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

I’m entrepreneur now!

• Founded in 2011

• Number of staff: 10

• We focus on mobile – online product development

• Key Services: SMS, WAP, Web

• Website: http://www.vdec.vn

Vietnam Digital Entertainment

Company - VDEC

Social Ridesharing Platform Online Sport TV

Broadcasting

Online – Mobile Reverse

Auction Game Platform

http://daugia321.vn

M-VAS Market Review

Yes, I know, same topic but …YOUR CHOICE?

Number of Telcos: 7-> 6

Telcos Number

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

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

Vinaphone 091, 094, 0123, 0125, 0127 ,0129,0124

Vietnamobile 092 ,0188,0186

Beeline 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 Subscriber (estimated)

Viettel 30 Millions

Mobifone 20 Millions

Vinaphone 18 Millions

Vietnamobile 5 Millions

Beeline >1 Millions

Sfone < 1 Millions

EVN Telecom (CDMA) Dead

(source: seft survey)

A lot of “Chém” 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)

(source: several different sources)

Still BIG,

right?

Number of mobile handsets

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)

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

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

• New big boys:

- MV Digital

- Mecorp

- TeaMobi

Independence Mobile

application stores are

now available

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

• 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

• Wap charging:

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 telco’s 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

- Don’t make non-sense production

- Don’t base on idea and think it’s cool

- Don’t lose focus

- Find more sale/distribution channel (Apple & Google

are good but can you make something like

Instagram or Draw Something?

Nguyen Minh Quang

quangnm@vdec.vn

0904862366

quangvdec

/gacon

@Yukidaro

/nguyenminhquang

Thank you for listening!

“Thank my classmate for update

information and help in research”

Q&A

If YOU need more details

information please email me,

that’s better!

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 don’t

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