Vietnam Mobile VAS Market Review

Presented by: GaCon

Hanoi 05/2012

Contents 1. About me 2. Mobile VAS market review 3. Market trends 4. What should we do? 5. Q&A

About me
Nguyen Minh Quang Founder/CEO Vietnam Digital Entertainment Company Schools: Ha Noi Foreign Trade University (BBA) Ha Noi School of Business (MBA) Founder Institute Companies: FPT Telecom Vietnam2You Galaxy Mobi

Im entrepreneur now!

Vietnam Digital Entertainment Company - VDEC

Founded in 2011 Number of staff: 10 We focus on mobile online product development Key Services: SMS, WAP, Web Website: http://www.vdec.vn

Online Mobile Reverse Auction Game Platform http://daugia321.vn

Online Sport TV Broadcasting

Social Ridesharing Platform

M-VAS Market Review

Yes, I know, same topic but YOUR CHOICE?

Number of Telcos: 7-> 6

Telcos
Viettel

Number
098, 097, 0165, 0166, 0167, 0168, 0169 ,0164 + 096

Mobifone
Vinaphone Vietnamobile Beeline

090, 093, 0121, 0122, 0126, 0128,0120

091, 094, 0123, 0125, 0127 ,0129,0124 092 ,0188,0186 0199 ,099

Sfone

095,0155

12./2011: Viettel officially acquired EVN Telecom and became the biggest Telco in Vietnam Mobifone and Vinaphone tend to merge in the near future 03/2012 Sfone has been accepted to switch from CDMA to HSPA 4/2012 VimpelCom jumped out from Gtel Mobile (Gtel take over)

Number of mobile subscribers

Number of mobile subscribers (11/2011 - GOV): 116,2 Millions compare to 150 Millions by the end of 2010) -> reduce the number of virtual subs Actual live (within 30 days): 60% ( over 70 Millions) -> same number of 2010, different in meaning (live rate: 65% compare to 45% of 2010) Number of 3G subcribers by the end of 2011 is 12,8 Millions 3G penetration: 15% by the end of 2011

(source: mic.gov.vn)

Actual Live Mobile subscribers by Telcos

Telcos
Viettel Mobifone Vinaphone Vietnamobile Beeline Sfone EVN Telecom (CDMA)
(source: seft survey)

Subscriber (estimated)
30 Millions 20 Millions 18 Millions 5 Millions >1 Millions < 1 Millions Dead

A lot of

Chm statistic

Number of mobile users:

Total number of mobile users: about 45 Millions ~ 50% of population (Pop: 90 Millions) By the end of 2012: ~ 50 Millions (forecast)

Still BIG, right?

(source: several different sources)

Number of mobile handsets

Source: Inmobi , the ad-network company accounts for 2.2 billions monthly impressions in Vietnam

Number of mobile handsets in use by the end of 2011: 90 Millions

(source: http://en.wikipedia.org/wiki/List_of_countries_by_number_of_mobile_phones_in_use)

Number of CPs (Content Providers)

-

Officially: 289 (99x,6xxx,7xxx,8xxx,9xxx,...) Sub CPs: 500? (increased a lot!) Top CPs:
VMG BlueSea VTC VCC INCOM Elcom 8x10 5x55 8x62

Independence Mobile application stores are now available

New big boys:

MV Digital Mecorp TeaMobi

Mobile VAS market size (SMS+Telco VAS)

Total Mobile VAS market size: 2011: 11,670 Billions Growth rate: 35% 2012 (forecast): 15,000 Billiions
(source: seft survey)

Revenue Contribution by SMS services

(Application & wapsite provide content still use SMS as payment or delivery content method)

Commercial Terms
SMS services (MO charging)

By the end of 2011: Mobifone and Vinaphone have changed their revenue sharing ratio with CPs Viettel changed the MT cost policy (600VND/MT over quota) Sfone shuted down all connection with CPs Early of 2012: Mobifone and Vinaphone have also changed MT cost policy (350VND/MT over quota)

Commercial Terms
Wap charging:

SMS sub charging (MT charging): Telco 55% - CP 45% Ring back tone: Domestic music: Tecos get 70-75%, CPs get maximum 30% Foreign Music: Telcos get 50% 50% of CP receipt will pay for liscensing (singers, authors) Mobile marketing: In 2011, Viettel has opened connection for CPs to sell brandname SMS Mobifone and Vinaphone are on process

Marketing channels
Newspaper TV Online WAP Portal In-Application ads/delivery App Portal/Store Direct marketing: Spam SMS Others: Leaflet, poster,

=> SMS spam: Still make profit but also troubles (Telco rules) => Public medias: Basic SMS services are no longer welcomed => In-App/Wap/Store: Increasing influences

Business Models

Public media: Gameshow, Interactive and premium contents Spamming: Who is your father? Supportive: Using as billing method or value delivery channel Content producer: Focus on game and application development Content hub: Do it carefully! Money laundering: collapsed due to telcos policies

Opportunities and Threats

Opportunities
Huge market with nearly 12,000 billions (VND) in value and 35% annual growth rate 12 millions 3G users cummulative 4,5 millions touch phones and tablets 19 millions monthly mobile internet users 6 billions monthly ads impressions inventory with over 120% annual growth rate Better 3G speed with flat fee packages ready

Opportunities
Wide uses of prepaid cards, ewallet as alternative payment besides SMS Mobile internet and smartphone bring to CPs the chance to by-pass telcos Telcos are willing to cooperate with CPs to bring quality services to their mobile users New wave of investment in tech start-ups (include mobile start-up): VMG, TeaMobi, Appota,... International market

Threats
Inflation, interest rate, ecconomic recession CPs businesses are still depending deeply on Telcos in next few years. They will squeeze you! Forget about bargaining with them! Telcos are jumping into this sector under VAS Centers or CPs in-house Impact of globalization: Ad-market, Online Mobile Game and Application can be dominated by foreign players Labor issues: CPs are loosing their key persons (they tend to self startup or move to work for Telcos or simply chose other better job)

Market trends

Market trends
SMS services = Lottery + Money feeding Mobile VAS go to clound, people can access via SMS Web/MobileWeb Application Internet TV,... New era of mobile ad-network and professional content distributors Brandname SMS marketing using direct telco connection Mobile Web and App/Game will grow significantly in both number and revenue Wider use of HTML5

Market trends (cont.)

Increase cooperation between CP-CP, CP Handset maker and CP-Telco through content store, pre-app and mobile solution Telcos are continue to lose their control on both basic/vas services Interactive between 3 screens: TV Desktop Mobile Mobile TV, Payment and Commerce can boom in the near future New kind of content agency (do distribution content only and get rev-share)

What should we do?

What should we do?

For CPs: Re-innovate your business model Focus on trending services and actual needs Increase co-orperation with Telcos and other CPs Create your own sale/marketing channel (Socbay iMedia) For mobile start-ups: Do things differently is better than do different things Focus, focus, and focus! How to ride the wave? => Do one thing best!

Some suggestions (cont.)

For developer: Listen to your inner calling Practice is the key Team up and ready to fly Learn business Dont make non-sense production Dont base on idea and think its cool Dont lose focus Find more sale/distribution channel (Apple & Google are good but can you make something like Instagram or Draw Something?

Thank you for listening!

Nguyen Minh Quang
quangnm@vdec.vn 0904862366 quangvdec /gacon
Thank my classmate for update information and help in research

@Yukidaro
/nguyenminhquang

Q&A

If YOU need thats better!

more details information please email me,

Last but not least

This presentation is just my personal sharing, not a guideline or any other serious document Those numbers are collected from many different sources => you can choose to believe or not, but dont ask me where or by whom I got them Everything is not important, the important is that you do believe in what you are doing and loving it Visit my blog at http://yukidaro.wordpress.com if you want to read some more articles about VAS market