% 40% 83 76 72 65 67 Source : VF internal sales EU Source : Telecompaper 30% 58 20% 10% 0% 15-18 19-29 30-39 40-49 50-64 Market Normal Smartphone Netherlands is the Frontrunner!
  • 4.
    Total network TeraBytes Other 250 TB M2M HHBD IOYM MBB apr-09 jul-09 okt-09 jan-10 apr-10 jul-10 okt-10 jan-11 Source : Vodafone Network data Data growth from apps, mobile web and email
  • 5.
    14 12 iPhone Average Daily MB Used 10 Daily user MB’s 8 6 – 12 MB per day 6 Old device 4 0,75 MB per day 2 0 -13 -12 -11 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Days since first iPhone use Source : Vodafone Network data Clear iPhone effect
  • 6.
  • 7.
    Organizers 26% Source: Beginners Addicts 31% 12% Socializers 31% 98 100 94 90 87 Use more than once per day 80 Use 1 hour or more per day 70 61 60 50 Apps usage per profile: 39 38 40 30 20 14 8 10 0 socializers addicts organizers beginners Profiles of apps users Four groups of users, based on different motives
  • 8.
    “Apps have changedmy life” 40 34 Source: 35 32 30 25 20 20 15 10 10 5 5 0 totally agree agree neutral disagree totally disagree Needs / Motivations: “Because it makes my life easier…” Connectivity “It seems fun and entertaining” Entertainment “It’s new and I’m curious about what it does” “Because it will make me more productive” Productivity The app effect Big impact on our life
  • 9.
    Source : 90 80 79 70 71 70 60 66 50 55 50 49 40 40 30 28 26 20 25 24 23 10 17 16 16 10 8 3 0 Connectivity Entertainment Productivity Favourite usage of apps Social media #1, followed by gaming, news, weather and navigation
  • 10.
    IOYM General TrafficDistribution 7% 6% 5% 4% 3% Total HTC 2% Thurs Apple Sunday 1% 0% M Tu W Th F Sa Su m m m m m m m m am am pm pm 2a 4a 6a 8a 2p 4p 6p 8p 12 10 12 10 IOYM Application Traffic Distribution 700000 7000 10% 600000 6000 8% 500000 5000 Email 6% 400000 4000 Streaming 300000 3000 VOIP (RH axis) 4% Email 200000 2000 2% Streaming 100000 1000 VOIP 0 0 0% 12am 2am 4am 6am 8am 10am 12pm 2pm 4pm 6pm 8pm 10pm M Tu W Th F Sa Su Source : Vodafone network data Data usage patterns from our network Per day of the week and per day
  • 11.
    24h00 12h00 Source : Vodafone network data Daily usage pattern of social media apps
  • 12.
  • 13.
    Smartphone penetration grows fast : >50% of all 500 MB per device sales month / user Tablets will follow: 100 MB per month / user Current ownership and intended purchase of a tablet (%) – Netherlands Data Explosion, driven by Smartphones and Tablets
  • 14.
    Challenge from free communicationApps Re-balance Re-balance to profit from data growth Grow new revenues Challenging the way we do business We’re in transition to alternative business models
  • 15.
    Ensure best network(HSDPA+ / LTE) Ensure seamless customer experience Ensure key enablers: safety, payment, distribution What are the ingredients for success?