Sustituci贸n Fijo M贸vil W. Swain 15 June 2012
Page 1
漏 Copyright 2012
Agenda
Page 2
Big Themes General Framework Trends in Fixed Voice Trends in Mobile Voice Conclusions
© Copyright 2012
Mobile Internet projected to exceed 10 billion units/devices by 2016 Opportunity Yankee Group predicts that the total mobile service market (line subscriptions) will exceed $1 trillion by 2014
Desktop Internet 1 Billion+ Units/Devices
PC 100 Million+ Units
New Mobile Economy Page 3
Yankee Group forecasts that the mobile connected devices market (phones, tablets and e-readers) will exceed $435 billion by 2014 Yankee Group predicts that revenues from mobile apps, cloud and advertizing will grow to $340 billion by 2014 Yankee Group forecasts the growth in the value of mobile transactions worldwide © Copyright 2012 will increase to $984 billion by 2014
Text to Speech to Video
Increasing Bandwidth
Communication modes do not disappear but costs are transformed by technology and prices fall towards costs
Page 4
Š Copyright 2012
One-to-One To Many-to-Many Shared Personal Experiences
As many Hispanic Smartphone Users Connect to Social Networks EVERY DAY as Make Voice Calls (58%) Source: Yankee Group U.S. Consumer Survey, 2011, 2012 Hispanic Respondents Only Page 5
Š Copyright 2012
Defined Place to Any Place
Where Did You Use The Internet In The Last Month (Ranked 1, 2,3) Home
90%
Work
45%
School
27%
Out and about
18%
Private transportation
16%
Public buildings
13%
Internet Café
13%
Hotels
5%
Airports
3%
Other
2%
Public transportation
2% 0%
20%
40%
60%
80%
100%
Source: Yankee Group U.S. Consumer Survey, 2011 Hispanic Smartphone Respondents Only Page 6
© Copyright 2012
Defined Place to Any Place
Smartphone Growth Driven by The Interaction of These Two Forces
1-to-1 to Shared Personal Experiences
For many Latin Americans, a smartphone is their first personal internet device Page 7
Š Copyright 2012
General Framework
Page 8
Source: Yankee Group ConnectedView Mar 2012
Š Copyright 2012
General Framework
United States 120.000,0 100.000,0 80.000,0 60.000,0 40.000,0 20.000,0 0,0
2003
2004
2005
2006
Consumer Telephony Access Revenue
Page 9
Source: Yankee Group ConnectedView Mar 2012
2007
2008
2009
2010
2011
Consumer Mobile Service Revenue
Š Copyright 2012
General Framework
United States Year over Year Growth in Minutes 30,0%
25,0% 20,0% 15,0% 10,0% 5,0% 0,0% -5,0%
2003
2004
2005
2006
2007
2008
2009
2010
-10,0% -15,0% -20,0% Interstate Switched Access Minutes of Use Page 10
Source: FCC, Yankee Group ConnectedView, Yankee Group Mobile Carrier Monitor Mar 2012
Carrier Minutes of Use Š Copyright 2012
General Framework – Minutes Are Harder To See The Crossing Point – May Not Have Come France Fixed and Mobile Minutes
Page 11
Source: ARCEP Annual Report for Year 2010
© Copyright 2012
General Framework – Minutes Are Harder To See Crossing Point – Inconsistent Data France Fixed, Mobile and VOIP Minutes per EUROSTAT 140000000
120000000
100000000
80000000 Cellular mobile calls National calls (local + long distance)
60000000
VoIP calls 40000000
20000000
Page 12
Source: DataMarket.com June 2012
2008
2006
2004
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
0
© Copyright 2012
General Framework – Why Do The Curves Cross?
Mobile Lines Are Personal – Fixed Lines Are Shared “I want to call YOU, not your house/family/office” Prepaid Mobile Opens New Socio-Economic Sectors Calling-Party-Pays PLUS Prepaid Opens The Market Even Further Mobile ARPUs Tend To Decline As Penetration Increases Whereas Fixed Voice ARPU Nearly Flat Delays Revenue Crossing Point
Mobile Voice Minutes More Expensive Than Fixed Voice Delays Minutes Crossing Point
Page 13
© Copyright 2012
Global Trends in Fixed Voice – Some Growth, Especially in Emerging Markets But … Consumer Fixed Telephony Lines (M) 1.200
1.000
917
937
952
970
960
965
953
961
971
981
991
1.000
1.010
2012
2013
2014
2015
2016
866 800
600
Consumer Traditional (i.e. Telco) Lines Decreasing, Replaced by VOIP over Broadband
400
200
0 2003
2004
2005
2006
Consumer Traditional Voice Page 14
2007
2008
2009
2010
2011
Consumer Non-Traditional Voice
Source: Yankee Group ConnectedView Mar 2012
Consumer Voice Fixed Lines © Copyright 2012
Global Trends in Fixed Voice Global Consumer Fixed Voice Revenue (USD M) 300,0 271,0
277,9 262,7
250,0
256,4 250,3 251,6
243,0
234,7 231,0 227,3 222,9 218,7 215,3 212,3
200,0
150,0
With Broadband Voice Given Away (Bundled) or Priced Low and VOIP Rates << Traditional, Voice Revenues Fall Despite Growth in Lines
100,0
50,0
-
2003 Page 15
2004
2005
2006
2007
2008
Source: Yankee Group ConnectedView Mar 2012
2009
2010
2011
2012
2013
2014
2015
Š Copyright 2012
2016
Cord Cutting – US Attitude Survey US Cord Cutting Attitudes 1Q12 80% 70%
My Primary Phone Is Mobile
Percent of Respondents
60% 50% 40%
My Primary Phone Will Never Be Mobile
30% 20% 10% 0% 18-19
20-24
25-34
35-44
45-54
55-64
65+
Age Group Page 16
Source: Yankee Group US Consumer Survey Mar 2012
© Copyright 2012
Cord Cutting â&#x20AC;&#x201C; US Attitude Survey When Will You Replace Your Primary Fixed Phone With A Mobile Phone? It will never be replaced by a mobile phone
39%
It will be replaced with a mobile phone when I get a new bundle that does not include home phone service
4%
It will be replaced with a mobile phone the next time I move
3%
It will be replaced with a mobile phone within the next year
3%
It will be replaced with a mobile phone within the next three months
2%
5%+ intention to "Cut the Cord" w/in 1 year is consistent with 5.8% decline we see/forecast
It is a mobile phone
43%
0% Page 17
Source: Yankee Group US Consumer Survey Mar 2012
5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Š Copyright 2012
Cord Cutting – As Reported by FCC – A More Restricted Definition Fixed Mobile Substitution
25%
21% 20%
18% 16% 15%
15% 12% 10%
13% Adults with Wireless Service Only
10%
Adults with No Telephone Service 5% 1,8%
1,7%
1,6%
1,9%
2,1%
1,7%
1,5%
Jan - Jun 2006
Jul-Dec 2006
Jan - Jun 2007
Jul-Dec 2007
Jan-Jun 2008
Jul-Dec 2008
Jan-Jun 2009
0%
Source: Wireless Substitution: Early Release of Estimates From The Data from the National Health Interview Survey, January – June 2009). As Reported in FCC 15th Annual Report on Mobile Wireless Competition (2011) Page 18
© Copyright 2012
Global Trends in Mobile Voice Global Consumer Mobile Voice Lines (M) 7.000
6.000 5.422
5.659
5.837
5.976
6.038
5.102 5.000
4.574 3.962
4.000 3.456 2.884
3.000 2.341
Reaching saturation for Voice Lines. Further Mobile Growth will come from M2M and Mobile Broadband
1.889
2.000 1.509 1.206 1.000
2003 Page 19
2004
2005
2006
2007
2008
Source: Yankee Group ConnectedView Mar 2012
2009
2010
2011
2012
2013
2014
2015
Š Copyright 2012
2016
Global Trends in Mobile Voice Consumer Mobile Voice Revenue (USD B) 600,0
491,5
500,0
458,9
458,5
452,7
469,3
461,3
444,8
428,3
405,6 400,0
414,5
401,2
370,1
339,9 300,0
282,4
Voice ARPUs continue to fall due to Regulatory and Competitive Action so Voice Revenues continue to fall as well
200,0
100,0
2003 Page 20
2004
2005
2006
2007
2008
Source: Yankee Group ConnectedView Mar 2012
2009
2010
2011
2012
2013
2014
2015
Š Copyright 2012
2016
Voice ARPUs Fall “Sin Piso” (Except ZERO) Real Voice ARPU (Seasonal Smooth) Indexed to 4Q07 1,20
1,00 Movistar COL (Telefonica) Entel CHI Movistar CHI (Telefonica)
0,80
Personal ARG Movistar ARG (Telefonica)
Oi BRA
0,60
TIM BRA
Vivo BRA (Telefonica) Movistar MEX (Telefonica) 0,40
Movistar PER (Telefonica) Movistar VEN (Telefonica) Movistar ECU (Telefonica)
0,20
Telcel MEX (America Movil)
4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 Page 21
Source: Yankee Group Mobile Carrier Monitor Mar 2012
© Copyright 2012
Voice ARPUs Are Not Falling Because of Decreased Usage MOU = Average Voice Minutes of Use Per Month 250,00
The issue is ARPM (Average Revenue Per Minute) not OTT competition or Penetration Growth leading to Marginal Users or Growth in 2nd Lines
Comcel COL (AMX) Movistar COL (Telefonica) 200,00
Entel CHI Claro CHI (AMX)
Movistar CHI (Telefonica) Personal ARG 150,00
Movistar ARG (Telefonica) Claro ARG (AMX) TIM BRA
100,00
Vivo BRA (Telefonica) Claro BRA (AMX)
Telcel MEX (AMX) Movistar MEX (Telefonica) 50,00
Claro PER (AMX) Movistar PER (Telefonica) Movistar VEN (Telefonica) Claro ECU (AMX)
-
Page 22
Source: Yankee Group Mobile Carrier Monitor Mar 2012
Movistar ECU (Telefonica)
Š Copyright 2012
Conclusions Societal trends favor personal devices i.e. Mobile Mobile is accessible to a broader base of society 2-5% of existing Fixed line customers “cut the cord” every year Only bundling of Fixed Voice with Fixed Broadband prevents this from happening faster Fixed Voice Revenues will continue to fall because of VOIP and migration to Mobile Mobile Voice Revenues will continue to fall because of Regulatory and Competitive Action Page 23
© Copyright 2012
¡Gracias! ¿Preguntas? W. Swain Managing Partner, C3 Comunicaciones SAS SVP Emerging Markets, Yankee Group wswain@yankeegroup.com wswainla@gmail.com www.MacondoTelecom.net @WSYGLA
Page 24
© Copyright 2012