MEXICO Prepared by
2nd EDITION
MAVAM Acision Monitor for Mobile VAS
Š Acision, june 2011. All rights reserved.
MAVAM | Acision Monitor for Mobile VAS
Editorial Eighteen months ago Acision launched MAVAM to furnish the industry with a periodic tool on the evolution of the value added industry in Brazil. The initiative has recently extended further to include more Latin American countries. We currently have MAVAM Argentina and MAVAM Mexico, which is presenting its second edition today. The value added services (VAS) market in Mexico generated sales for USD 1,045 million during the first quarter of 2011, thus placing Mexico as the country accountable for 21% of the VAS business in Latin America. Value added services in Mexico increased by 35% over the last 12 months; today, value added services amount to 28% of the sales for services of the mobile phone operators, which is slightly above the Latin American average (25%).
Rafael Steinhauser Acision
Messaging services (SMS+MMS) amount to 60% of the revenues from VAS. MAVAM shows that even the use of SMS has reached such a massive level that there are almost no differences at the different socioeconomic levels.
President Latin America
Mobile Internet amounts to 22% of the revenues from VAS, and it has been the highestgrowing service from the first quarter of 2010 to the first quarter of 2011 (+65%), thus following the international trend leading to higher data consumption as a consequence of the higher use of smartphones. In this edition, we are introducing a special topic: Mobile Marketing & Advertising, a value added business which is increasingly major every day on the grounds that mobile phones are the most widely used in the world with 5.6 billion customers. At Acision, we are very pleased to make this tool available to get people to know the value added market deeper. If the current growth trends continue, value added services may amount to 50% of the sales of Latin American operators by 2015. Have a nice reading!
|2|
MAVAM | Acision Monitor for Mobile VAS
Index 2
Editorial
5 6 10 14
1. Introduction 1.1. Value added services in the world 1.2. Value Added Services in Latin America 1.3. Value Added Services in Mexico
18
2. MAVAM - Acision Monitor for Mobile VAS
19 20 21 21 22 23 24 24 25 25 26 26 28 29 30 30 31 32
3. Special Topic: Mobile Marketing & Advertising 3.1. Current penetration of Mobile Marketing & Advertising 3.2. Message reading, remembering, and content 3.3. Sender 3.4. Privacy and permits 3.5. Incentives and receptivity 3.5.1. Discounts and promotions on consumption goods 3.5.2. Prizes 3.5.3. SMS for Free and/or voice minutes 3.6. Perceived Behavior 3.7. Receptivity - Mobile Marketing Assumptions 3.7.1. Advertising via Web links included in SMS 3.7.2. Advertising through the use of Bluetooth at the user’s physical place 3.7.3. Promotion which requires using the photography camera on the mobile phone 3.7.4. Publication of messages in exchange for discounts 3.7.5. Promotion through questions included on the consumed products with incentive offer 3.7.6. Promotion via SMS survey 3.8. Mobile Marketing Conclusions
33 33 33 36 36 37 38 39 41
4. MAVAM Mexico - First Quarter 2011 4.1. Messaging Services 4.1.1. SMS 4.1.2. MMS 4.1.3. Instant Messages (IM) 4.1.4. Voice mail 4.1.5. E-mail 4.2. Entertainment 4.2.1. Games (Use and downloads)
|3|
MAVAM | Acision Monitor for Mobile VAS
41 42 43 43 43 43 46 47 48
4.2.2. Music (Use and downloads) 4.2.3. Ringtones (Downloads) 4.2.4. Images (Downloads) 4.2.5. Video (Downloads) 4.2.6. Mobile TV (Visualization) 4.3. Internet access 4.4. Social Networking 4.5. Mobile Banking 4.6. GPS and Maps
49
5. Final conclusions
50
6. Glossary
53
7. Technical File
54
8. Team
|4|
MAVAM | 1. Introduction
1
Introduction By the closing of the first quarter of 2011, there were 5,6 billons connections1 in the world, out of which 581.52 million were in Latin America. There are still people in the world to be connected to the mobile phone service; market players ensure that by 2015 there will be one terminal per inhabitant. Notwithstanding that, mobile broadband is becoming increasingly important. At the closing of this study, Wireless Intelligence assessed that by June 2011, the HSPA (3G) connections would exceed 500 million and that the LTE connections, after a year from the launching of the first business networks it has already reached a million connections.
At the same time, IDC assessed that terminal manufacturers will distribute 472 million Smartphones in the world this year (54% more than in 2010). The same consulting firm assesses that 1 thousand million smartphones a year will be delivered worldwide by the end 2015. Smartphones represent about 26% of phone devices sold in the world, and in the first quarter of 2011 there were more sales of smartphones than of computers. In parallel with the growth of terminals and data connections, there is also an increase in the VAS contribution percentage to the total revenues of the operator. It is estimated that such percentage is currently 29%3 worldwide; for some operators, such as NTT Docomo with 54% of VAS contribution to its revenues. The increase in data connections, in addition to the operators’ need to increase the risks posed by the value added services, is speeding the discussions and processes up for new spectrum allocations, practically in the whole world. In addition to that, the governmental authorities speed the plans up to reduce the digital gap, including mobile networks as relevant infrastructure to meet their objectives. Tablets burst into the market and the market is expectant to see which will be the actual use of these devices, which will be the demand they will eventually meet. There is no doubt that tablets are new devices whose uses may not be similar to any of the uses we already know.
1 Source: Wireless Intelligence
To all these positive facts which forecast an increase in value added services and data consumption, it must be added the HTML 5 that will facilitate the creation of applications. Also the interest of other industries in mobile services is growing fast; such as the financial industry, which analyzes mobile services as a tool to include more people in the financial system, the healthcare industry thinking of mobility solutions which may help improve the patients’ quality of life, to prevent and diagnose remotely, thus reaching zones that are currently unattended, the energy industry including chips in the meters to manage consumption, among others.
2 Source: Convergencia Research. Includes South America, Central America, Caribbean. 3 Source: Pyramid Research – Data for 2010.
As a conclusion, the industry is already in the path of value added growth, adding more people, increasing the use of VAS and adding new connected devices.
|5|
MAVAM | 1. Introduction
1
1. “Value added services in the world In order to analyze the global impact of value added services on the mobile business, a sample of seven operators in different countries was selected (See chart 2). Changes in total revenue and in Value Added Services (VAS) revenue between Q1 2010 and Q1 2011 were analyzed for each company. Value added services (VAS) mainly comprise: SMS and MMS (messaging), music, videos, games, ringtones (entertainment), payments and mobile money transactions (mobile Money), broadband and mobile Internet, social networks and mobile marketing/advertising
Chart 1.
Operators Analyzed • América Móvil - Latin America • AT&T - United States • France Telecom France Telecom France • NTT Docomo - Japan • Telefónica Telefónica Spain Telefónica Ireland Telefónica Latin America • Verizon – United States • Vodafone Vodafone Great Britain Vodafone Germany Vodafone India
|6|
MAVAM | 1. Introduction
Variation in Voice revenue contribution vs. VAS revenue contribution In Q1 2011, a downward trend in voice services contribution to total services´ revenue and an upward trend in value added services revenue contribution were identified among the analyzed operators. Within this sample, voice services reduced their contribution to operators’ total Average Revenue per User (ARPU) from 19% (in Telefónica Ireland) to 2% (in Verizon USA). Vodafone India was the only exception with an increase of 3% in Voice Service´s contribution. This is consistent with a market that has a 60% penetration of mobile lines on a population that still has a margin for growth in subscribers.In some cases,
Chart 2.
Variation Voice and VAS revenue contribution to ARPU Q1 2010 - Q1 2011
Source: Convergencia Research on the basis of the financial reports of the operators.
VAS revenue already makes up for the drop in voice services revenues. For instance, Vodafone´s balance sheet stresses that this is the first time that data revenue increase exceeds voice revenue decline4.
4 Vodafone Preliminary Results 1/31/2011 page 9: ¨ First year that Group data revenue increase exceeds voice revenue decline.
In more mature markets (European Union, the United States and Japan), operators showed growth in value added services contribution below 5% compared to Q1 2010. In the cases of América Móvil and Telefónica (Movistar) Latin America these services increased its contribution by 8% and 7%, respectively.
|7|
MAVAM | 1. Introduction
SMSs are important within VAS for emerging and developing countries operators, while, in developed countries, where smartphones penetration is much higher5 than in the former, SMSs are losing ground to other data services.
Chart 3.
Total ARPU vs. Mobile Penetration Source: Convergencia Research
5 One example of smartphones penetration growth is the following: in Q1 2011, 32% of
S
In this operators sample, value added services vary between 13% and 54%. As regards NTT Docomo (Japan), value added services already represent 54% of the operator’s revenue. In European Union countries, value added services vary between 25% (Telefónica Spain) and 45% (Vodafone Great Britain), while in the United States, value added services represent 38.3% of Verizon´s revenue.
Verizon Wireless´s post-paid customer phone base were smartphones; up 4% from 2010. Verizon Q1 Highlights Page 5. ¨At the end of Q1, 32% of Verizon Wireless’ retail postpaid customer phone base were smartphones, up from 28% at the end of Q4 2010”.
Value added services already represent 25% of total revenue in the cases of América Móvil and Telefónica (Latin America) and China likewise.
|8|
MAVAM | 1. Introduction
Chart 4.
Analysis of VAS contribution to mobile ARPU December 2010
In developed countries, mobile operators’ ARPU growth opportunities are almost exclusively based on state-of-the-art VAS (those related to the use of mobile Internet) and it is through these services that companies expect to recover voice losses.
Source: Convergencia Research on the basis of operators’ balance sheets.
6 A good example is that of AT&T, that, in the first quarter of the year sold more than 5.5 million smartphones, thus reaching the third-highest growth quarter. AT&T Investor Briefing Q1 2011 Page 3. ¨THIRD-
As regards European Union and United States operators, it is worth mentioning that their ARPU is clearly higher than that of other operators worldwide, enabling them to introduce new and more sophisticated VAS faster and giving rise to more revenue generation opportunities. The quick adoption of advanced mobile devices6, Smartphones and tablets, is fundamental to the introduction of these new value added services. Operators in emerging and developing countries are focused on sustaining revenue by increasing voice service penetration and introducing mobile phones that would enable operators to deliver more and better value added services. Since ARPU in these countries is lower (USD 10-15 approximately), the challenge is having both smartphones and other phones that, despite not being smartphones, have friendly interfaces and features to stimulate value added use.
HIGHEST SMARTPHONE SALES QUARTER EVER: AT&T had another strong quarter of Smartphone sales.
Value-added services expected to continue to grow in all markets thanks to the promotion of services and the introduction of new billable services to keep the business vitality.
(Smartphones are voice and data devices with an advanced operating system to better manage data and Internet access.) More than 5.5 million Smartphone were sold in Q1, the
In the coming years, mobile operators will have to change their business structure to maintain VAS contribution to their revenue. Much of their future will depend on how the changes are made and how these changes will, in business terms, be applied to customers.
third-highest quarter ever.
|9|
MAVAM | 1. Introduction
1
2. Value Added Services in Latin America By the closing of Q1 2011, Latin America had 581.5 million Mobile Phone customers7 which amount to a 98% penetration on the people of the region8, 9 percentage points in respect of the penetration registered in March 2010, when there were about 9 lines per inhabitant. These data show that over the 12-month period from March 2010 to March 2011, 50.2 million new lines were introduced, which amount to 137 thousand net registrations per day.
7 Estimation made by Convergencia Research on the basis of the Balance sheets drafted by Operators, Regulators, Institutions of
19% of the lines in the region operate under the Postpayment method. Despite the fact that, in most countries, the percentage of postpaid lines is not far from such 19%, there are also particular markets, such as Puerto Rico, where postpaid lines (based on agreements), amount to 76.6% or Jamaica, where these lines amount to just 3.5% of the total customers.
Statistics, Related Ministries and of its own information. This figure does not include Nextel’s Trunking customers in Argentina, Brazil, Chile, Mexico and Peru, or Avantel’s customers in Colombia, which amount to
The pobile phone services business receives revenues which may be grouped under four big items: Voice services, such as the traffic of minutes, Value Added Services, which include Internet, messaging and other VAS (content, applications and voice VAS), the revenues from the sales of terminals and accessories, and other general revenues9.
9.5 million customers. 8 Source: ECLAC – The Economic Commission for Latin America and the Caribbean www.eclac.org. Population in Latin America: 594 million inhabitants (including all the countries and all the islands of the Caribbean). 9 The other revenues from mobile phone services are lower in proportion and as they are generally in comprised in the revenues
Over the first three months of 2011, the mobile phone industry in Latin America10 generated revenues for USD 21,475 million. The voice services11 contributed USD 14,832 million (69%), the VAS USD 4,973 million (23%), and the sale of terminals the remaining USD 1,670 million (8%). The growth of the industry, as compared to the first quarter of 2010, when total invoicing reached USD 19,440 million, was equal to 10%. VAS are the services which best explain the variation in the revenues obtained from the industry, which experienced a 33%-increase over the last 12 months. Just below the VAS, there is another factor: technological change supporting the VAS represented by the terminals, and which registered an 18%-increase.
from voice serveces, we have decided to group them the same way in this report. 10 Estimation made by Convergencia Research on the basis of the Balance sheets drafted by Operators,, Regulators, Institutions of Statistics, Related Ministries and of its own information. This figure does not include Nextel’s Trunking customers in Argentina, Brazil, Chile, Mexico and Peru, or Avantel’s customers in Colombia, which amount to USD 1.500 million. 11 Includes the “Other revenues” item.
| 10 |
MAVAM | 1. Introduction
Chart 5.
Increase in the revenues from mobile services in Latin America From Q1 2010 and Q1 2011
Chart 6.
Variation in the revenues obtained from the mobile services in Latin America From Q1 2010 and Q1 2011 In million USD
| 11 |
MAVAM | 1. Introduction
Value Added Services are the main characters of this report and of the current condition of mobile services both in our region and in the entire world. We can see, on a daily basis, how the offers of most of the operators are increasingly focused on fostering the use of these new services. These offers are always based on two sales arguments; the product with its packaged services and the accompanying Smartphone12, thus increasing the exposition of these phone devices. During the first quarter of 2011, the use of Value Added Services by mobile subscribers generated revenues of USD 4,973 million in Latin America, which is 33% higher than the USD 3,743 million of the first quarter of the previous year. Of the USD 4,973 million invoiced during the first quarter, SMS and MSS contributed USD 3,024 million (61%), Internet USD 1.371 (28%) and Others USD 578 (12%).
Chart 7.
Distribution of mobile services ´revenue in Latin America As of Q1 2011 in million USD
12 Smartphones are phone terminals which have some kind of data connectivity system –among other features– such as GPRS or 2G, 3G and/or Wi-Fi.
| 12 |
MAVAM | 1. Introduction
Chart 8.
Services ARPU13: VAS vs Voice Service ARPU in Latin America As of the first quarter of 2011 in USD.
N/D No disponible
13 Services ARPU do not include device´s sales, therefore it is lower than total ARPU. Total ARPU is the ARPU reported by operators´ in their financial statements.
Costa Rica has the highest ARPU in USD in the context of the other countries in the region, in spite of the fact that its position as far as mobile service penetration is concerned is practically the opposite (57%). This is mainly the consequence of the fact that this market has not adopted the prepaid method until 2010, and at the same time, there is just one operator (ICE), although Claro and Movistar will also be operating by the end of 2011.
Chart 9.
VAS ARPU and evolution in the region As of the first quarter of 2011.
As regards the relative value of VAS ARPU in respect of service total ARPU, Argentina is the leading country in the region with a 42% contirbution. Panama is at the bottom of this comparison with a VAS ARPU equal to 12% of its service ARPU.
| 13 |
MAVAM | 1. Introduction
1
3. Value Added Services in Mexico
The mobile phones market in Mexico is the second leading market in Latin America14 in terms of sales volume. During the first quarter of 2011, the mobile industry generated revenues for about US$ 4,000 million15 ($48,325 million), representing 19% of the region’s total invoicing. Mexico, with 92.9 million16 mobile lines, also ranks second in the region with 16% of the total number of mobile subscribers. A third relevant fact is that service penetration over the total population is only 83%, which is 15 pp (percentage points) below the regional average (98%). This involves a growth opportunity for operators, since there are people still to be introduced to mobile technologies, up to more than 100% - figure which has already been exceeded by various countries in the region (Argentina, Uruguay, Brazil, and Chile, among others). Between the first quarter of 2011 and the same period of 2010, the range of lines grew by 9%, matching the growth of the region, while the revenue variation reached 7%17, which is 3 pp below the average growth for Latin America (10%).
Chart 10.
Mobile telephone lines by operator 14 Latin America includes the following
Variation Q1 2010 vs. Q1 2011
countries: Belize, Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, Panama, Mexico, Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, French Guyana, Paraguay, Peru, Surinam, Uruguay, Venezuela and the 24 insular countries of the Caribbean. 15 The exchange rate used was US$ 1 = $12.08 for the first quarter of 2011 and US$ 1 = $12.80 for the first quarter of 2010. It does not include revenues for Nextel’s Trunking service, which amounted to US$ 546 million. 16 Does not include the 3.4 million lines of Nextel’s Trunking. 17 Growth in American Dollars. The variation in the business in Mexican Pesos was 3.2%.
| 14 |
MAVAM | 1. Introduction
Chart 11.
Market share by operator Q1 2011, In thousands of lines.
Among the Mexican mobile market’s features, we find that the share of the leading operator (Telcel), amounting to 71%, tripled by the company ranking below (Movistar), with a share of only 22%. This allocation of lines among operators is not common to the rest of the countries in the region and even less in larger markets (For instance: Argentina, Brazil, Chile and Venezuela). In these last markets there are 3 or 4 operators in the market with similar shares. Within the most important countries, only in Colombia, Comcel (also owned by the group América Móvil), has a similar market share (68%). In Mexico, the market share of each company has been relatively stable during the last year. As we have already mentioned, Telcel is the leader in the Mexican market, both in number of lines and in terms of revenues. Telcel was also the operator with the highest growth (11%, measured in US$), while the leader in growth in terms of number of subscribers was Movistar (+ 12.6%). In Mexico, operators have profiles that are very different from their total ARPU18. Iusacell, with the lowest number of lines is also the operator with the highest ARPU (US$ 17) and Telcel has an ARPU 67% higher than Movistar.
Chart 12.
Total ARPU by operator Q1 2011.
18 Total ARPU: Includes the sale of terminals, voice services, added value services and other revenues, the revenue reported by companies in their financial statements. Source: Operators’ financial statements.
| 15 |
MAVAM | 1. Introduction
The US$ 4,000 million invoiced by the mobile phones industry in Mexico during the first quarter of 2011 are allocated as follows: US$ 310 million ($ 3,745 million), for the sale of terminals and devices. This share of the business represents 8% of total sales, which increased by 1% as compared to the first quarter of 2010. The remaining 92% pertains to revenues from services, including voice services and value added services (VAS). Sales for services (voice + VAS) amounted to US$ 3,690 million ($44,581 million), a growth of 9% as compared to the same period of the previous year (a 3% the variation in Mexican pesos). Voice services generated US$ 2,645 million ($31,954 million), representing 72% of revenues for services and grew by 2% in US dollars in relation to the first quarter of 2010. The other item included in revenues for services is VAS (value added services), which generated revenues for US$ 1,045 million ($12,626 million). This business was the key engine of the mobile phones business in Mexico during the first quarter of the year, growing 35% in US dollars and 28% in Mexican pesos. Mexico’s invoicing for VAS represented 21% of the VAS business in Latin America. (US$ 4,973 million), placing Mexico as the second market in sales volume, right below Brazil which contributed 26% (US$ 1,282 million) and above Argentina, where the VAS business equals 15% (US$ 740 million) of the regional aggregate. Chart 13.
Mobile phone Business: Variation by type of income Q1 2010 vs. Q1 2011.
| 16 |
MAVAM | 1. Introduction
Chart 14.
Distribution of revenues by type of services Q1 2011, in million USD.
The VAS business can be categorized into three main components: SMS and MMS services, Internet (data traffic) and other VAS (which include revenues for content downloading, applications and voice value added services, depending on the operator). In Mexico, messaging services represent 60% of the VAS business, with 27% growth in US dollars and 20% growth in Mexican pesos. Revenues obtained from Internet services were the highest-growing items (65% in US dollars and 56% in Mexican pesos), totaling a share of 22% in the VAS business. The remaining item (other revenues from VAS), grew by 33% in US dollars and 26% in Mexican pesos.
| 17 |
MAVAM | 2. MAVAM (Acision Monitor for Mobile VAS)
2
MAVAM Acision Monitor for Mobile VAS The MAVAM Acision study aims at analyzing the evolution of value added services in Latin America. It has been carried out in Brazil since 2009. The study also started to be carried out in Mexico, in 2010 and in Argentina, in 2011.
Sampling participation pursuant to the geographic residence in Mexico: Residence Mexico City
50%
Rest of the country
50%
This edition of MAVAM Mexico has been prepared on the basis of the following methodological characteristics: a. 798 interviews were made to people contacted on the Web (Computer Aided Web Interviewing – CAWI). b. The geographic area covered by the sample comprises all of Mexico’s regions. The sample considers the number of inhabitants, the economic status and Internet penetration by geographic region (it is a Web-based interview), in order to improve local representativeness. c. The survey was made on the Web (CAWI), pursuant to the rates applicable to the socioeconomic level, age and gender, which preserve the proportions of Mexican population. Since the number of Internet users (about 34.9 million) is lower than the number of mobile users (92,912,866), and given the fact that the sample represents people who are more familiarized with technology, the values obtained in some cases may not be extrapolated to the market aggregate; instead, such values are considered for reference and orientation purposes. These cases are explained throughout the study. d. Los servicios analizados en esta edición son: • Messaging • SMS • MMS • E-mail • Instant messaging • Voice mail
• Entertainment • Music • Pictures • Games • Ringtones • TV • Video
• Mobile Internet • Social Networks • Location services (GPS) • Payments and mobile banking • Mobile Marketing (Special topic)
This MAVAM Mexico edition was performed by Convergencia Research, in May 2011.
| 18 |
MAVAM | 3. Special Topic: Mobile Marketing & Advertising
3
Mobile Marketing & Advertising
SPECIAL TOPIC As per Magna Global consulting firm, the world investment in advertising on the media in 2010 was equal to about 390.61 billion dollars. Magna Global estimates that the investments in advertising will be increased by about 5.4% in 2011 to reach 411.7 billion dollars. The traditional media, such as television, radio, and newspapers represent the bigger portion of investment in advertising; notwithstanding that, they are growing at lower rates than the nontraditional media, such as the Internet and advertising on mobile phones.
N O
E
S
Pursuant to the figures furnished by the consulting firm, the expenses incurred in on-line advertising was equal to 63 billion dollars worldwide in 2010, and 12.5% growth is expected in 2011. As regards online advertising, the mobile business generated business for 2.1 billion dollars in 2010 and a 32% is expected during 2011. As it arises out of the data furnished by the Internet Advertising Bureau, the investments in on-line advertising in Mexico during 2010 were equal to 3,392 million Mexican pesos (US$ 265 million2) and there was a 35% increase in respect of the previous year. Advertising on mobile phones comprises such varied formats as: sending SMS, use of short messages to interact with television contests or other prizes, banners at the operators’ sites; new formats arising out of smartphones, such as video spots or preferential locations in the mobile browser’s navigation bar, and augmented reality among many others.
1 Source: Magna Global. The figures may vary
In order to better understand the mobile advertising phenomenon, MAVAM analyzes two main groups based on the sender. On the one hand, the messages generated by the operator itself (the so called ¨mobile marketing¨), and on the other hand, any messages sent by different companies in general (other than telecommunication operators) using the mobile device as a channel. The latter is called ¨mobile advertising ¨.
as they are provided by different consulting firms since there is not a single method to assess the advertising investment market. 2 Source: IAB, PriceWaterhouse, Terra: Fact Sheet: Advertising Investment on the Internet 2010. Investment in online advertising 3,392 million Mexican pesos. Exchange rate used US$ 1 = 12.8 Mexican pesos.
In this MAVAM edition we will focus on two main aspects. One aspect is related to the current penetration of the receipt of promotional SMS, their senders, levels of remembering, the need to obtain consent from user and receptivity levels in exchange for incentives. The other aspect consists in analyzing some practices, such as sending links included in SMS and the use of Bluetooth for promotions near the user’s location, among other practices, and in finding out about the prospective response that mobile subscribers could give to this type of messages.
| 19 |
MAVAM | 3. Special Topic: Mobile Marketing & Advertising
3.1. Current penetration of Mobile Marketing & Advertising Chart 15.
Receipt of advertising on users’ cell phones
84% of the people surveyed some time received advertising or promotional SMS or MMS with discounts on their mobile phones. There is an increase equal to 5 percentage points in respect of Q3 2010 (MAVAM Mexico, first edition).
Basis: 798 cases (Total sample).
Frequency: Almost half of the people surveyed (49.8%) receive promotional SMS more frequently than once a week; they receive 6 promotional messages per month on average.
Chart 16.
Frequency of receipt of advertising Basis: 668 cases (Users who received advertising some time on their cell phones).
| 20 |
MAVAM | 3. Special Topic: Mobile Marketing & Advertising
Chart 17.
3.2. Message reading, remembering, and
Careful reading of SMS/MMS received containing advertising
content
Basis: 668 cases (Users who received advertising some time on their cell phones).
79% of the users who received advertising messages have read them carefully and 98% of those users can remember the content of the message in detail. These percentages are in line with the figures obtained by MAVAM in Brazil and Argentina, and they show the value of mobile phones as prospective high-remembering advertising means. Generally, the content of the promotional messages is related to prepaid recharge promotions, change of plans and phone devices, contests or rewards, content download, news broadcasting and so on.
3.3. Sender 88.3% of the people surveyed answered that the main sender of advertising is the mobile phone service operator itself (the so called “mobile marketing”). The figures show that the mobile marketing strategies implemented by the operators are being broadly used, while the other sectors of economy make an incipient use. Service companies rank second in the promotional message senders’ chart, whether such companies are mobile operators or not (10.2%) and the companies providing mass consumption products rank in the third place (6,3%). The other categories do not reach 5% of the mentions. Inside the ¨other companies¨ category, the promotional material sent by
Chart 18.
Advertising or promotion sender Basis: 668 cases (Users who received advertising some time on their cell phones). Multiple choice.
| 21 |
MAVAM | 3. Special Topic: Mobile Marketing & Advertising
banks and news services stands out. Only 6% of the users are not able to remember the sender, although in most cases users can actually describe the content of the messages in general.
3.4. Privacy and permits 82% of people surveyed said that companies must ask users for permission to carry out these promotional or advertising actions.
Chart 19.
Companies must ask users for permission to send messages containing propaganda or advertising to their mobile phones Basis: 798 cases (Total sample).
Postpaid users are more aware of privacy issues than postpaid users. While 82% of prepaid users consider that companies in general must ask for permission before sending any promotions, 87% of users are subject to postpaid system (agreement). As regards the socioeconomic level, the sectors which are best positioned in the socioeconomic scale (ABC+) tend to require more permits at the moment of receiving propaganda and advertising (86%) as compared to the simple average (81.6%). These questions seem transversal to the age groups on the grounds that there are no significant differences as to the need to grant permits to the companies sending advertising messages. 67.9% of the people surveyed would be willing to receive advertising or promotions only from such companies as may have been granted the permit to do it. Data show that in order to take advantage of mobile marketing potential it is important to respect the privacy of users.
| 22 |
MAVAM | 3. Special Topic: Mobile Marketing & Advertising
Chart 20.
I would like to receive messages with propaganda but only from the companies I have authorized Basis: 798 cases (Total sample).
3.5. Incentives and receptivity In general, users have proven to be willing to receive advertising messages and to obtain incentives in exchange for that. 69% of people surveyed proved to be receptive (they fully agree) to incentives, such as the option of obtaining free SMS or promotions offering minutes to make phone calls. Receptivity is reduced to 55% when the incentive in question is a prize and it is reduced to 44% when discounts are in issue.
Chart 21.
Acceptance of text messages containing propaganda and advertising in exchange for certain incentives Basis: 798 cases (Total sample).
| 23 |
MAVAM | 3. Special Topic: Mobile Marketing & Advertising
3.5.1. Discounts and promotions on consumption goods The offer of discounts and promotions on clothes, CDs, events, etc. gets 44% acceptance, though at the same time it entails the highest hesitation percentage: 26% of users neither I am willing to receive agree nor disagree. This type of incentive does not have any differences as to the plan hired messages containing or gender. Nevertheless, the ABC+ sectors prove propaganda or advertising on my cell phone if they include to be more receptive to discount incentives (51%) than C and D sectors (46% and 40%). discounts and promotions on clothes, CDs, events, etc. Basis: 798 cases (Total sample). People older than 44 years of age show the lowest level of acceptance to discount incentives (38%) as compared to an average of 46% in the other age categories. Chart 22.
3.5.2. Prizes Such users as are willing to receive messages containing propaganda or advertising in exchange for some kind of prize amount to about 55% of the people surveyed. However, there is a higher percentage of users who fully agree to that (27%).
Chart 23.
I am willing to receive messages containing propaganda or advertising on my cell phone if I am given a prize in exchange. Basis: 798 cases (Total sample).
The fact of receiving some kind of prize as an incentive does not show any differences as to socioeconomic level or type of plan hired. Notwithstanding that, people’s disagreement with the situation increases as the age of the users increases, where only 40% agree to receive messages in exchange for prizes, as compared to the average 55% of the sample. The proportion of men (61%) who agree to receive some kind of prize is higher than the proportion of women who agree with that situation (52%).
| 24 |
MAVAM | 3. Special Topic: Mobile Marketing & Advertising
3.5.3. SMS for Free and/or voice minutes 69% of users would be willing to receive promotional messages in exchange for free SMS or voice minutes. These are the highest-receptivity values within the three incentives analyzed I am willing to receive (prizes, discounts and free SMS or voice services). This is the option most users fully agree with (41%) while the messages containing propaganda or advertising on my cell phone if I get free messages or minutes percentage of users who just ¨agree¨ is similar to the other incentives analyzed. Furthermore, this is the incentive with to make phone calls sample). Basis: 798 cases (Total the lower proportion of users who fully disagree (7%), as compared to the 3% obtained under the other two categories (prizes and discounts). Chart 24.
Users under 35 years of age tend to be more receptive to this incentive (73%) as compared to 64% of users from 35 to 54 years of age, and to 54% of users above 55 years of age. There are significant differences per socioeconomic level, gender or type of plan hired.
3.6. Perceived Behavior
Chart 25.
It is probable that advertising or propaganda on my cell phone could make me try the product or service promoted
Users were asked about the possibility that advertising on their cell phones may motivate them to try the product or service promoted.
Basis: 798 cases (Total sample).
In this case, the percentage of users who have not yet made their minds (33%) is almost equal to the percentage of users who somehow consider that they would be motivated (8% fully agree and 24% agree). Users subject to postpaid plans are more willing to be motivated than those who have postpaid systems [sic] and (38%) men are more receptive than women (30%). There are significant differences per socioeconomic level or age.
| 25 |
MAVAM | 3. Special Topic: Mobile Marketing & Advertising
3.7. Receptivity - Mobile Marketing Assumptions In order to go deeper in the analysis being conducted on the use mobile marketing and advertising, a series of questions were asked to the people surveyed on how their behavior would be in respect of hypothetical formats of advertising messages involving mobile phones. All the hypothetical situations were approached subject to the condition that the promoted product / service should be of interest to users. This condition has applied because in most countries the regulations in force require that the user had given his or her prior consent to receiving advertising messages on their cell phones; consequently, it may reasonably be expected that the future development of advertising on mobile phones will be focused on sending messages to receivers who have an interest in, or are particularly familiar with, the sender. Despite of the fact that the hypothesis analyzed do not involve message sending, for the sake of consistency, the ¨product of interest¨ restriction was maintained. In the construction of the possible scenarios, the possibility of presenting options which could turn out to be massive by taking advantage of the most common functionalities in the current range of phone devices and leaving other options such as augmented reality or video downloading which are only suitable for a limited number of devices (mostly smartphones) was also taken into account.
3.7.1. Advertising via Web links included in SMS Users were asked: “What would you do if you received a message on your cell phone offering a promotion on a product or service of your interest and a link to access directly to such product or service’s site?” 30.8% of the people surveyed would be willing to surf in the product’s promotion site, but they would concrete the purchase by payment methods other than cell phones. 35.2% of users would only click on the link after the promotion in question has been analyzed. 28.1% of users would not click on any links with promotions on their cell phones and only 5.9% of users answered that they should click on the link and that they would also purchase the product.
| 26 |
MAVAM | 3. Special Topic: Mobile Marketing & Advertising
The option to purchase directly from the mobile phone is reasonably low, because users are exposed to two hypotheses: the first one is the linking action and the second one is the payment action by means of the mobile phone; this functionality is almost non-existent so far in Latin America. However, the fact that the mobile payment system is practically undeveloped and that, at the same time, 5.4% may answer that they would eventually concrete a purchase through the cell phone is more than positive at the time of thinking about the potential of the mobile phone as means of payment. In turn, 63.3% of users show some kind of resistance to access links. Even though this study is not interested in exploring the grounds for their refusal, it is indeed important to make a comparison with the users’ experience on Internet links, where spam containing links has caused bad experiences. There is another negative factor arising out of the fact that surfing the Web on cell phones is very expensive for users and therefore, it is reasonable that users may be more cautious at the time of answering to any action which may be using data traffic of their data package hired. In spite of the fact that negative reactions exceed the positive reactions, it is to be noted that 30.8% of the people surveyed would be willing to visit the site suggested in the message, even though the purchase transaction may be materialized by means of different payment methods. To conclude, the main role of the advertising messages received is still, to a large extent, at the information level, moving toward interaction (would click) but without arriving at the operational level (the purchase).
Chart 26.
Action expectation with respect to the receipt of SMS containing links of access to any promoted product´s Web site Basis: 798 cases (Total sample).
| 27 |
MAVAM | 3. Special Topic: Mobile Marketing & Advertising
3.7.2. Advertising through the use of Bluetooth at the user’s physical place The people surveyed were asked what they would do if a sign on a store or shopping would instruct them that by activating the Bluetooth tool on their cell phones they would have the option of downloading a promotion with a discount on any product/service of their interest which is near the location where they are. In such a situation, there is a combination of a traditional means (the promotion by means of the sign) and the digital means which, in turn, require a highly-complex interaction with mobile devices (know how to activate and use the Bluetooth tool). In this context there is an objective barrier which consists in the users' own device features. In our sample 14.7% of users whose terminals lack the Bluetooth technology would be excluded from the possibility of gaining access to the promotion. Chart 27.
Action expectation with respect to the use of the Bluetooth device to download promotions with discounts Basis: 798 cases (Total sample).
51.7% of the people interviewed show some kind of resistance to the activation of the Bluetooth technology, but more than half of these people would be willing to activate it provided that they could seriously consider the promotion; that is to say, if the message was clear as to the information and sufficiently motivating. Nevertheless, 34.1% of users would activate their Bluetooth connection, although most of them would postpone the actual purchase action. Only 11.7% of users considered activation and purchase at the moment probable. As compared to the hypothesis considered in the section above, receptivity improves by about 4 percentage points, even considering that interaction via Bluetooth requires higher skills than mere clicking on a Web link. The improvement in receptivity could be pointing at the potential of combined advertising messages with users’ location.
| 28 |
MAVAM | 3. Special Topic: Mobile Marketing & Advertising
3.7.3. Promotion which requires using the photography camera on the mobile phone After having been asked what would they do if any advertising on a magazine or newspaper included a picture in bar code format that once photographed with the mobile device could make it possible for users to download a discount on any product or service of their interest, 34.1% of the people surveyed answered that they would be willing to participate. The values are similar to those pertaining to Bluetooth activation; notwithstanding that, in the case of pictures in bar code format, the highest values pertaining to the generation of product purchase transactions (15%) are registered over any other hypotheses; maybe this is a consequence of the fact that from the very beginning of the hypothesis the factor of taking advantage of the promotion divides the users’ action in two stages: first, users get information about the promotion; then, user purchases. This division somehow represents a more familiar or common way of acting.
Chart 28.
Action expectation in relation to the use of photographs to download promotions with discounts Basis: 798 cases (Total sample).
| 29 |
N E O S
MAVAM | 3. Special Topic: Mobile Marketing & Advertising
3.7.4. Publication of messages in exchange for discounts
Chart 29.
Users have been asked the following question: “What would you do were you offered to send an SMS to be published on a television show, on a Web site or on any giant screen somewhere and to receive a discount on any product of your interest in exchange?”
Action expectation in respect of the request for sending SMS for publication purposes and to obtain promotions with discounts Basis: 798 cases (Total sample).
In the context of this assumption, the work was focused on the idea of a more active receiver; a receiver who may not only receive messages but who may also send messages or somehow take part in the process. 31% of the people surveyed would not provide any response to this promotion while there is a 35.2% who would be doubtful as to whether they should take part or not, and even though there is a relatively high number of users who would answer the message, a few 21% estimate that they would actually materialize the purchase.
3.7.5. Promotion through questions included on the consumed products with incentive offer Yet another prospective situation places faces each person surveyed with a text in a advertising or in the label of any product just bought which reads: “Send the answer to the following question via SMS to number 12345, take part in the drawing of lots for a 0 KM vehicle and get a 30% discount to purchase any product of your interest”.
| 30 |
MAVAM | 3. Special Topic: Mobile Marketing & Advertising
Chart 30.
Action expectation in respect of the request for sending SMS with the answers required to participate in the drawing of lots to get prizes and discounts Basis: 798 cases (Total sample).
This situation shows the highest proportion of users who would not take part in the promotion (39.1%), despite the participation levels around the general average of the other situations (about 30% of users would send the message). The high degree of refusal to take part could be an indicator of the fact that even though users would receive the promotion through a consumed product –which would indeed indicate some kind of previous interest–, the trustworthiness of the advertising could be impaired by the possibility of obtaining a significant prize, such as a brand new vehicle.
Chart 31.
Action expectation in relation to the request to fill in a survey via SMS in exchange for a discount Basis: 798 cases (Total sample).
3.7.6. Promotion via SMS survey Lastly, the people surveyed were asked to state what could they do were they offered to take part in a survey via SMS about a product of interest, in exchange for getting a discount. 35% of the users condition their action to the content of the promotion; 31% of the users would not participate, and 18.9% would send the response. 15.2% of users would end the response and purchase the product, thus obtaining the discount benefit. These potential purchase values are among the highest values of the sample.
| 31 |
MAVAM | 3. Special Topic: Mobile Marketing & Advertising
3.8. Mobile Marketing Conclusions 84% of the people surveyed have received SMS or MMS on their mobile phones containing promotions or advertising. Such percentage is almost 6% higher than it was in the third quarter of 2010. The receipt of messages on mobile phones has high-reading levels. 79% of the people surveyed read the messages carefully and 98% of such percentage of people surveyed may remember the type of content received which mostly pertains to promotions and discounts. In 88.3% of the times the message sender is the mobile operator itself (mobile marketing), followed by other service companies (10.2%) and mass consumption companies (6.3%). Only 6% of users are unable to identify the sender.
Chart 32.
Promotion-sending formats through mobile phones and levels of acceptance
In such situations in which the proposed advertising actions require the interaction of receiver, such as Bluetooth activation, the use of photography cameras, clicking on any link leading to a Web site, only 10% to 15% of the people surveyed would participate and purchase without any further conditions, while 30% to 35%, depending on the option, is not willing to participate. In all the instances, almost half of the people surveyed either need more information or they need to analyze the information received before giving a positive answer to the indications provided in the promotion. The trustworthiness of the benefits offered in the promotions affects the acceptance and rejection level.
Basis: 798 cases (Total sample).
The proposal of clicking on a link received in a SMS to Access the Web site of the product being promoted was the one with the least relative supporters; the use of other devices such as Bluetooth and photography cameras had higher acceptance (even though they require higher interaction skills by users). The lowest acceptance was registered in relation to the sending of responses to questions displayed on the labels of consumed products, which may provide discount benefits. To sum up, it may be stated that the role of mobile marketing and advertising is still focused on providing information and there is an unaccomplished goal which consists in developing such advertising formats as may require the intervention of consumers, even considering that all the assumptions analyzed have been agreed upon as conditioning provisions that the promotion received consisted in a product of interest to users.
| 32 |
MAVAM | 4. MAVAM Mexico
4
MAVAM Mexico
– First Quarter 2011
4.1. Messaging Services Short text message (SMS), multimedia messages (MMS), mobile e-mail and mobile message services can be grouped under the “Messaging Services� heading. On the basis of the data provided by several consulting firms1, this group of services represents a global market of between US$180 and US$ 200 thousand million sales per year. SMS and MMS services are the most widely used services in the world, and they represent about 60% of the total messaging market (SMS + MMS + e-mail + instant messaging). The use of SMS and MMS in Mexico generated sales by US$ 626 million dollars, during the first quarter of 2011. These figures rank the Mexican market as the most important as far as the sales volume of SMS and MMS in Latin America is concerned, followed by Brazil and Argentina.
Chart 33.
Use of messaging services
Revenues from SMS grew by 27% between the first quarter of 2011 and the same period of 2010. The operators surveyed for this study consider that the growth of smartphones is replacing SMS with instant messaging solutions, although the operators also believe that there is still no room for higher use by users who own basic phone devices.
Basis: 798 (Total users). *Active users: use the service at least once a week.
4.1.1. SMS 98% of surveyed users use the SMS service; however, only 95.5% have used this service over the last three months. The numbers remain stable as compared to the prior edition of MAVAM (Q3 2011). Short text messages constitute such a massive communication alternative among users that there are even slight differences at the socioeconomic status: there is a difference of only four percentage points between ABC+ ends (97% used the service over the last three months) and D (93% used the service over the last three months.)
1 Differences vary according to the source and calculation method used.
| 33 |
MAVAM | 4. MAVAM Mexico
Chart 34.
SMS use according to socioeconomic status
Use of SMS
SMS use pursuant to socioeconomic status.
Basis: 792 cases (Total sample).
Basis: Those who sent SMS in the last three months: 763 cases.
According to MAVAM, 82.6% of individuals in Mexico send more than one SMS per day. 43.7% of users sent between 2 and 5 messages a day, and most users represent to have sent 5 SMS a day. The values for the use of SMS remain constant as compared to MAVAM’s edition for Q3 2010. Based on the data furnished by Cofetel, the average of messages sent by user per month during the first quarter of 2011 was 62 SMS. There has been a 5% growth over the last 6 months (59 SMS per month on average were sent in the third quarter of 2010) and 6% as compared to the first quarter of 2010. The differences between MAVAM and regulators’ records arise out of two factors: in the first place, the users we surveyed are more familiar with technology, because in addition to being mobile telephone users, they are Internet users (the survey is Web-based and includes all social classes); in the second place, regulators measure messages sent and the result is obtained by dividing the total number of messages sent by the total amount of mobile lines; as it is known, in all countries not necessarily 100% of lines are active (consuming), part of those lines are only data lines (mobile broadband – USB), or machine to machine lines (M2M), and therefore the denominator by which the amount of SMS sent is divided is higher than it should be.
| 34 |
MAVAM | 4. MAVAM Mexico
52% of respondents spend between $35 and $70 per month. The most frequent average expense ranges from $71 to $150 per month (29%), while in the first edition of MAVAM Mexico (Q3 2010) the most mentioned spending range had been 36 to 70 pesos (29%) of the sample. As for this sample, users spend on average $104 per month in SMS.
Chart 35.
Sending SMS per day Basis: 750 cases (those who sent SMS in the last three months).
Opertors´s focused their offers in SMS packages for users whose consumption is over 100 SMS on monthly basis. For instance, Telcel offers 300 SMS packages for $103, in which the SMS value lowers from $0, 88 (when there is no package hired) to $0, 34 hiring this service. This offer reduces the SMS unit price in 158%. It also offers packages of 1500 SMS for $155 ($0,10 unit price) and another of 2500 SMS for $207 (Unit price $0,08)2. Meanwhile, Movistar offers 100 SMS package for $0,873 unit price.
Chart 36.
Average monthly expense for SMS Basis: 762 cases (Those who sent SMS in the last three months).
2 Fuente: sitio web de Telcel http://www.telcel.com/portal/servicios/mensajes_ sms/paquetes_sms.html?mid=1202 3 Fuente: sitio web de Movistar http://www.movistar.com.mx/Movil-ServiciosMensajes-Paquete-SMS-T
| 35 |
MAVAM | 4. MAVAM Mexico
4.1.2. MMS Chart 37.
Use of MMS Basis: 798 cases (Total sample).
62.2% of respondents own telephones enabled to send and receive multimedia messages; however, only 24.3% has sent a multimedia message in the last three months, and within that group, less than half of the users (40.9%) sent one MMS per week on average, 20% higher than the figure obtained by MAVAM for Q3 2010. A similar number of users (39.8%) send up to 5 MMS per week. These values indicate that about 9% of respondents are active users of multimedia messages; i.e., they use the service more than once a week. These figures are high as compared to the global evolution of the multimedia messages service, although it is important to take into consideration that users are generally not familiar with the technology jargon in detail, which means that what they know is that they are using their cell phones to send images or multimedia files, regardless of whether these messages are sent through an MMS platform. One way or another, the evolution of those who send messages or multimedia constitutes proof of the increasing importance of mobile telephones as instruments to exchange audiovisual content. From the offer standpoint, some operators such as Movistar are starting to pack MMSs, while others such as Iusacell think of MMS as just another service available in cell phones, and used by a small percentage of customers mainly to exchange images. The percentage of people who sent an MMS in the last three months is higher for postpaid than prepaid. For the group with postpaid plans it is 37.9%, compared with those with a prepaid (21.9%). Another reading indicates that 47.7% of users who own a type of advanced terminal have sent an MMS in the reviewed period. This proportion decreases among those who use a traditional type of device (18.7%).
4.1.3. Instant Messages (IM) 15.9% of respondents use instant messaging services more than once a week (active users). The users who use the IM service tend to use it daily (62.4%).
4 Note: Smartphones + Smarters
In Mexico, the operators surveyed think that this service is growing rapidly. Over the last twelve months, the use of this service increased as a result of the progress of smartphones. Smartphones represent about 13%4 of the customer base. Mainly Premium customers are
| 36 |
MAVAM | 4. MAVAM Mexico
Chart 38.
Frequency of use for Instant Messaging migrating towards more intelligent terminals and once they migrate they adopt instant messaging as the habitual communication means.
Basis: 149 cases (Users who use IM).
MAVAM confirms the tendency perceived by the operators surveyed, since 80% of those owning an intelligent terminal use instant messaging services.
4.1.4. Voice mail Pursuant to the analysis carried out for this edition of MAVAM, 31.5% of users use the voice mail service. We noticed a decrease in use as compared to the data obtained for Q3 2010 (65%). In terms of frequency of use, 10.8% of respondents are active users of the service (more than once a week). The use of this service does not amount to any kind of expense for 14.7% of the total respondents using the service. 25.9% of the group users represent not to know the amount paid for using the voice mail service. Likewise, the cost category of up to $35 per month is the most frequent range (46.2% of users). The voicemail service is mostly used among those with a postpaid plan (45.3%) compared with those with a prepaid plan (28%). The use of voicemail drops among younger age groups: 26.8% among those whose age is under 35 years old and X1.2% among the population over 34 years.
| 37 |
MAVAM | 4. MAVAM Mexico
4.1.5. E-Mail 54.9% of respondents confirmed that their phones are enabled to set up e-mail accounts. However, only 30.1% of these users has set up an e-mail account on their mobiles. Those users equal 16.5% of respondents. The users who have not set up e-mail accounts stated that the main reason for that was price, and secondary reason is the lack of need for an e-mail o their mobile phones. 81.8% of the users who have set up e-mail accounts have used the service in the last quarter, amounting to 13.5% of the survey.
Chart 39.
E-mail frequency of use Basis: 798 cases (Total sample).
5 Definition of Smartphone.
Only 11% of respondents have terminals enabled to set up e-mail accounts to receive emails automatically (push e-mail). One functionality generally available in smartphones5, but also in the so-called "smarters" (phones that are not smartphones but are enabled for many Internet-related functionalities).
| 38 |
MAVAM | 4. MAVAM Mexico
4.2. Entertainment This section analyzes some forms of mobile entertainment, such as: ringtones, music, images and pictures, videos and mobile TV, and games. In the entertainment analysis, as in the analysis of other VAS, the frequency of use is important, because were the mobile content only kept in the “rarely or occasional� use, the volume in the business would not be the volume necessary to result in a growth driver for operators' revenues. In the entertainment MAVAM also makes a distinction between user types. On the one hand, the users that sometime in the last three months have downloaded entertainment and on the other hand, users who download and use entertainment more than once a week. The grounds on this classification reside in the incorporation of almost daily usage. This will initially increase the business flow for the operator as well as for the content provider. Those who use it eventually are part of future business potential (increasing frequency of use). In line with the proposed classification, downloading mobile entertainment is an occasional habit that varies from 6% of users (video) and 26% (Images photos). The download music and picture tops the list of preferences of mobile subscribers in Mexico. When we analyze only active users (downloading more than once a week), music and images remain the favorite with 11% and 9.9% respectively.
Chart 40.
Download by type of entertainment (Active users) Basis: 798 cases (Total users surveyed).
| 39 |
MAVAM | 4. MAVAM Mexico
In general, these contents are downloaded for free; however, games (39%) and ringtones (49%) are the segments in entertainment that most frequently result in an expense being charged to respondents.
Chart 41.
Free entertainment vs. paid entertainment Basis: Users who downloaded each type of entertainment.
Users that have incurred some kind of cost to download entertainment, spend between $24 and $29 on average. Videos appear as the components with the highest cost for download, but also the lowest in percentage of paid download (only 10%). Prices obtained are only a reference, since the number of users paying for contents is still very low.
Ringtones
Music
Images/Pictures
Videos
Games
Frequency of downloads per month
3
6
5
5
4
Most commonly paid price
$ 15
$ 15
$5
$ 30
$ 30
| 40 |
MAVAM | 4. MAVAM Mexico
4.2.1. Games
(Use and downloads)
82.2% of users use the games that have been preloaded in their phones; only 53.8% use the games more than once a week. The highest frequency of use ranges from twice a week to 3 times a week. Chart 42.
Use of preloaded games
The users who download games (x of the sample %) do it an average of 4 times a month. When downloading is paid, the most frequent expense charged to users is $30 per download. Users who are used to making this type of download at least once a week (active users) represent 4.1% of the total sample. Paid-game downloading appears as the second category in terms of importance (39%), below ringtones.
Basis: 656 cases (Users who use preloaded games).
4.2.2. Music
(Use and downloads)
82.6% of the interviewees have devices that allow music usage, either by radio (67%) or MP3 (69%). 80.5% of surveyed users have listened to music on your cell phone sometime in the last three months. These represent 97.5% of those who have phones capable of playing MP3 files or tune in Radio. The figures show the importance of the mobile music business, especially considering that 79.1% of those surveyed actively listen to music, more than once a week.
| 41 |
MAVAM | 4. MAVAM Mexico
Chart 43.
Listening to music on mobile phone devices Basis: 642 cases (Users listening to music through their mobiles.
Only 11% of users download music to their mobiles actively (at least once a week). The monthly average download frequency is 6 units, subject to an ordinary price of $15 per download; however, 70% of downloads are for free.
4.2.3. Ringtones (Downloads) Ringtones may be considered as the may means of customizing mobile phones, and the first approach towards downloading paid contents. However, these services are losing ground; in our sample only 1.8% of respondents use this service more than once a week. The number of monthly downloads is the lowest in the sample (3 on average), but the highest in terms of proportion of paid downloads (49%).
| 42 |
MAVAM | 4. MAVAM Mexico
4.2.4. Images
(Downloads)
9.9% of users download images and pictures more than once a week; this is the second highest category in the sample below music. On average, 5 downloads are made per month. Only 24% has paid for images, in this case the average value is $5.
4.2.5. Video
(Downloads)
Only 2.6% of users download videos actively, more than once a week, and 90% of the cases the download is for free. However, paid downloads had the highest costs this quarter when compared to the rest of the contents: $30 for each download. The average number of videos downloaded is five per month.
4.2.6. Mobile TV (Visualization) Mobile TV is a service that, from the operator’s standpoint, has not found its business model yet, and people are still having a hard time figuring out what mobile TV really means. In order to avoid users from mistaking TV programming for watching videos online, we introduced such differentiation in this edition within the same question, a distinction between watching an on-line video on the cell phone, watching an air TV program, or watching a “digital TV” program. Only 1% of respondents agreed to watch at least one air TV program in their mobile, and 0.5% agreed to watch “digital TV” in the last three months.
| 43 |
MAVAM | 4. MAVAM Mexico
4.3. Internet access 61.7% % of respondents represented that their phones are enabled for Internet access for different kinds of services (e-mail, messaging, social networks, browsing). The figures show that users are aware of the fact that their phones are enabled to gain access to the Internet, despite the fact that it is worth noting that not all of those phones are smartphones or used to access the Internet, whether due to price or because the terminal is not user-friendly. The use of Internet services on mobile phones is way too lower considering the number of Internet-enabled phones. Only half of the users who own Internet-enabled telephones (26.1% of respondents) accessed the Internet over the last three months; and barely 7.1% of all users have hired a mobile Internet access plan. This gap shows that there is a group of about 19% users that access the Internet but have not hired a plan, and therefore the use is limited, and at the same time this 19% may be captured by offering attractive data plans.
Chart 44.
Internet access via mobile devices Basis: 798 cases (Total sample).
| 44 |
MAVAM | 4. MAVAM Mexico
Chart 45.
Means of access to mobile Internet
The most popular means for accessing mobile Internet is the Internet browser (59%), followed by WAP (28%) and other means such as widgets, Web-apps/apps (10%).
Basis: 208 cases (Users who accessed the Internet from a cell phone in the last three months). Chart 46.
Gasto promedio por mes en el uso de Internet. Basis: 208 cases (Users who accessed the Internet or has set up an e-mail account).
More than half (53.4%) of the users who connect to mobile Internet mentioned an average expense below $200.
| 45 |
MAVAM | 4. MAVAM Mexico
4.4. Social Networking 22.3% of users accessed social networks through their mobile, at least once in the last three months. Facebook is the preferred network and has been used by 19.5% of users more than once a week. Twitter ranks second with 7.5% of frequent users.
Chart 47.
Access to social networks Basis: Total users.
Chart 48.
Access to social networks on the mobile phone Basis: 178 cases (Users who accessed social networks). Multiple choice answer.
If we consider the total users who have accessed social networks through their mobile phones (users who access the Internet frequently plus those who have accessed at least once) Facebook is hegemonic (97.2%) and followed by Twitter (42.1%).
| 46 |
MAVAM | 4. MAVAM Mexico
4.5. Mobile banking
N
In the new era of the mobile industry, those services giving rise to monetary transactions through the mobile will become increasingly important. Banks already use the mobile as an access platform to ease transactions made by customers. The financial industry as a whole is carefully looking at the use of the mobile as a way to include new social layers to the financial system. Meanwhile, credit transfers between cellular phones, maybe one of the first forms of monetary transaction through mobile services, is being used by a large number of subscribers.
E
O S
38.3% have made at least one credit transfer between mobile phones in the last month, but the use of that service is occasional in general. Only 5.4% use that service more than once a week. The use of mobile phones to access banking services is only 3.6%, while 1.9% said to have used the mobile to make payments at least once. The numbers are in line with the rest of Latin America, and although Mexico, together with Colombia and Brazil are the countries with the highest growth in terms mobile banking, still ranks low in terms of the number of people who have adopted it, and also the levels of adoption are tied to the level of bank usage in each country. Still with a low current penetration, expectations are high for money transactions via mobile to expand in the following years. However, the growth of these services has a complexity of its own due to telecommunications and financial regulations.
Chart 49.
Mobile banking N
E
O
Basis: 798 cases (Total users).
S
| 47 |
MAVAM | 4. MAVAM Mexico
4.6. GPS and Maps 15.9% of respondents own a terminal with GPS or maps service; however, only half of them have used the service in the last three months (7% of respondents).
| 48 |
MAVAM | 5. Final conclusions
5
Final conclusions During the first quarter of 2011, value added services in Mexico generated revenues for 1,045 million dollars, which is 35% higher than the amount pertaining to the same period of the previous year. These figures place Mexico as the second valued added sales market, right below Brazil and above Argentina. Value added represents 28% of the sales for operators’ services; which is 3 percentage points above regional average. Mexico is the leading SMS market in America as far as the sales volume is concerned. In the first quarter, the sales of SMS and MMS services reached US$ 626 million.
The revenues from mobile Internet were the highest-growing item (65% in US dollars and 56% in Mexican pesos), thus obtaining a 22% share in the VAS business. 95.5% of mobile subscribers used the SMS service over the last three months. This VAS is so popular that there are almost no differences in use in the different socioeconomic levels. As a general rule, users send from 2 to 5 SMS per day. Instant messaging is growing with the growth of smartphones. 15.9% of the people surveyed have used the service during entertainment. Music and pictures are the most popular mobile entertainment tools in mobile phones; 9.9% and 11%, respectively download these contents with a frequency higher than once a week. The entertainment downloads range from 3 to 6 times a month per user, and they are mostly free of charge. The number of users that received promotional content to their cell phones via SMS was increased by 4 percentage points in 6 months; it grew from 79% in Q3 3011 [sic] to 84% in Q1 2011. Users receive an average of 6 messages with promotional content per month. Out of the total users who received messages with promotional content, 79% of users can actively remember, and almost all of them can remember their content. The operator is the main generator of promotional messages (88%) thus showing a significant development of mobile marketing and a scarce spread of mobile advertising because only 6% of the messages received by users was issued by a mass consumption company. 15. In response to the new advertising formats, as those which require Bluetooth activation, taking a picture to a barcode, etc., 10% to 15% of users are receptive to this type of promotions, 30% to 35% of users show some kind of barriers to reply to the promotional messages, and the remaining users (about 50%) would need more information or analysis before responding to any promotion of this type.
| 49 |
MAVAM | 6. Glossary
6
Glossary The description of the services presented in this report is presented in the following sections.
Messages The services in this category can be defined as: SMS (Short Message Services): sends short text messages. MMS (Multimedia Message Service): sends short text messages with image, photo, or video. E-mail: receives or sends emails via cell phone. Receiving or sending can be done manually, in other words by user’s initiative, or can be activated through the push mechanism, which periodically and automatically receives and sends mail. Instant Messages: service which permits access to instant messaging systems like MSN or Yahoo. Answering Machine or Voice Messaging: gives access to the automatic messages recording service offered by the carrier, in case of receiving calls that can’t be answered.
Entertainment The services in this category can be defined as: Music: service which provides the download of songs to be played in the cell phone. The handset must be able to play several music formats such as MP3, AAC, MP4, WAV, among others. Ringtone: service which provides the download of ringtones to be used in the handset. The cell phone must be able to play multiple formats of ringtones, such as MIDI, AAC, MP3, MP4, WAV, among others. Images: service which provides the download of images and photos to be displayed on the cell phone. The handset must be able to display several formats of pictures and images such as JPEG, GIF, among others. Games: service which provides the download of games to be played on the cell phone, individually, or through internet or Bluetooth connections, in groups. The cell phone must
| 50 |
MAVAM | 6. Glossary
be able to run the games available in the device and also the downloaded ones, and additionally provide Bluetooth or data connectivity for internet access (eg.: EDGE, EVDO, or 3G). Video: service which provides the download of videos or video streaming to be played on cell phone. The handset must be able to play downloaded videos or received video streaming. The cell phone must be able to play videos in 3GP, MP4, WMV, AVI, among others. Open TV: This feature is present in some cell phones and permits user to watch free TV programs with the handset acting as an analogue or digital TV receptor and capturing contents through the same signals (frequencies) received by traditional TV’s at home.
Internet and Location The services in this category can be defined as: Internet Access: service which provides broadband access to the Internet via cell phone or modem. In both cases users must have a data plan contract with the mobile operator. This service has the following characteristics: Cell phone: the internet access from cell phone can be done in the following ways: 1. Using a browser to access the same websites accessed by fixed internet through a computer. Examples of browsers: the ones offered by the cell phone or smartphone (Internet Explorer Mobile, for Windows Mobile), or alternative browsers such as Skyfire or Opera. 2. Accessing the WAP websites inside the Carrier network through WAP browser. 3. Through specific programs installed in the handset (Widget, Web-App) provided by companies like Yahoo Mobile. Modem: devices which can be connected to desktop computers or notebooks. Provides Internet broadband connection using a computer browser (Internet Explorer, Firefox, and others). Social Networks: service which includes all the necessary elements to provide access to social networks such as Orkut, Twitter, Facebook, and others. This access can be done
| 51 |
MAVAM | 6. Glossary
through browser and internet access, both present on cell phones, or through a specific application provided by mobile operators or other companies. Payments and Banking: usually offered by banks or other credit institutions, which allows the access to users accounts in these institutions. These services can range from simple balance consults to the payment of bills or conclusion of investment transactions. N
O E
S
Location Based Services: service which provides users’ geographic location. These services have the following characteristics: Location: can be provided as the following: 1. Through a process of triangulation using information from cell sites and application systems provided by the operator for this purpose; 2. Through the GPS installed in the cell phone. Offered Services: 1. Location: service usually offered by the mobile operator which allows informing the geographic location of a particular subscriber. Eg.: service hired by parents to monitor their children’s habits, or with the purpose of promoting safety. 2. Maps: service offered by other companies providing maps on cell phones, usually to locate addresses, and also permits to locate users in the map if their handsets have a built-in GPS. 3. Contextual Filter: permits the mobile operator, or other service providers, to offer addresses or other types of promotions at stores, restaurants, movies, among others, based on the instant location of users.
Mobile Marketing The services in this category can be defined as: Mobile Marketing: these services are implemented by mobile operators, to advertise the operator itself or other companies for the subscriber base. Usually these ads are sent via SMS. The advertisements can also be sent directly by competitor carriers or other companies, again using SMS messages. Mobile Advertising: similar to Mobile Marketing, Mobile Advertising is also an advertising service implemented by mobile operators or other companies. If the subscribers agree to receive it they can participate of promotions such as free minutes, free SMS packages, and others, as a reward for receiving advertisements.
| 52 |
MAVAM | 7. Technical File
7 Purpose
Data Compilation
Sample Size
Data Collection Period
Addressees
Technical File Analyze the evolution of value added services in Latin America (Brazil, Mexico and Argentina).
Through the Web (Computer Aided Web Interviewing – CAWI), quota sampling per socioeconomic status, age and gender, and geographic place of residence in Mexico.
798 interviews (CAWI). ± 3.5 p.p. statistical error margin, with 95% statistical confidence.
From May 13 to May 30 (Results for the Q2 2011 – MAVAM 2nd Edition).
Both genders from 14 to 65 years; socioeconomic classes ABC+/C/D (pursuant to Mexico’s Criterion); mobile phone users. People who are more familiarized with technology. Therefore, it is expected that some of the results obtained from this study may be higher than the values found in the general population.
| 53 |
MAVAM | 8. Team
8
Team Rafael Steinhauser | President Latin America Jorge Leonel | VP Marketing and Business Development Edson Melo | Marketing Manager Latam
Mariana Rodriguez Zani | Diretor Ines Leopoldo | External International Advisor Mat铆as Guardiola | Research Manager Pablo Castro | Analyst M贸nica Perez Serantes | Designer
Javier Carreto Mares |
| 54 |