Beyond portals, content and mobile entertainment Mobile service evolution in the Baltics

Transcription

1 Beyond portals, content and mobile entertainment Mobile service evolution in the Baltics Sarunas Chomentauskas, BITE group

2 BITĖ Group, BITĖ Group is one of the biggest telecommunications groups in Baltic countries with 2M mobile customers. The group, which was set up in 2005, consists of UAB Bitė Lietuva, working in Lithuania since 1995, and SIA BITE Latvija, established in 2005 in Latvia. Latvia: 2.3 million citizens Lithuania: 3.4 million citizens 2

3 3 Looking back at 2006

4 Baltic VAS market sizes (2006), mln EUR ,4 Lithuania Latvia Estonia VAS market sizes Subscriber base 5,6 2 1,44 4 Guesstimates based on: 5 eur/user per year outside LT 2.5 eur/user per year in LT

5 A picture of growth but from old horses Lt Lt 12 % 26 % Lt Lt Lt Lt 46 % Lt 52 % Lt Lt 39 % 300 % - Lt WAP WAP content P-SMS MMS P-Voice Mpayments 5

6 Premium services in BITE revenue structure, % 3,6% 4,3% 90% 80% 70% BITE plus BITE 60% 50% 40% 30% 20% 9% BITE plus part in BITE gowth, % 0% % 6

7 Packet data users per quarter (2006 Q2) Lithuania Latvia Estonia Elise BITE Tele EMT LMT Omnitel Guesstimates for 2006 Q2, modeled on assumption of ~11 % penetration where data is not available (outside LT)

8 Mobile data - on new plateau GPRS users, Quarter end Tele2 GPRS Bite GPRS Omni GPRS users Q Q Q Q Q Q Q Q Q Q4 8

9 Mobile data penetration stuck below 30% 30% 2005 January 2006 January 25% 20% 15% 10% 5% 0% Business Residential Prepaid 9

10 10 Going beyond: where to?

11 Going beyond I believe that there are 3 things where doing something today can yield the fruits: (each in itself is necessary but not sufficient) The access tool / UI strategy The gateway / Business model strategy The services / Value creation strategy 11

12 Service=Software Independent consumption enabler in mobile context. Accessory/helper in context with other media. 12

13 13 Workin with what we ve got

14 Threat: bigger guys have the advantage! Examples of apps we find today in the phones: Music recognition (SE Walkman bundled app) Yahoo search Nokia Maps / GPS MS Exchange Podcasting Notable downloadable examples: Fring (IM/Voip) Gmail MiniOpera web browser Yahoo Go Local apps: 0 Typically, all use data connectivity and the service itself is free. 14

15 To do: Big money to be made In Short term (months) Giving the best UI for your service on the phone you can afford, J2ME etc ; Rolling out single purpose apps In Long term (1-2 years) Addressing fragmentation of devices with app distribution capability Small money to be made Operator-customized devices Tuning/personalizing the portal UI Replacing devices with new / more standardized 3G devices 15

16 16 Evolving the business models

17 Where s the market? Free time/cultural activities Telecoms 5% 6% Hotels, cafés, restaurants 6% Health care 6% Food and drink 43% Clothing and shoes 10% Transport 10% Flat, water, electricity, gas 14% Typical basket of expenditures in the Baltics (2005) 17

18 Telco=Gateway By definition, a gate to partners All parties win/win SPs, propose a fair model, please! 18

19 Case in point: Mobile TV Up and running for 1 year now 20 channels streamed live Crappy business model media companies capable only of cable channel approach ,00 EUR 5.000,00 EUR Total LT+LV Costs Net 4.000,00 EUR 3.000,00 EUR 2.000,00 EUR 1.000,00 EUR 0,00 EUR ,00 EUR 19

20 Case in point: Mobile Advertising Letting the free content flourish Admobi mobile advertising network for the whole country. First commercial ads by mobile service providers. ~ 20 mobile sites has connected to the network. 20

21 Mobile Advertising BITE revenues: 50% from mobile ads in BITE WAP sites. 25%* from mobile ads shown to BITE customers on other sites Content site gets 50%- 75% of revenues that advertisers pay Lt Lt Lt Lt Mobile Advertising 21 March statistics: 1 Ad unique views unique clicks CTR - 6,21% CPC - 0,05 EUR April statistics: 1 Ad unique views unique clicks CTR 2,58% CPC 0,05 EUR Lt Lt 800 Lt 600 Lt 400 Lt 200 Lt 0 Lt JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC BITE network earnings mano.labas.lt wap.biteplius.lt

22 Case in point: Mobile Payments Issuer 2. Transfer 99 euros, keep 1 euro Acquirer Merchant 3. Receive 99 euros, transfer 97 euros, keep 2 euros 4. Receive 97 euros My card 1. Pay 100 Euros 22

23 To do: Big money to be made Small money to be made In Short term (months) Connecting the bank account to the phone account Changing short number regime & penetrating the market with easy to set up short number services Finding how free content can survive: nonintrusive mobile advertising Reverse charging data (content site pays, free to user, e.g. streaming); Automatic handling of more and more partners In Long term (1-2 years) Realtime idea of who is the customer and what he s doing Forming VAS interconnection between Operators, enabling cross-operator products Wireless PKI: still looking for a business model RFID / phone link to ID user in physical locations: same; 23

24 Services: relevance, please 24

25 If there s nothing very special about your work you won t get noticed, and that means you won t get paid much, either Tom Peters 25

26 26 Winning the internet first

27 Mobile for lunch, later. Usage data: Rate.ee: users (out of 1,3 million) - Estonians Draugiem LV: users (out of 2.2 million) - Latvians One LV: ~ users (out of 2.2 million) - Russians One LT: ~ users (out of 3,6 million) Lithuanians Business view: Typically web site traffic is ~ daily users Implementation of SMS as the preferred payment method (30 % revenue) Advertising market too small at the time of start to sustain it (30% revenue now) WAP browsing access to service is premium charged (30% of revenue now, ~ users daily on wap per country) 27

28 Ticking off the other checkboxes Some notable examples can be summarized in few sentences: Mobile news: competition drives premium sites to go free, waiting for the advertising revenues Mobile sports: subscription based fan clubs thrive, but growth perspectives low Mobile TV: weak consumption, problematic margin Mobile music: sales of truetones weak, very poor margin Some have more success: Mobile games: strong sales, good margin Fotobazaar: there s really a lot of photos out there Mobile gambling: getting the format right Mobile parking: success where done right (20% Vilnius, ~70% in Tallin, 0% in Riga) 28

29 To do: Big money to be made Small money to be made In Short term (months) Reach to millions. Monetize later or as you go along if possible. Super-relevant for the age group/segment. Can t live without it. Mobile games Mobile music M-payments In Long term (1-2 years) Adressing the segments: women, middle aged Moving out of of air into real problem areas, replacing cash Mobile TV Instant messaging LBS, etc 29

30 Thank you! Sarunas Chomentauskas, Head of mobile internet / BITE group sarunas.chomentauskas@bite.lt You will find the full copy of this presentation available for download. Get more info on the BITE plus partnership progam and start working with us now! Visit 30