The App Effect

Jens Schulte-BockumCEO Vodafone Netherlands

VINT Symposium - 7 June 2011.

=

Apps = Smartphones

6558

6776

83

72

3542

3324

17

28

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

15-18 19-29 30-39 40-49 50-64 Market

Normal Smartphone

Share of type of mobile phone per age group (%). Source:TPCP

Sourc

e : T

ele

com

paper

Smartphone adoption EU Type of phone per age group

Sourc

e : V

F in

tern

al s

ale

s E

U

Netherlands is the Frontrunner!

250 TB

Source : Vodafone Network data

apr-09 jul-09 okt-09 jan-10 apr-10 jul-10 okt-10 jan-11

Other

M2M

HHBD

IOYM

MBB

To

tal n

etw

ork

Te

ra B

yte

s

Data growth from apps, mobile web and email

0

2

4

6

8

10

12

14

-13 -12 -11 -10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Days since first iPhone use

Av

era

ge

Da

ily

MB

Us

ed

Old device

0,75 MB per day

iPhone

6 – 12 MB per day

Dail

y u

se

r M

B’s

Clear iPhone effect

Source : Vodafone Network data

Apps usage insights

.

Beginners

31%

Organizers

26%

Addicts

12%

Socializers

31%

Profiles of apps usersFour groups of users, based on different motives

Source:

9894

87

61

39 38

148

0

10

20

30

40

50

60

70

80

90

100

socializers addicts organizers beginners

Use more than once per day

Use 1 hour or more per day

Apps usage per profile:

The app effect Big impact on our life

10

3432

20

5

0

5

10

15

20

25

30

35

40

totally agree agree neutral disagree totally disagree

“Apps have changed my life”

“Because it makes my life easier…”

“It seems fun and entertaining”

“It’s new and I’m curious about what it does”

“Because it will make me more productive”

Needs / Motivations:

Connectivity

Entertainment

Productivity

Source:

79

71 7066

5550 49

40

28 26 25 24 23

17 16 1610 8 3

0

10

20

30

40

50

60

70

80

90

Favourite usage of apps Social media #1, followed by gaming, news, weather and navigation

Source :

Connectivity

Entertainment

Productivity

M Tu W Th F Sa Su

0%

1%

2%

3%

4%

5%

6%

7%

12am 2a

m4a

m6a

m8a

m

10am

12pm 2p

m4p

m6p

m8p

m

10pm

Total HTC

Thurs Apple

Sunday

0

1000

2000

3000

4000

5000

6000

7000

0

100000

200000

300000

400000

500000

600000

700000

M Tu W Th F Sa Su

Email

Streaming

VOIP (RH axis)

0%

2%

4%

6%

8%

10%

12am 2am 4am 6am 8am 10am 12pm 2pm 4pm 6pm 8pm 10pm

EmailStreamingVOIP

IOYM General Traffic Distribution

IOYM Application Traffic Distribution

Data usage patterns from our network Per day of the week and per day

Source : Vodafone network data

Source : Vodafone network data

12h00

24h00

Daily usage pattern of social media apps

Future outlook

.

Data Explosion, driven by Smartphones and Tablets

Current ownership and intended purchase of a tablet (%) – Netherlands

Tablets will follow:

Smartphone penetration grows fast : >50% of all

device sales

100 MB per month / user

500 MB per month / user

Re-balance

Challenge from free communication Apps

Re-balance to profit from data growth

Grow new revenues

Challenging the way we do business We’re in transition to alternative business models

What are the ingredients for success?

Ensure best network (HSDPA+ / LTE)

Ensure seamless customer experience

Ensure key enablers: safety, payment, distribution