Some review, statistics, trends and suggestions for developer, content providers, investors, and mobile startups

1. Vietnam Mobile VAS Market Review
Presented by: GaCon
Hanoi 05/2012

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

3. 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!

4. Vietnam Digital Entertainment
Company - VDEC
• Founded in 2011
• Number of staff: 10
• We focus on mobile – online product development
• Key Services: SMS, WAP, Web
• Website: http://www.vdec.vn
Online – Mobile Reverse Online Sport TV Social Ridesharing Platform
Auction Game Platform Broadcasting
http://daugia321.vn

5. M-VAS Market Review
Yes, I know, same topic but …YOUR CHOICE?

6. 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)

7. 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)

8. 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

9. Number of mobile users:
Still BIG,
• Total number of mobile users: about 45 Millions right?
• ~ 50% of population (Pop: 90 Millions)
• By the end of 2012: ~ 50 Millions (forecast)
(source: several different sources)

10. Number of mobile handsets
Source: Inmobi , the ad-network company accounts for 2.2 billions monthly impressions in Vietnam
Number of mobile handsets in use by the end of 2011: 90 Millions
(source: http://en.wikipedia.org/wiki/List_of_countries_by_number_of_mobile_phones_in_use)

11. 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
Independence Mobile - Elcom
application stores are - 8x10
now available - 5x55
- 8x62
• New big boys:
- MV Digital
- Mecorp
- TeaMobi

12. 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)

13. Revenue Contribution by SMS services
(Application & wapsite provide content still use SMS as
payment or delivery content method)

14. 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)

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

16. 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

17. 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

18. Opportunities and Threats

19. 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

20. 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

21. 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)

22. Market trends

23. 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

24. 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)

25. What should we do?

26. 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!

27. 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?

28. Thank you for listening!
Nguyen Minh Quang
quangnm@vdec.vn
0904862366
quangvdec
/gacon
“Thank my classmate for update
information and help in research” @Yukidaro
/nguyenminhquang

29. Q&A
If YOU need more details
information please email me,
that’s better!

30. 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