TNS Copyright

Global Telecoms Insights 2009A world of mobile insightKarin Du ChenneKarin.DuChenne@tns-global.co.zaMarch 2009

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Why do consumers act the way they do?What will they do next?

Are consumers using their mobile potential?

How do different mobile devices and services interact?

How converged is consumer behaviour?And how convergence-ready are they?

Which features and services are positioned for future growth?

Which niche brands will become mass market?

Consumerisation Convergence

Mobility Innovation

GTI 2009 is designed to provide insight into the four key drivers of the telecoms market

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It looks to understand the evolution of global, regional and local trends in mobile technology

32 markets; 20622 respondents; Interviewing Nov/Dec 2008 Regions covered:

•N America: USA, Canada•Europe: UK, France, Germany, Spain, Italy, Netherlands, Sweden•Dev Asia: Japan, Korea, Hong Kong, Malaysia, Singapore, Taiwan, Australia•China: China only•India: India only•Russia: Russia only•Emerg Asia: Pakistan, Indonesia, Vietnam, Thailand•Lat Am: Mexico, Brazil, Argentina•N Africa: Morocco, Egypt•M East: Saudi Arabia, UAE, Kuwait•S Africa: South Africa only

New markets for ‘09: Singapore, Malaysia, PakistanMarkets omitted : Algeria

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What do you need to know?

THE BIG PICTURE

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THE BRAND FACTORWhat is the current state of the consumer-brand relationship?

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Chooses quality over price

Brand is an important driver of purchase

Active pursuit of new products and services

High levels of research prior to purchase

Engages in discussions with friends and colleagues

TNS uses a set of questions to calculate the level of ‘involvement’ a consumer has in the mobile phone sector

An ‘involved’ consumer is categorised as displaying some of the following behaviours:

‘Involved’ and ‘Uninvolved’ consumers are different and by understanding the level of involvement, local market strategies can be developed

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The mobile phone sector continues to engage consumers, although sector involvement is regional

5561

2008 2009

% ‘Involved consumers’ Level of sector involvement – mobile phones

High involvement Average involvement Low involvement

Involvement segmentation: See slide 5 for explanation. Measure defines level of consumer involvement in the mobile phone sector (Highly involved +8%, Involved within 8%; Uninvolved -8% on global average)2008 Base: All mobile users; 134682009 Bases: All mobile users; 17264 1439 333 451 373 460 437 473 492 536 557 489 607 498 494 433 523 2031 724 325 379 432 706 325 349 361 447 506 368 496 377 393 450 7

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TNS Conversion Model profiles the consumer relationship with individual brands, both handset and network providers

UncommittedBrand Users

USERS NON-USERS

Shallow Convertible Available Ambivalent

OpenNon-Users

WeaklyUnavailable

StronglyUnavailable

UnavailableNon-Users

CommittedBrand Users

Entrenched Average

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Single-minded

Passive

Seekers

Shared (committed / uncommitted

• Strong attachment to one brand

• Unhappy with current brand

Uninterested

• Equally attracted to two or more brands

• Committed, but less interested in general

• Do not care which brand they use

Conversion Model also profiles the relationships with mobile phones brands generally

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Consumers are asked a series of questions based on their current use of brands and attitudes to competitors, and are placed in appropriate segments

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As single-minded commitment to brands is declining, substantial numbers are openly looking to switch

6358

50

71

42

5649

65

87

48

73 75

91 9183

510

4

6

4

45

6

5

6

6 6

4 3

4

7 8

11

5

9

14

6

4

1

19

4 5

1

317 14

19

15

24

13

21

21

7

15

14 124 7 98 11 16

4

2112 17

413

2 2 1

Global

2009

Global

2008

Develo

ped

Emer

ging

N Am

eric

a

Europe

Dev A

sia

China

India

Russia

LatAm

Emer

g Asia

M E

ast

N Afric

a

S Af ri

ca

Single-minded Shared Passive Seekers Uninterested

Relationship with mobile handset brands

E: Conversion model brand segmentation: See slide 5 for explanation. Measure defines commitment of consumers to brands in the mobile handset sector2008 Base: All mobile users; 124892009 Bases: All mobile users; 17264 8522 8742 1772 3222 3528 724 2031 523 1380 1513 1370 808 393

%

Local market

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Nokia continues to dominate global brand commitment

6

5

6

3

4

35

8

8

7

4

16

10

10

11

42

75

79

875

76

Nokia

Samsung

Motorola

Sony Ericsson

LG

Committed Open Unavailable / UnawareUncommitted

Users Non-users

% of committed users

2008 2009

77% 78%

49% 49%

53% 54%

52% 56%

47% 50%

E: Conversion model brand segmentation: See slide 5 for explanation. Measure defines commitment of consumers to brands in the mobile handset sector‘% of committed users’ calculated by dividing the number of committed users by the total number of users2008 Base: All mobile users; 134682009 Bases: All mobile users; 17264 11

Local market

data cuts

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Nokia remains the dominant global player, particularly in emerging markets

%

36 3524

44

7

40

17

39

59

34

64

26

70

89

56

12 13

15

11

14

16

13

20

6

12

8

8

12

3

25

12 15

12

12

25

9

5

87

14

4

28

62

12

98

10

8

3

16

8

13 7

5

7

17

45 4

7 5

10

4

24

4

6

2 8

2

3 11

30 1

11 3

124 24 29

21 2715

52

18 14

34

14 11 5 2 1

Global

2009

Global

2008

Devel o

ped

Emerging

N Am

erica

Europ

e

Dev Asia

China

India

Russia

LatAm

Emerg A

sia

M E

ast

N Afri

ca

S Afri

ca

Nokia Samsung Motorola Sony Ericsson LG Apple Other

A5: Brand of main handset2008 Base: All mobile users; 134682009 Bases: All mobile users: 17264 8522 8742 1772 3222 3528 523 2031 724 1513 1380 808 1370 393

Local market

data cuts

Brand market share

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THE PURCHASE DECISION PROCESSHow do consumers decide what they will buy?

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Distress purchases continue to drive purchase decisions, requiring effective mechanisms to be in place to react to these urgent needs

15 11 17 13 14 1226

157 9

1510

3714 15

14 818

1118

13

27

14

55

511

42

12 6

84

10

6

10

6

15

7

2

62 12

24

8 4

2016

631

7

4

9

32

32

3334 24

11

2335

37 3336

37

31

39

37 46

31

30 2541

14

4720

10 69

10

105

1414

13

5 5 819

15

6

6 46

5

86

52

13

8 7 7 86

7

6 6 121

1216

5 0

1

0 2 0 37

2 1 31

4 3 2 0

1

1 21 2 0

0

6 4 4 8 2 4 4 6

24

7 5 10 11 7 11

Globa l (

2009

)Glo

bal (2

008)

Developed

Emer

ging

N Am

eric

aEuro

peDev

Asia

China

India

RussiaLatA

mEm

erg A

siaM

Eas

tN A

frica

S Afri

ca

Gave away old phone

Given phone by employer

Given phone by network provider

Given phone by friends

Dissatisfied with previous phone

Phone stopped working

Phone lost/stolen

Wanted a phone that was better looking

Wanted a phone with more features

Wanted a phone with latest technology

Main trigger for purchasing last phone

‘Want’triggers

‘Convenience’triggers

A11: Trigger to change to current mobile phone2009 Bases: All who have owned more than one mobile: 14016 6757 10507 7873 6143 1559 2950 3364 574 753 494 1190 1033 1158 669 272

%

Local market

data cuts

‘Distress’triggers

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Internet consumer reviews are becoming an important source of information for consumers in developed markets

23

19

19

17

8

14

15

42

43

15

6

53

3

Previousexperience

Contact servicecentre

TV

Newspapers

Promotions

Telecoms retailerw ebsite

Network providerw ebsite

Manufacturerw ebsite

Speak w ith storestaff

Store displays

Internet consumerreview s

Onlineblogs/forums

Speak w ithfriends/colleagues

All sources of information consulted when looking to buy a mobile phone

Global Developed Emerging(42%)

(N/A)

(N/A)

(37%)

(35%)

(15%)

(14%)

(N/A)

(18%)

(15%)

(14%)

(2%)

(21%)

(2008)

32

3

6

11

23

12

24

25

30

36

27

10

34

18

27

23

13

5

8

8

50

46

8

4

64

2

(25%)

(N/A)

(N/A)

(31%)

(21%)

(21%)

(20%)

(N/A)

(19%)

(8%)

(4%)

(2%)

(22%)

(2008)

(55%)

(N/A)

(N/A)

(41%)

(45%)

(11%)

(10%)

(N/A)

(18%)

(21%)

(20%)

(3%)

(21%)

(2008)

A12: Sources of information consulted when buying a mobile phone2008 Bases: 12489 6696 57932009 Bases: All mobile users: 18482 8655 9827

Word of mouth

Retail

Marketing / ads

%

Local market

data cuts15

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Mobile music is a rapidly growing driver of choice, particularly in emerging markets

8

8

8

15

19

21

9

14

34

18

41

Mobileinternet

Games

GPS

Bluetooth

FM / AMRadio

MP3

Mobileemail

MMS

SMS

Videocamera

Still camera

Most important features when choosing mobile phone

Global Developed Emerging

11

5

12

17

8

15

11

14

40

8

37

7

11

6

13

26

24

8

14

31

24

43(40%)

(15%)

(39%)

(6%)

(7%)

(10%)

(12%)

(15%)

(4%)

(11%)

(6%)

(2008) (2008) (2008)

A24: Most important features when looking to buy next mobile phones (top-3)2008 Bases: 12489 6696 57932009 Bases: All mobile users: 17264 8522 8742

%(38%)

(11%)

(51%)

(8%)

(8%)

(12%)

(6%)

(18%)

(7%)

(7%)

(6%)

(42%)

(22%)

(24%)

(5%)

(7%)

(8%)

(7%)

(14%)

(2%)

(17%)

(6%)

Local market

data cuts

Imaging

Messaging

Music

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Retail channels in emerging markets are still heavily fragmented across multiple channels, offering opportunities for large retailers to consolidate

29 31

6

43

16

12

56

39

56

6

4659

1319

28 23

50

15

63

40

50

5

17

12

46

5

8

33 25

7 7 78

2

7

11 619

3 10

13

9

5

10 87

113

7

1313

816

12 8

7

18

7

9 10

5

11

6

5

315 4

1

13 15

7

1

29

1 1

1

1

1

31

556 5

13

1

1316

81 2 3 13 3 4 1 3 6 2 3 3 1 1 2 5

Global

2009

Global

2008

Develo

pedEm

ergin

gN A

mer

i ca

Europe

Dev A

sia

China

Indi a

Russia

LatAm

Emer

g Asi

aM

Eas

tN A

frica

S Afri

ca

Telesales

Internet

Open air market

Generalist store

Consumer electronics store

Manufacturer store

Network provider store

Independent retailer

Sources of purchase for last mobile phone

Retail stores

Other

A9: Source of last phone purchase2008 Base: All mobile users: 124892009 Bases: All mobile users: 17264 8522 8742 1772 3222 3528 724 2031 523 1380 1513 1370 808 393

%

Local market

data cuts17

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USAGE: THE CONSUMER ANGLE

How do consumers use their phone?

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Smartphones are moving from a niche desirable towards mass market penetration levels, especially in Developed Asia

20

13

25

18

27

17

3430

6

14 15

5

21

3

15

Globa l 2

009

Global 2

008

Develo

ped

Emer

ging

N Am

erica

Europe

Dev A

sia

China

India

Russia

LatAm

Emer

g Asia

M E

ast

N Afric

a

S Afr i

ca

A22. Ownership of Smartphones (defined on feature-set of current mobile phone. See study overview for details)2009 Bases: All mobile users: 17264 8522 8742 1772 3222 3528 724 2031 523 1380 1513 1370 808 393

Local market

data cuts19

% of mobile users with a Smartphone

TNS Copyright

Messaging capabilities are diversifying to include MMS, email and IM

17

16

8

11

36

13

12

15

26

40

80

3Blogging

Netw ork provider brow ser

Dedicated brow ser

WiFi

3G capabilities

Bluetooth

Instant Messaging

Push email

Pull email

MMS (video)

MMS (pictures)

SMS

Global Developed Emerging(78%)

(36%)

(18%)

(11%)

(5%)

(8%)

(27%)

(5%)

(3%)

(N/A)

(N/A)

(3%)

(2008)

23

19

10

16

35

13

12

18

24

48

77

5

14

15

6

8

36

13

10

13

28

35

82

3

(69%)

(37%)

(17%)

(14%)

(6%)

(5%)

(30%)

(9%)

(4%)

(N/A)

(N/A)

(4%)

(2008)

(84%)

(35%)

(19%)

(9%)

(4%)

(10%)

(24%)

(3%)

(2%)

(N/A)

(N/A)

(2%)

(2008)% using

A22+B1: Use of connectivity features and services on mobile phone2008 Bases: All mobile users: 12489 6696 57932009 Bases: All mobile users: 15479 7114 8365

Messaging

Connecting

Internet

Local market

data cuts20

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While there is plenty of room for new messaging forms to grow, they are not being used as frequently as SMS

1

5

6

3

5

11

5

4

6

5

8

54

1

4

5

2

3

12

3

3

4

8

13

17

1

8

5

3

3

12

4

4

5

13

19

9

41

42

45

47

46

37

44

47

47

42

37

10

39

30

28

30

27

19

30

30

28

24

18

7

Blogging

Network provider browser

Dedicated browser

WiFi

3G capabilities

Bluetooth

Instant Messaging

Push email

Pull email

MMS (video)

MMS (pictures)

SMS

Daily users Weekly users Infrequent users White space (interested non-users) Rejectors

%%

A22+A23+B2+B4: Use of connectivity features and services on mobile phone + interest from non-users2009 Bases: All mobile users: 17264

Messaging

Connecting

Internet

21

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The mobile internet is critical for giving emerging markets users access to mobile entertainment and music

6

3

2

8

11

15

16

27

5

14

20

3

8

11

2

20

34

1

10

Travel

Health

Automotive

Business/ f inance

Games

Sport

Weather

News

Adult

Picture sites

Video sites

Entertainment

M usic

Gambling

Auct ion sites

Shopping

Virtual worlds

Social networking

Search

Global Developed Emerging(42%)

(16%)

(N/A)

(14%)

(10%)

(5%)

(30%)

(19%)

(N/A)

(N/A)

(N/A)

(30%)

(25%)

(18%)

(16%)

(12%)

(6%)

(6%)

(9%)

(2008)

% visiting mobile internet site

7

3

2

8

11

16

27

27

4

6

14

5

13

13

20

38

1

8

1

4

4

3

7

11

14

6

27

6

20

25

2

8

3

19

31

1

12

1

(37%)

(16%)

(N/A)

(9%)

(11%)

(6%)

(26%)

(12%)

(N/A)

(N/A)

(N/A)

(31%)

(34%)

(18%)

(13%)

(11%)

(4%)

(5%)

(11%)

(2008)

(46%)

(16%)

(N/A)

(17%)

(7%)

(2%)

(38%)

(21%)

(N/A)

(N/A)

(N/A)

(28%)

(11%)

(18%)

(20%)

(14%)

(9%)

(8%)

(6%)

(2008)

A33: Websites visited on mobile phone2008 Bases: All mobile internet users: 9640 6337 33032009 Bases: All mobile internet users: 6792 4789 2003

Connecting

Media

Information

Purchasing

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Mobile music continues to boom with mobile gaming somewhat stagnant

19

9

11

10

46

18

25

26

17

28

38

17

11

8

42

59

5

Upload contentto PC

Upload contentto mobile internet

Sideload games

Download games

Play games

Load caller tunes

Load ringtones

Sideload music

Download music

FM /AM Radio

M P3 player

Load graphics &themes

Live TV

SideloadTV/Video

DownloadTV/Video

Video camera

Still camera

% usingGlobal Developed Emerging

(55%)

(32%)

(4%)

(7%)

(4%)

(15%)

(31%)

(22%)

(15%)

(22%)

(24%)

(18%)

(48%)

(10%)

(10%)

(N/A)

(N/A)

(2008)

25

9

7

9

37

11

17

9

14

31

10

14

40

71

5

5

3

21

22

29

14

40

11

30

21

36

42

16

10

9

9

6

43

53(64%)

(31%)

(3%)

(5%)

(5%)

(12%)

(25%)

(14%)

(11%)

(16%)

(20%)

(14%)

(38%)

(10%)

(7%)

(N/A)

(N/A)

(2008)

(49%)

(33%)

(5%)

(9%)

(3%)

(19%)

(35%)

(27%)

(19%)

(28%)

(27%)

(22%)

(57%)

(11%)

(12%)

(N/A)

(N/A)

(2008)

A22+B1: Use of content features and services on mobile phone2008 Bases: All mobile users: 12489 6696 57932009 Bases: All mobile users: 17264 8522 8742

Imaging / video

Music

Gaming

Local market

data cuts23

TNS Copyright

There is substantial growth still available for mobile content, if service delivery can match expectations

2

1

2

2

14

2

3

4

3

12

19

2

1

1

1

7

13

7

4

4

3

14

6

8

11

6

8

10

6

2

3

2

14

23

9

4

5

5

18

9

12

11

7

8

8

8

2

3

2

20

23

44

47

45

46

26

44

42

42

48

46

38

43

49

48

49

38

30

25

31

33

34

23

29

26

23

28

20

18

30

34

33

34

16

9

Upload content to PC

Upload content to mobile internet

Sideload games

Download games

Play games

Load caller tunes

Load ringtones

Sideload music

Download music

FM/AM Radio

MP3 player

Load graphics & themes

Live TV

Sideload TV/Video

Download TV/Video

Video camera

Still camera

Daily users Weekly users Infrequent users White space (interested non-users) Rejectors

%

A22+A23+B1+B4: Use of content features and services on mobile phone + interest from non-users2009 Bases: All mobile users: 17264

Imaging / video

Music

Gaming

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PDA and GPS functionality appear the most likely niche applications to move towards the mass market

6

6

14

4

2

3

9

4

Videocalling

Microsoftoffice

capabilities

PDAfunctionality

Access tosubscribedinformation

Homecontrol

Mobilewallet

GPS

Locationbased

services

Global Developed Emerging

(3%)

(5%)

(3%)

(1%)

(4%)

(9%)

(3%)

(3%)

(2008)

% using

10

8

21

5

2

4

11

5

4

5

10

4

2

3

8

3(5%)

(6%)

(4%)

(2%)

(5%)

(12%)

(4%)

(6%)

(2008)

(2%)

(5%)

(2%)

(1%)

(4%)

(6%)

(2%)

(2%)

(2008)

A22+B1: Use of incremental features and services on mobile phone2008 Bases: All mobile users: 12489 6656 57932009 Bases: All mobile users: 15479 7114 8365

Local market

data cuts25

TNS Copyright

The mobile phone is fast becoming the preferential method of communicating at work, led by emerging markets

3442 43

28

4249

3629

21 22

44

21

4233 29

4

4 6

3

4

6

8

3

2 1

6

0

2

01

3

23

2

3

3

3

3

1 1

5

1

2

0 1

6051 48

67

5242

5365

77 77

45

79

5467 68

Globa

l 200

9Glob

a l 200

8Dev

elop

edEm

ergin

gN A

merica

Europ

e

Dev A

sia

China

India

Russia

LatA

mEm

erg

Asia

M Eas

t

N Afri

ca

S Afric

a

Mobile phone

VOIP (mobile)

VOIP (fixed)

Fixed line

Split of work related phone calls

I1: Number of calls made during a day – wok onlyI2: Proportion of work calls made by different technologies out of every 10 calls2008 Base: All respondents (I1); 16274 All who make work calls (I2): 97072009 Bases: All respondents (I1): 19942 18219 6806 13136 2147 2800 1860 4464 2356 1392 1818 2055 313 409 328All who make work calls (I2): 11478 10455 4390 7089 1248 1741 1400 2876 804 945 1038 1042 146 137 100

%

Number of work calls made during a day

9 9 14 7 9 18 17 7 2 13 12 4 4 2 5

Local market

data cuts26

TNS Copyright

Five key recommendations for 2009

• Focus on ‘winning in retail’– Consumers are more reliant than ever on retail channels to research the sector and make purchases– With industry marketing communication budgets under pressure in 2009, target consumers who are in the buying

process

• Tailor channel and point of sale strategies to the local market level– Drivers of purchase, research touchpoints and channels of purchase vary greatly, even within regions– Effective targeting of resources can deliver incremental benefit

• Capitalise on consumer demand for content sharing– Consumers are content hungry and find multiple ways of sharing music, images and video– Growth of alternate devices in emerging markets will put pressure on the role of the mobile phones as the primary

imaging, music and internet device for consumers– This presents real opportunities to differentiate for devices, services and software, but consumers are unwilling to incur

incremental revenue

• Target niche consumer needs– Niche brands continue to gain traction in crowded marketplaces, especially amongst the ‘involved’, higher margin

consumers– Features driving purchase continue to become more diverse

• Expand the consumer communications experience to dr ive differentiation– New opportunities exist in voice and messaging to provide new and better consumer experiences, with features like

mobile IM and email gaining market traction– Little ground has been made in moving social networking and Blogging experiences to the mobile phone

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TNS Copyright

Global Telecoms Insights 2009A world of mobile insightKarin Du ChenneMarch 2009Visit our website www.tnsresearchsurveys.co.zaOr www.tns-global.comOr contact me on 011 778-7780

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