Mavam México 2013 -English

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MAVAM Acision Monitor for Mobile VAS © Acision, August 2013. All rights reserved. Prepared by MEXICO 4 TH EDITION

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Transcript of Mavam México 2013 -English

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MAVAMAcision Monitor for Mobile VAS

© Acision, August 2013.

All rights reserved.

Prepared by

MEXICO

4TH EDITION

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MAVAM | Acision Monitor for Mobile VAS

The fourth edition of MAVAM (Mobile Value Added Service Monitor) Mexico,launched by Acision, is specifically focused on Mobile Messaging and Value AddMobile Services (VAS), and strengthens its commitment to provide the industry andoperators with the intelligence to understand market dynamics and launch and tailormobile value added services for increased consumer uptake.

The rise in Smartphone popularity is bringing the internet to more and more users'hands. With this, new ways for end user interaction and connectivity are beinglaunched over networks all the time, and today, SMS and chat-based over-the-top(OTT) and instant messaging services coexist with traditional voice services. Thisprovides consumers a variety of ways of communicate, who can choose which servicesuits their needs best dependent on the recipient and user usage trends.

The report highlights that the number of mobile subscribers in Latin Americacontinues to grow, resulting in an increasing use of value added services and totalrevenues. In Mexico, Value Added Services represent 33% of operators' sales, equivalent to$MEX 15.09 billion (USD 1.21 billon) in the second quarter of 2013.

SMS services alone generated $MEX 7.77 billion in the second quarter of the yearaccounting for 52% of VAS. Mobile Internet revenue was recorded at $MEX 4.80billion in the same period and represents a 32% of VAS.

Operators concur that SMS is still very important, especially for the 80% of thepopulation who do not have a Smartphone. In Mexico, operators have also introducedpackaged pricing plans to include SMS and mobile data, with plans incorporating alarge number of SMS to accommodate usage.

In addition, we are seeing a trend where today’s consumers are messaging more over anumber of different platforms and via multiple devices - a global phenomenon, whichwe have seen not only in our research but across other analyst and industry datapoints. Today, tech-savvy consumers want something ‘extra’ – a combination ofuniversal reach, uncompromised reliability and enriched features – which can only befulfilled by using multiple services concurrently. Today there is no single application,that meets all consumers messaging requirements which works across any platform,any device at any time. But can operators fulfill a role by providing one singlechat/messaging service in the future?

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Editorial

Fatima Raimondi

Acision

President Latin America

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MAVAM | Acision Monitor for Mobile VAS

With chat OTT services now being incorporated into different platforms, such as socialnetworks, there are some moves towards consolidating platforms. However, mobileoperators globally are taking a number of approaches to address this trend, by eitherpartnering with OTT partners or launching their own Rich Messaging and RCS typeservices, which may one day provide one access point for all messaging. Whenquestioned about such as service in Mexico, referring to the GSMA’s RCS initiative,“Joyn”, respondents showed a hypothetical acceptance with only 12% of thosequestioned stating they would not use it.

In addition, operators are looking at ways to enrich messaging services, such asenhancing the traditional SMS experience. In this report we highlight some of theservices which operators can activate across their network and their appeal to consumers.When questioned about a range of services, these triggered some high interest, showingthat if operators were to launch some of this functionality it would fit with consumerexpectations, and enable new routes for service monetization and incremental revenue.We hope you find the report interesting reading, providing analyses on user preferencesin chat services, instant messaging, SMS and MMS, as well as the possibilities ofgenerating other revenues based services over SMS that empower the value addedbusiness and user engagement in Mexico.

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MAVAM | Acision Monitor for Mobile VAS

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Index

3 Editorial

6 1. Introduction 7 1.1. Value-Added Services in the World11 1.2. Value Added Services in Latin America14 1.3. Value Added Services in Mexico

17 2. MAVAM (Acision Monitor for Mobile VAS)

18 3. Messaging services (Special topic)20 3.1. SMS28 3.2. MMS30 3.3. Instant Messaging (IM)35 3.4. SMS vs IM39 3.5. Joyn

40 4. Mobile Internet40 4.1. Use of the Internet through Smartphones41 4.2. Plan Type41 4.3. Internet uses on the Smartphone42 4.4. Social Networks44 4.5. Mobile Banking44 4.6. Mobile Commerce45 4.7. Maps and location45 4.8. Marketing and Mobile Advertising

47 5. Conclusions

50 6. Glossary

53 7. Technical File

54 8. Team

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The year 2013 has been focused on operators launching high speed, fixed (Fiber), as wellas mobile (LTE/4G) networks. In the United States, LTE launches are contributing tomarket growth, while Europe is a region still dominated by 3G. In Latin America, tworaces are taking place: one for 3G universalization, together with a decrease inSmartphone prices with Firefox supported web phone expectations, and the other, forLTE networks to launch which, as of the closure of this report, stood at 21.

In developed countries, handset-grant elimination models, device-to-device shareddata plans and operators' information systems redefinition are being tested, so as tooffer integrated services and customized options that will allow fostering consumptionand increasing the ARPU.

This global crisis and the market dynamics are generating a new merge and acquisitionprocess among operators as well as through the purchase of, or interest in, applicationand content companies.

MAVAM | 1. Introduction

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Introduction1

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Graph 1.1

Analyzed Operators

MAVAM | 1. Introduction

1.1. Value-Added Services in the World

To understand the value added services (VAS) business worldwide, we analyzed VASevolution across the biggest mobile operators in various regions around the world. Wecompared the Q1 values for 2013 and the same period in 2012, except for China Mobile,which publishes annual data as of the closure of 2012 and is compared to 2011.

The companies evaluated are:

• América Móvil – Latin America• AT&T - United States• China Mobile• Orange (France Telecom) - France• NTT Docomo - Japan• Telecom Italy• Telefónica• Telefónica Spain• Telefónica O2 United Kingdom

• Telefónica O2 Germany• Telefónica O2 Ireland2

• Telefónica O2 Czech Republic• Telefónica Latin America

• Vodafone• Vodafone United Kingdom• Vodafone Germany• Vodafone India

1 As of the closure of this study, Telefónica

was in the process of selling this operation.2 In the sale process as of the closure of

this edition.

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In most cases, these operators suffered decreases in their total ARPUs (Voice+VAS) indollars, some of which is due to the change in exchange rates.

Among the companies studied, ATT kept its ARPU stable and Vodafone Germanyincremented it. European suppliers register ARPU’s sharpest drops for different reasons;firstly, they cite that the economic crisis has been preventing greater consumption. On theother hand, some companies mention in their financial statements, that it is predominantlydue to the negative impact of EU Regulation 531, which by mid-2012, imposed controlover retail prices of roaming services and a reduction in mobile termination rates, amongother regulating measures. And lastly, increased competition has pushed service pricesdownwards even more as operators fight to retain their customers.

In the case of Vodafone Germany, the drop in voice ARPU is compensated by VAS as aresult of the increase in Smartphone adoption and SMS, voice and data packages. As a

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MAVAM | 1. Introduction

Graph1.2

Total ARPU Variation - Selected OperatorsIn USD - Q1 2012-2013

Source: Convergencia Research based onoperators' financial statements

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MAVAM | 1. Introduction

result, Vodafone‘s network plans are tailored to reflect this, which include SMS, unlimitedcalls, and a large capacity for data services for any Smartphone model, which may also becombined with fixed services, such as ADSL.

ATT maintained its ARPU as the drop in voice usage is compensated with VAS generatedby Smartphones as well as by the new users who choose a more economical data plan line.NTT Docomo drops are partly explained by the yen devaluation compared to the dollar,which accumulated 12.8% in the last year.

In the case of Telefónica Latin America and América Móvil, the ARPU fall is mainlyexplained by the local currencies devaluation compared to the dollar (Brazil, Argentina,Venezuela, among others), which is not compensated by the appreciation of othercountries' currencies (Mexico, Colombia, Peru).

Graph 1.3

VAS Share / ARPU ServicesIn USD – Q1 2013

3 In the sale process as of the closure

of this edition

VAS ARPU continues increasing its share over the total revenue. NTT Docomo, TelefónicaO2 United Kingdom, Telefónica O2 Ireland3, Orange (France Telecom), and VodafoneUnited Kingdom, already obtain 50% or more of their value-added revenues.

Source: Convergencia Research based onoperators' financial statements

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MAVAM | 1. Introduction

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Graph 1.4

Variation in revenue contribution for Voice services vs. total ARPU VASBetween Q1 2013 and same period in 2012

AT&T reports on SMS combined with voice rather than separately, so their VAS cannot becompared exactly to the rest of the operators.

Although, VAS relevance grows, in absolute terms, some operators also suffered drops inVAS as well as Voice ARPU. Generally, they are European operators and this is explainedby the crisis and competition.

Source: Convergencia Research based on operators' financial statements

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MAVAM | 1. Introduction

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1.2. Value Added Services in Latin America

In the second quarter of 2013, Latin America registered 687.354 million mobilesubscribers and 116% penetration. This year’s growth in the sector will be guided by a)increased Smartphone adoption and the potential positive effect of Webphones with aFirefox operating system that were launched in late June 2012, and to a lesser extent,tablets; b) LTE service evolution in Mexico, Colombia and Paraguay and LTE launchesin Brazil, Chile and other countries to follow later this year and c) development ofother value added services, such as mobile payments, content, operator OTT servicesand M2M.

Spectrum bids expected in different countries for the next year could bring incorporationof new players. As of the close of this report (June 2013) for instance, DirecTV hadobtained spectrum in Colombia. It is also possible that, as from this year, some mergersand acquisitions may take place.

Lines and revenue growth rates in Latin America, which are higher than those ofdeveloped markets, are strategic for operators groups. For example, in the case ofTelefónica, revenues generated in Latin America are already equivalent to 51% of thegroup's revenues, and in the case of América Móvil, Latin America's strength allowed it tostart, its expansion towards the European continent, between 2011 and 2012, with theacquisition of interests Dutch operator KPN, among other acquisitions.

Operators believe increasing the postpaid database due to the rise of Smartphones and, atthe same time, they restrict the accounting criteria of prepaid lines, so in some casesdecreases are observed in the number of lines.

Graph 1.5

Smartphones and mobilebroadband lines share

over the total linesQ2 2013

4 Excluding Nextel

Source: Convergencia Research

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MAVAM | 1. Introduction

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In several countries, the ARPU is adversely impacted by a reduction in interconnectionrates. Voice traffic appears to grow although prices are reduced by the packetizing effect.

SMS and MMS service usage continues to grow but at lower rates than previous years.Latin America still isn’t showing a cannibalization effect from instant messaging (IM)and OTT platforms, such as in Europe. Meanwhile, SMS prices also suffer reductionsdue to packetizing.

Graph 1.6

Mobile telephony growth bytype of revenue

Q2 2013 variation vs.Q2 2012

variation in USD billions

Source: Convergencia Research

Graph 1.7

Mobile telephony sales bytype of revenue

Q2 2013 vs. Q2 2012 in USD billions

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MAVAM | 1. Introduction

During the first semester, some devaluations (Argentina, Venezuela and Brazil, amongothers) and local currencies appreciations occurred, and as a result, total revenuesmeasured in dollars were affected. Meanwhile, in the local currency, most countries sawan increase in their total sales.

Mobile broadband connections represent 20% of the lines, and Smartphones 18%, andboth of which push VAS share in total revenues.

Total revenues in the second quarter represented 25.29 billion dollars, growing 12%compared to the same period in 2012. Voice generated USD 13.96 billion and had a 1%drop in dollars. VAS increased 24% and generated USD 7.67 billion during the quarterand, as a logical consequence of the rise in Smartphones adoption, handset sales grew by61% compared to 2012 and added up to USD 3.64 billion during the quarter. Revenuegrowth is therefore driven primarily as a result of VAS and devices sales.

VAS represents 35% of Latin America operators' revenues. Mobile internet was the greatestrising VAS service(33%) and represents 50% of the total VAS market. SMS represents 41%of VAS and grew 17% in the second quarter 2013 compared to the same period of 2012.

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Graph 1.8

VAS sales shareQ2 2013 in USD billions

Graph 1.9 VAS ARPU share / ARPU ServicesQ2 2013 in USD

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MAVAM | 1. Introduction

1.3. Value Added Services in Mexico

In the last quarter of 2012, Telcel and Movistar launched the first LTE networks in the country, while Nextel started rendering 3G services in Mexico. These technologicalevolutions turn Mexico into one of the countries taking the lead in the evolution towardsthe fourth generation mobile technology. This technology is available in ten cities through Telcel.

At the close of the second quarter in 2013, Mexico had 98.84 million mobile lines(excluding Nextel), the equivalent to an 89% of penetration over the population. Growth for the second quarter of 2013 was 5% compared with the same period in 2012.

All operators had negative variations between 3% and 11% in their ARPUs (local currency)as a result of the drops in interconnection rates that impacted on the voice and SMS businesses.

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Graph 1.11 Market share by operatorIn thousands of lines for 2Q 2013

Graph1.10 Mobile linesby operator2Q 2013 variation vs. 2Q 2012

Source: América Móvil, Telefónica and Cofetelbalance sheets. Iusacell estimated.Excluding Nextel.

Source: América Móvil and Telefónica balance sheets. Iusacell estimated. Excluding Nextel.

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MAVAM | 1. Introduction

Mobile business net sales, including handsets, in the second quarter of 2013, were$MEX 57.05 billion (USD 4.57 billion) and had a 10% year-on-year increase in thelocal currency (19% in dollars).

In the case of voice services, the year-on-year variation was 1,13% (9,36% in dollars),equivalent to $MEX 31.15 billion (USD 2.49 billion) of invoicing in the second threemonths of the year.

Handset sales grew by 40% in Mexican pesos (51% in USD) and accounted for $MEX10.80 billion (USD 0.86 billion).

Value added services, driven by mobile internet services, are the growth engine formobile telephony revenue in Mexico, which grew 13% in the local currency (22% inUSD) and represented $MEX 15.09 billion (USD 1.21 billion).

Mobile internet accounts for 32% of VAS and, in the second quarter of 2013, itachieved sales for $MEX 4.80 billion (USD 0.38 billion), 51% more than in thesecond quarter of 2012, as a result of Smartphone growth and the operators' strongcompetition on mobile internet, both 3G and LTE services (although networkcoverage is only just beginning).

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Graph1.12 Total ARPUmain operatorsIn MEX$ 2Q 2013 vs 2Q 2012

In USD 2Q 2012

Graph 1.13 Mobile telephony business net sales In millions of $MEX and billions of USD 2Q 2013 vs. 2Q 2012

Source: Convergencia Research calculations based on operators' balance sheets. Excluding Nextel

Source: América Móvil and Telefónica balancesheets. Iusacell estimated. Excluding Nextel.

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MAVAM | 1. Introduction

SMS and MMS sales in the second quarter were of $MEX 7.76 billion (USD 0.62billion), with no variations in local currency compared to the second quarter 2012(8% more in dollars). The lack of growth in revenue is a consequence of the reductionin interconnection rates and the packages on offer with other services. Operator plansfocus on large SMS bundles instead of unit payment to support their use against thedevelopment of instant messaging. Both effects reduce the average price of SMS sent.

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Graph 1.14

VAS sales by type of service In billions of $MEX and billion of USD 2Q 2013 vs. 2Q 2012

Source: Convergencia Research calculations based on operators' balance sheets. Excluding Nextel

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MAVAM | 2. MAVAM (Acision Monitor for Mobile VAS)

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MAVAM (Acision Monitor for Mobile VAS)2

The Acision MAVAM study's objective is to analyze the evolution of services in LatinAmerica. This has been carried out in Brazil since 2009 and in Mexico and Argentinasince 2010.

This Mexican edition has a new content structure adapted to support the changes inthe market analyzing new aspects of mobile value added services.

This edition has the following characteristics:

1. 825 internet surveys (CAWI) were carried out. As explained in previous editions,the data collection method generally derives from users who are familiar withtechnology, so some data (explained in the text) may not be extrapolated to thetotal number of mobile telephony subscribers in Mexico.

2. 50% of the surveys were performed in the Federal District and the remaining50%, in the rest of the country.

3. This edition's special topic is messaging services,and special emphasis was placed on the analysis ofSmartphone users; therefore there are a higher

percentage of them in comparison to what isestimated for Mexico.

4. Other topics analyzed in thisedition include: Mobile internet, socialnetworks, mobile commerce, mobilebanking, maps and location, andmarketing and mobile advertising.

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MAVAM | 3. Messaging services (Special topic)

In December 2012, the first SMS turned 20 years old. Since then, short messages viamobile networks have turned into a pillar of mobile communications, due to its ubiquityas well as in terms of profitability for the operator. SMS has won popularity around theglobe to its simplicity and reliability. In Latin America, with a prepaid base that may bearound 80% and 90% of subscribers and an ARPU of around USD 10, the price rationbetween SMS and minute of voice was fundamental when expanding the frequency of useof text messages. In those countries where SMS was introduced with a unit value permessage sent substantially lower than that of voice minute, the frequency was higher5.

In 1996, ICQ was created, the first computer instant messaging system. Then, ICQ wassold and, as from 1999, Microsoft Messenger has turned into the number one desktop

chat platform. Some years later, MSN changed its name forWindows Live Messenger until 2011, when Microsoftbought the IP voice system Skype and decided tointegrate, under this latter brand and platform,instant messaging and IP voice services.

With Smartphones, instant messaging(IM) reached mobile phones and usersadopted it at high speeds. In previousMAVAM editions, we could observethat, despite the many entertainmentoptions, the telephone's mainfunction was still communicationwith others: voice, SMS, e-mail,instant messaging and socialnetworks.

The instant messaging growth issuch that according to Informaconsulting firm, in 2012, for thefirst time, more chat messagesthan SMS messages wereinterchanged in the world.However, neither serviceis a perfect substitute:SMS may be sentfrom, and received

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Messaging services (Special topic)3

5 See MAVAM Brazil, Mexico,

Argentina, earlier editions

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MAVAM | 3. Messaging services (Special topic)

in, every phone and from any operator in the world, while instant messaging systems arealmost restricted to smartphones and also require data connection.

Users' appetite for instant communication gives rise to new Chat companies with variedbusiness models. From the emblematic BlackBerry Messenger (BBM) linked to themanufacturer's operating system, to WhatsApp -which plans to start charging for itsservices at some point- to Line, which revenue comes from the sale of digital assets(stickers and games). Moreover, besides text chat, messaging platforms add functionalitiessuch as sending photos, IP voice and other communication alternatives.

The number of IM ventures is giving rise to a merge and acquisition wave, where anymember of the telecommunications value chain may be interested in acquiring or beingacquired by another one. For example, Facebook acquired Beluga, Deustche Telecombought Pinger, Yahoo acquired interest in Kakao and Samsung has shown some interestin MesaageMe and Viber, according to versionscirculating in different media.

Operators and even social networks try to incorporate chat for their customercommunities. For example, in 2011,Facebook launched Facebook Chat;in 2012, Telefónica launched itsTuMe rich communicationsapplication. And it is preciselyrich communications that themarket aims at. Even withinitiatives like the Joynapplication, driven by operators and manufacturersthrough the GSM Association.

All these transformationshappen at record speeds, thatis why the special topic of thisMAVAM edition is instantmessaging.

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MAVAM | 3. Messaging services (Special topic)

3.1. SMS

The 90% of respondents used the text messaging service (SMS) during the last threemonths. There seems to be a reduction in the number of people who use SMS comparedto previous MAVAM editions; however, the samples are not accurately comparable, as inthis edition, there is a higher percentage of Smartphones, because it is aimed at analyzingthe Smartphone user segment in particular.

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Graph 3.1 Test message users (SMS) Sample: total sample (825 cases- 1Q 2013)

Graph 3.2 SMS: Feature Phone Usersvs. Smartphone UsersSample: Feature Phones 141 cases, Smartphones

684 cases (1Q 2013)

3.1.1. SMS frequency of use

According to Cofetel (Comisión Federal de Telecomunicaciones) between 2012 and 2011SMS traffic grew 15%. But in the first quarter of 2013 the forecasted growth compared withthe same period of 2012 was only 1%. SMS sent by mobile subscriber drops 6% from anaverage of 82 SMS per month during the first quarter of 2012 to an average of 78 SMS permonth during the first quarter of 2013. However some operators agreed that the SMSbusiness would remain stable regarding users and revenue in the short term.

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MAVAM | 3. Messaging services (Special topic)

In the MAVAM survey the frecuency use of SMS is similar between Feature Phones andSmartphones. The most frequent value (44% of Smartphone users and 46% of usersFeature Phones) is, in both cases, between 2 and 5 SMS per day.

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Graph 3.3 Evolution of SMS sent over the first quarterCofetel data

Graph 3.4 SMS (Text Messages) frequency of useSample: Smartphone users (611 cases) - Feature Phone users (135 cases)

Average SMS per subscription Millions of SMS sent

Smartphone Feature Phone

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MAVAM | 3. Messaging services (Special topic)

3.1.2. Plans and recharges

In MAVAM's sample, the preponderant hiring modality is prepaid, both for Smartphones(50%) and Feature Phones (85%).

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Graph 3.5

Hiring plansby type of device

Sample: Smartphone users (684 cases) -

Feature Phone users (141 cases)

Graph 3.6

SMS plans and recharges (Postpaid)Sample: Postpaid (364 cases)

38% of those who have a postpaid plan say that it includes up to 100 SMS; in thesecond place are those who do not know how many messages their plan includes (21%)and the ones who pay per message sent (21%). 40% do not need to hire additionalSMS to their plan.

Smartphone Feature Phone

SMS planes SMS frecuencia de recarga

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MAVAM | 3. Messaging services (Special topic)

People who told they had a prepaid plan were asked how many SMS were normallyincluded in the recharges they bought: 70% were not able to specify this information, whichcould suggest that there are opportunities to improve the way in which prepaid users areinformed about offers or SMS recharge alternatives, or that initial recharges are enough.

14% answered that the most frequent recharge modality is the option with less than 30 SMS.

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Graph 3.7

SMS plans and recharges(Postpaid)Sample: Prepaid (461 cases)

Graph 3.8 Difficulties in Smartphone SMS useSample: Smartphones - Multiple Choice

3.1.3. Difficulties in SMS use

Questions were made about the difficulties experienced regarding SMS and MMS use inSmartphones and Feature Phones.

Smartphone users pointed out that difficulties were the cost (53%) and the impossibilityof knowing if the message has been delivered (48%). Meanwhile, for 38% of those whohave a Feature Phone, delivery speed is the main barrier, and second (48%), they agreewith Smartphone users on the impossibility of being certain if the message has beendelivered or not.

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MAVAM | 3. Messaging services (Special topic)

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3.1.4 SMS relevance

To know the relevance SMS service has for users, they were asked what they would feel ifoperators eventually eliminated the service. 53% considered that the lack of SMS service would

represent a nuisance. This may lead to think that the level of substitution of SMS for IM isnot total and that it has certain characteristics that user’s value and consider, to begin with, asirreplaceable by another service or that the substitution process is incipient between onemodality and another or that SMS is an intrinsically natural service to mobile telephones.

3.1.5 New SMS-based services

Due to the transformation time of the messaging business explained at the beginning ofthis chapter, it is interesting to analyze the consumers' willingness in front of newfunctions that could be offered together with the SMS service.

To find out about willingness, two questions were asked: one for users to indicate theappeal of a list of services and another one to indicate the appeal of a list of functions thatcould be offered with the SMS.

Graph 3.10

(Detailed) Reaction in frontof an eventual elimination ofthe SMS service.Sample: SMS Users 818

Graph 3.9

Difficulties in Feature Phone SMS useSample: Feature Phones - Multiple Choice

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MAVAM | 3. Messaging services (Special topic)

3.1.5.1. Appeal according to the type of serviceRespondents were asked how appealing the following services would be for them.

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A message service that would ensure immediate delivery of all messages. For example: If you sent a WhatsApp

message to a friend but at that time your contact did not have access to internet, the messaging service would send

a message VIA SMS, ensuring that your message is delivered immediately.

A message service through which you may send ALL your messages to all your contacts, friends and family without

worrying which means to use. Your message will be delivered regardless of the means that your contacts would

rather use.

A message service through which you may reach everybody regardless of the means each of them is using at that

time. For example: You are sending a message to three friends. Two of them are using WhatsApp and another one,

SMS. The message will reach the three of them without your needing to shift from WhatsApp to SMS or vice versa.

A message service where you may receive all your messages regardless of the fact if you are using a Smartphone,

computer or tablet. For example: A friend of yours sends a message from his/her mobile phone. Your Smartphone is

off and you are using the computer at that moment. You will receive the message in your computer instantly.

An instant message service where you have a single history of all your conversations, regardless of the means used

(Smartphone, tablet, notebook, desktop). For example: you and your friend are communicating via SMS or Facebook

Messenger. You visualize all the messages in a single history.

To define the appeal of each of the functions, respondents were asked to assign a score from1 to 5 according to how appealing they found them, 1 being not appealing at all and 5,extremely appealing.

Even if we can observe that a service which allows receiving all the messages regardless of thedevice being used is the one with the highest average score (4.04), the rest of the options arealso around 4 points on average. From here we may conclude that a service unifying allthese characteristics would be quite interesting6.

The service that undoubtedly obtains the lowest score is the single message history (3.55).

6 Multiple comparisons were carried out

through a free distribution method (i.e., free

from assumptions about the distribution of

these data).

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MAVAM | 3. Messaging services (Special topic)

3.1.5.2 Appeal of functions offered together with SMSTo this aim, respondents were asked how appealing they would find the functions listed belowif they were offered together with the SMS service.

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Graph 3.11

New services appealSample: SMS and IM Users - 680 cases

1. Presence: it shows whether your Smartphone is connected

2. Message notice: an indication of when an SMS was delivered/opened

3. Black List: blocking people who you do not wish to receive messages from

4. White List: presetting the people that you wish to receive SMS from

5. Automatic answer: Similar to the e-mail out of office function

6. Automatic subject: Similar to the e-mail automatic subject

7. A copy of the messages: all your SMS messages are sent (as a copy) to your e-mail

8. Collect SMS: when the addressee is the one who pays for the SMS if, for example, the SMS

issuer had no prepaid credit

9. Prepaid SMS: for when you want to give courtesy credit, a text message for the person to be

able to answer your message without paying for it

10. Forward messages: when you ask for an SMS to be sent to a tablet or notebook that

you preset

To define the interest in each function, respondents were asked to assign a score from 1to 5 according to how interesting the function was, 1 being not interesting at all and 5,extremely interesting.

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MAVAM | 3. Messaging services (Special topic)

In general, all functions were well qualified (average of 3.79 over a maximum of 5). Themessage notification function is among the ones that were scored the best, with a score of4 in most cases. This is consistent with the SMS barriers that also posted high percentagesboth in Smartphone users and Feature Phones users. Other functions that proved to bereally interesting as well were Black Listing, Prepaid SMS and Presence.

The functions related to presence and delivery certainty are typical characteristics ofinstant messaging. This could be telling us that the “instantaneity” value proposal thatinstant messaging has imposed on users is being expanded to every service.

Combining the Black Listing option -in order not to receive messages from certaincontacts- to the possibility of White Listing, it can be said that there is some potential todevelop a function that allow users to manage who are the people that they would like tointeract with.

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Graph 3.12

Additional functions appeal

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MAVAM | 3. Messaging services (Special topic)

3.2. MMS

The 69% of respondents used the MMSservice at least once during the last threemonths. This figure is affected as theMAVAM sample selected on this occasionhas high Smartphone percentages.

In the case of Feature Phones, only 28%of users used the MMS service in the lastthree months. This value may be closer tothe users’ average in Mexico.

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Graph 3.13 MMS use in the last three monthsSample: 821 cases

Graph 3.14 Reasons for increasing MMS frequency of useSample: MMS Smartphone users who increased MMS use - 654 cases - Multiple choice

96% of those who use MMS and have a Smartphone expressed that during the last year theyhad increased the use of multimedia messaging. When asked about the reasons for theseincreases, most of the users (74%) identified reasons different from those stated on the list ofsuggested options.

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MAVAM | 3. Messaging services (Special topic)

They were also asked about the situations when they use MMS; for which respondentsindicated that the most frequent situation was "Special or funny moments" (37%).

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Graph 3.15

MMS usage situationsSample: MMS Smartphone users -

301 cases - Multiple choice

Graph 3.16

MMS use barriersSample: MMS Smartphone users -

Multiple choice

3.2.1. Barriers and motivations for MMS use

The main barrier for MMS use is that the service is expensive (51%). The same barrier

was identified in previous MAVAM editions. And the second one is the lack of certaintywhether everybody may receive the message (48%).

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MAVAM | 3. Messaging services (Special topic)

In concordance with the option mostly mentioned in the use barriers is the fact that50% considered that a price reduction could motivate a higher use of MMS. Thepositive impact on the demand of a price reduction would not only imply a challengeto find the reduction value to attract the highest number of customers, but also it willrelate to its relative value concerning other communication services. Additionally, asSmartphones expand, MMS may be substituted by the delivery of images through IM platforms.

In second place (30%) is the motivation that the service will be part of the hired package.

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Graph 3.17

Motivation to increaseMMS use

MMS Smartphone users - Multiple choice

3.3. Instant Messaging (IM)

In this MAVAM edition, we asked about the use of instant messaging only among thosewho have a Smartphone, which, in the case of MAVAM's sample, represent 83% of therespondents. This percentage is higher than the one estimated for Mexico, whereapproximately 20% of mobile lines correspond to Smartphones. Therefore, Smartphoneusers' behavior represents those have a Smartphone but it may not be extrapolated toMexico's total users.

WhatsApp is the most frequently used application (84%), followed by FacebookMessenger (70%) and Twitter (43%). These three messaging applications differ from

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MAVAM | 3. Messaging services (Special topic)

one another: Facebook Messenger is a function within a social network, WhatsApp is aninstant messaging application by definition and Twitter is a microblogging platform.This could indicate that chat applications respond to different communication needs orinteraction preferences.

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The use of instant messaging decreases as users are of an older age, except for BBM users.

Drops are bigger in the case of Facebook Messenger, where it has an 80% penetrationamong respondents under 24 years of age; while people over 45 only use it in a 48% of the

Graph 3.18

Instant Messaging (IM) useSample: Smartphone users -

684 cases - Multiple choice

Graph 3.19

Use of InstantMessaging (IM)by age group

Sample: Smartphone users -

684 cases - Multiple choice

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MAVAM | 3. Messaging services (Special topic)

cases. In Twitter's case, the percentages are 52% and 27% per age group, respectively. Theuse of Blackberry Messenger (BBM) application is interesting, as penetration per age grouphas an inverse behavior, that it, it increases with age.

3.3.1 Behavior and Attitude

The 98% of those who own a Smartphone use more than one application at the same timeand for 84% of them, this simultaneous use is common. These values could be reassertingthe idea that instant messaging platforms coexist.

A 53% uses up to three messaging applications at the same time.

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Graph 3.20

Simultaneous use ofSmartphone messageapplicationsSample: Users of multiple Smartphone

IM applications - 680 cases

Graph 3.21

Attitude towards simultaneous use of Smartphone message applicationsSample: Users of multiple Smartphone IM applications - 667 cases

3.3.2. Frequency of use

Respondents were asked about the number of messages they send on average per day usingthe applications installed in their phones. We have observed that those who use WhatsAppsend 42 messages a day on average while Facebook Messenger users said they send around29 messages a day via this platform. Based on this information, we concluded thatWhatsApp is the most frequently used application as well as the one more extensively used.

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MAVAM | 3. Messaging services (Special topic)

Respondents were asked to indicate how many contacts they communicated with viaevery application and we could observe that Facebook and WhatsApp are the mostfrequently used options to communicate with more contacts, with averages of almost15 and 14 contacts respectively.

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Graph 3.22

Average of messages sentper day via the three main IM

applications in MexicoSample: Users of multiple Smartphone

IM applications - 667 cases

Graph 3.23

Average of contacts by IMapplication in Mexico Sample: Users of multiple

Smartphone IM applications -937 cases

3.3.3. Contacts

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MAVAM | 3. Messaging services (Special topic)

3.3.4. Difficulties in IM use

Respondents were asked about which had been the situations that stopped them fromusing instant messaging applications. The option most frequently mentioned was"Because I don't have WiFi access" (51%), which indicates that there are Smartphoneusers who try to leave the mobile network as much as possible or who do not use themobile network for data service. The second option was "Speed: Sometimes a messagetakes too long to arrive" (31%).

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Reason %Because I don't have WiFi access 51%Speed: Sometimes a message takes too long to arrive 31%Range: I can't get through to all the people via this service 31%Because of the uncertainty that I will get an immediate answer 29%Because of the uncertainty that the person will read the message immediately 23%

Cost: The instant messaging application consumes much internet time in my mobile phone 22%

None of these reasons stops me from using instant messaging applications 20%

I don't like to use instant messages to deal with work or study matters 19%

Reliability: The service is not available sometimes or the message is not delivered. 17%

I don't rely on instant messaging services to send important messages. 16%

Because of the impossibility to send the same message to more than one person. 12%

Graph 3.24

Reasons that hinder IM useSample: Users of multiple Smartphone

IM applications - 937 cases

3.3.5. IM Relevance

Respondents were asked how they wouldfeel in front of an eventual elimination ofthe IM service: 76% considered that thelack of the service would be a nuisance;50% considered that even with SMS, theywould need the messaging service; and26%, that they would feel at a lost.

Graph 3.25

(Declared) Reaction in front ofan eventual IM elimination

Sample: Users of multiple Smartphone

IM applications - 646 cases

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MAVAM | 3. Messaging services (Special topic)

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3.4. SMS vs. Instant Messaging (IM)

To understand the SMS and instant messaging services coexistence, the preferences of oneover the other under different circumstances were analyzed.

3.4.1. Superiority

Respondents were asked if any of the two services was superior to the other one in relationto reliability, delivery speed, cost/price and quality.

Instant messaging is perceived as superior for all valued attributes.

Graph 3.26

SMS and IM serviceassessment

Sample: IM and SMS Smartphone

users - 680 cases

3.4.2. Service preference according to addressee

To know how SMS and IM applications coexist, respondents were asked which servicethey would choose upon different situations. From the data presented in graph 3.27, weconclude that IM use is perceived as more appropriate to communicate in most cases. Forwork communications (37%) and communications between members of a couple (41%),both services are identical.

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MAVAM | 3. Messaging services (Special topic)

3.4.3. Reasons

Smartphone users were asked what the reasons were for which they would rather use IMinstead of SMS. The two reasons most frequently mentioned were the cost (67%) and thepossibility of sending files and images (52%).

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Graph 3.27

Selecting the mostappropriate service for each

occasionSample: IM and SMS

Smartphone users - 680 cases

Graph 3.28

Reasons for using IMinstead of SMSSample: IM and SMS Smartphone users -

646 cases

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MAVAM | 3. Messaging services (Special topic)

Also, the opposite question was made to be able to know when they preferred to useSMS instead of IM. What stood out in relation with this question was that SMS aremore frequently used to communicate more important messages (36%) and, in secondplace, for work messages (34%). This could indicate a preference for SMS regardingformal communications

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Graph 3.29 Reasons for using SMS instead of IMSample: IM and SMS Smartphone users - 614 cases

3.4.4. IM and SMS combinations

Given that instant messaging and SMS coexist as communication options, it is interesting to ask about the SMS frequency of use against the highest penetration chat platforms(Facebook and WhatsApp).

3.4.4.1. Facebook + SMSFacebook Messenger has a more intense use than SMS. The average number of messagessent by this sample trough Facebook Messenger is 26 per day, while the average for SMSis 9 per day.

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MAVAM | 3. Messaging services (Special topic)

3.4.4.2. WhatsApp + SMS75% of the interviewed answered that they use WhatsApp simultaneously with SMS.

Comparing the quantity of messages sent through WhatsApp and SMS, the messagingapplication is more intensely used. The average number of messages sent on a daily basis bythis sample through WhattsApp is 38 per day, while for SMS is 8 per day.

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Graph 3.30

Average messagessent per day

Facebook Messenger vs. SMSSample: Smartphones using Facebook

Messenger and SMS - 440 cases

Graph 3.31

Average messages sent perday WhatsApp vs. SMS

Sample: Smartphones using Facebook

Messenger and SMS - 512 cases

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MAVAM | 3. Messaging services (Special topic)

3.5. Joyn

Joyn is an application driven by the GSM Association (GSMA), which combines voicecommunication, chat with one or multiple persons at the same time and also allows sharingvideos, photos and files. This application enables contacting users who do not have the SMSor mail application.

In general, it is a free-of-charge application with flat rate or prepaid plans within theterritory of a certain country.

World operators are cooperating in the initiative for the platform to have interoperability,that is, for it to "simply be on the phone and work". Movistar, Orange and Vodafone havealready launched this service in some countries.

Handset manufacturers7 are driving this platform and, in some models, it is alreadypreloaded. It may also be downloaded for iPhone and Android platforms.

3.5.1. Awareness

The 3% of the respondents stated having heard about Joyn. This figure seems to be a bit

high as the service has not been launched in any country of the region yet.

3.5.2. Willingness

All users were explained what Joyn consists in and then they were asked if they would use itor not. The willingness showed was of an intermediate level: 13% would use it, 11% woulduse it if it were included in the package and 20% would use it if it were free of charge. But12% would not use it and 44% does not know what to answer.

From these responses, it can be deduced that in order for users to adopt Joyn, it will beimportant to work on the attributes and differentials to convince the undecided and, amongthese, it is clear that the service should be free of charge or perceived as such.

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Gráfico 3.33

Joyn awarenessSample: Total 825 cases

Graph 3.32

Joyn awarenessSample: Total 825 cases

7 Some Smartphone models by Huawei,

HTC, LG Electronics, Motorola Mobility,

Nokia, RIM, Samsung, Sony, and ZTE.

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MAVAM | 4. Mobile Internet

It is estimated that in the second quarter of 2013 there were some 15 million MobileInternet users in Mexico.

In the sample selected for MAVAM, survey made to Internet users, the ratio ofSmartphones climbs to 83%. As explained in previous editions, in general, the profile ofthe respondent surveyed through Internet is more familiar with technology and hasusually either more intensive uses of the services or more innovative devices.

Given these characteristics, usage patterns are representative of Smartphone users andshould not be construed as being extrapolated to the entire population of Mexico.

4.1 Use of the Internet through Smartphones

The 95% of those who have a Smartphone accessed the Internet over the last three months.The 91% of those who have a Smartphone access the Internet daily. The highest frequencyof use is several times a day (71%).

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Mobile Internet4

Graph 4.1

Internet users throughSmartphonesSample: Smartphones - 684 cases

Graph 4.2

Internet access frequencythrough Smartphones Sample: Smartphones that used the Internet over the last 3 months - 651 cases

Between 2% that despite having a smartphone does not use Internet the main reason (14%)is that they do not find the need. Secondly, (14%) there is the fact that it would greatlyincrease their account amount.

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MAVAM | 4. Mobile Internet

4.2. Plan Type

The 53% of those having a Smartphone, hire a postpaid subscription plan and in mostcases, they hire a 300-500 Mb plan. Then, there are those who acquire the unlimited dataplan option (20%). An 18% do not know how many megabytes they hire, and 12% knowthat data is included in their plans but they do not know how many megabytes there are.In the 53% of cases, the limit of megabytes hired is not exceeded.

4.3. Internet uses on the Smartphone

The three most frequently mentioned activities when using the Internet on the Smartphoneare instant messaging (77%), access to social networks (76%) and e-mails consultation (73%).

A second group includes maps consultation (69%), videos (65%) and news reading (52%).

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Graph 4.3

Reasons not to access the Internet on the SmartphoneSample: Total 33 cases – Multiple choice

Graph 4.4

Amount of megabytes hiredSample: 432 cases

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MAVAM | 4. Mobile Internet

4.4. Social Networks

Among those users having a Smartphone and having accessed social networks over the mobilephone (77%), 98% has an active profile in Facebook; 66%, in Twitter; and 43%, in Google +.

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Graph 4.5

Activities performed whenusing the Internet on the

SmartphoneSample: 651 cases

Graph 4.6

Active profilesin social networks

Sample: Smartphones with access

to social networks - 499 cases

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MAVAM | 4. Mobile Internet

Facebook (79%) and Twitter (54%) have the highest ratio of daily usage frequency,although the latter has a much smaller sample of customers (66% have an active profile onTwitter vs. 98% on Facebook).

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Graph 4.7

Access frequencyto social networks

Sample: It varies depending on

the social network

Facebook main activities are the relationship with friends through messaging (88%), photosand moments (86%), searching for people and relatives (68%), knowing people’s profile(60%), and scheduling meetings and parties (57%).

Graph 4.8

Uses of FacebookSample: 490 cases

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MAVAM | 4. Mobile Internet

4.5. Mobile Banking

The 29% of Smartphone users make queries or access banking information. The mainactivity is to make balance queries, which generates an average of 8 visits per month.The second activity is to make credit card balance queries, with an average of 6 visitsper month.

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Graph 4.9

Frequency of use ofmobile banking services

Sample: 188

4.6. Mobile Commerce

The 44% of the people having Smartphones searched for products and services over thelast three months, and 56% made a purchase.

The main reasons cited for not making a purchase using the Smartphone was thepreference to buy through the computer (81%) and secondly, that they preferred doingshopping at a store (34%).

The top-five categories of products and services mentioned at the time of making searchesto purchase are: cinema and shows tickets (44%), computers (34%), books (34%), games(33%), and clothing (30%).

The main methods of payment mentioned when making the purchases through theSmartphone are credit card (58%) and PayPal (50%).

Graph 4.10

Products search and shoppingthrough the SmartphoneSample: 141 cases

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MAVAM | 4. Mobile Internet

4.7. Maps and location

The 69% of those having a Smartphone use the map services. The 70% consult the mapfor getting directions, and 31% mentioned that after consulting the map, they generallyvisit the site or store consulted and use the services offered by the site consulted.

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4.8. Marketing and Mobile Advertising

Respondents were asked how much they agreed with receiving relevant messages fromoperators and other mobile companies. In the case of Smarthpone users, there is certainagreement on receiving messages, while for Feature Phone users it is irrelevant.

Regardless of the level of agreement to receive messages from operators and companies onthe mobile phones, when asked about the preferred means of communication to receivemessages on the mobile phone, 41% chose the SMS. In second place are those who choseinstant messaging (23%).

Graph 4.11

Activity performed afterconsulting maps

Sample: 116 cases - Multiple Choice

Graph 4.12

Prefered means to receiveadvertisements

Sample: Total 825 cases

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MAVAM | 4. Mobile Internet

SMS was the preferred means for Feature Phone users as well as for Smartphone users.

Note: On average, 44% pays some kind of attention to advertising messages. 7% alwayspays attention to them, and 14% answered that they do so most of the times.

Search sites (78%) and video sites (55%) are the places mostly mentioned regardingadvertising messages display.

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Graph 4.13

Places mentioned whererespondents say having seen

an advertising message

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MAVAM | 5. Conclusions

Currently, Value Added Services in Mexico represent 33% of mobile operators’ revenue. Inthe second quarter of the year, sales amounted to MEX$15.09 billion (USD 1.21 billion)and grew 13% in Mexican pesos (22% in USD) over the same period of 2012.

SMS and MMS services were affected by the drop in interconnection rates and pricereductions resulting from packaged products and pricing models with a large number ofSMSs included as part of the bundle. Due to these changes, revenue remains flat atMEX$7.77 billion (USD 0.62 billion) in the second three months of 2013.

Mobile Internet driven by the scope reached by Smartphones recorded sales amounting toMEX$4.80 billion (USD 0.38 billion) in the second quarter of 2013, and it nowrepresents 32% of VAS revenue.

Text messaging is used both by those who own feature phones and Smartphones, whileamong the latter, OTT chat services and Instant Messaging applications gain ground butSMS remains necessary to communicate with the 80-85% of people who do not havesmart devices. Among those having feature phones, SMS continues being an indispensablecommunication option.

Coexistence of services. The existence of OTT chatservices and Instant Messaging platforms, althoughincreasing the messaging traffic significantly,does not disqualify the use of SMS. Mobileusers are leveraging both types of services toconnect and communicate, with 98% of thosehaving a Smartphone using more than oneinstant messaging application and consider thisas normal (84%).

This indicates that while chat applications arepopular and usage is on the increase, they do not

provide the full functionality needed to enableinteroperability across all messaging services, as they as usedin islands and communities, and users still have to full backto SMS. Today there is no single application, that meets allconsumers messaging requirements across cost, rich featuresand service quality which works across any platform, anydevice at any time.

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Conclusions5

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MAVAM | 5. Conclusions

WhatsApp (84%) is the Instant Messaging application most widely used and the one withthe highest number of messages sent on average (42 messages per day), as well as theservice users use to communicate to the highest number of contacts through (15 contacts).

Facebook Messenger is the second most used application (70%) with a preference amongyounger people. The use increases to 80% among those under 24 years.

Relevance: For 53% of SMS users (all devices), not having the service would be a problem.16% would feel lost and 36% believe that even having other alternatives available, but theystill need SMS.

In the case of Smartphone users, dependence on chat platforms is high.76% said that a possible lack of the service would be a problem. 50%even stated, that while they still have SMS they would still wantaccess to chat and instant messaging platforms, with 26% sayingthey would feel lost without them.

Guarantee: Although in different proportions,Smartphone (48%) and feature phone users (29%)agree that one of the main difficulties found inSMS is not knowing whether the message wasdelivered. This represents an opportunity to thinkof new applications or services related tomessaging. Delivery guarantee is an issue highlyvalued by the user.

In the same way, from a list of 10 applications, theone most valued by users was a service whichenabled notification of delivery receipt and SMSreading, when an SMS is sent.

Opportunity: Among Smartphone users, there was ahigh interest for a unified service which would allowsending and receiving of messages no matter whatdevice is being used, who the sender is, to ensureimmediate delivery of messages regardless of theplatform or device the recipient is using (multi-platform) and automatically identify how to getservice received depending on the platform.

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MAVAM | 5. Conclusions

Enabled: Additional features users would value as complementary to SMS are black lists toblock unwanted messages from particular contacts, and white lists to enable them.

Joyn. In view of the possible launch of a service like Joyn (the GSMA’s RCS initiative) inMexico, respondents showed a hypothetical acceptance of such a service, with 13% statingthey would use it, 11% saying they would use it if it were included in their package, and20% would only use it if it were free. Only 12% said would not use it and 44% said theydid not know.

From these responses, we concluded that in order for users to adopt Joyn, it will beimportant to work on attributes that would differentiate the service to convince theundecided, and for the service to be free or perceived as such.

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MAVAM | 6. Glossary

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The description of the services presented in this report is presented in the following sections.

Messages The services in this category can be defined as:

SMS (Short Message Services): sends short text messages.

MMS (Multimedia Message Service): sends short text messages with image, photo,or video.

E-mail: receives or sends emails via cell phone. Receiving or sending can be donemanually, in other words by user’s initiative, or can be activated through the pushmechanism, which periodically and automatically receives and sends mail.

Instant Messages: service which permits access to instant messaging systems like MSNor Yahoo.

Answering Machine or Voice Messaging: gives access to the automatic messagesrecording service offered by the carrier, in case of receiving calls that can’t be answered.

Entertainment The services in this category can be defined as:

Music: service which provides the download of songs to be played in the cell phone. Thehandset must be able to play several music formats such as MP3, AAC, MP4, WAV,among others.

Ringtone: service which provides the download of ringtones to be used in the handset.The cell phone must be able to play multiple formats of ringtones, such as MIDI, AAC,MP3, MP4, WAV, among others.

Images: service which provides the download of images and photos to be displayed onthe cell phone. The handset must be able to display several formats of pictures and imagessuch as JPEG, GIF, among others.

Games: service which provides the download of games to be played on the cell phone,individually, or through internet or Bluetooth connections, in groups. The cell phone must

Glossary6

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MAVAM | 6. Glossary

| 51 |

be able to run the games available in the device and also the downloadedones, and additionally provide Bluetooth or data connectivity forinternet access (eg.: EDGE, EVDO, or 3G).

Video: service which provides the download of videos or videostreaming to be played on cell phone. The handset must be able to playdownloaded videos or received video streaming. The cell phone must beable to play videos in 3GP, MP4, WMV, AVI, among others.

Open TV: This feature is present in some cell phones and permitsuser to watch free TV programs with the handset acting as an analogue or digital TVreceptor and capturing contents through the same signals (frequencies) received bytraditional TV’s at home.

Internet and Location The services in this category can be defined as:

Internet Access: service which provides broadband access to the Internet via cell phoneor modem. In both cases users must have a data plan contract with the mobile operator.

This service has the following characteristics:

Cell phone: the internet access from cell phone can be done in the following ways: 1. Using a browser to access the same websites accessed by fixed internet through acomputer. Examples of browsers: the ones offered by the cell phone or smartphone(Internet Explorer Mobile, for Windows Mobile), or alternative browsers such as Skyfireor Opera. 2. Accessing the WAP websites inside the Carrier network through WAP browser. 3. Through specific programs installed in the handset (Widget, Web-App) provided bycompanies like Yahoo Mobile.

Modem: devices which can be connected to desktop computers or notebooks. ProvidesInternet broadband connection using a computer browser (Internet Explorer, Firefox,and others).

Social Networks: service which includes all the necessary elements to provide access tosocial networks such as Orkut, Twitter, Facebook, and others. This access can be done

N

SO

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MAVAM | 6. Glossary

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through browser and internet access, both present on cell phones, or through a specificapplication provided by mobile operators or other companies.

Payments and Banking: usually offered by banks or other credit institutions, whichallows the access to users accounts in these institutions. These services can range fromsimple balance consults to the payment of bills or conclusion of investment transactions.

Location Based Services: service which provides users’ geographic location. Theseservices have the following characteristics:

Location: can be provided as the following: 1. Through a process of triangulation using information from cell sites and applicationsystems provided by the operator for this purpose; 2. Through the GPS installed in the cell phone.

Offered Services: 1. Location: service usually offered by the mobile operator which allows informing thegeographic location of a particular subscriber. Eg.: service hired by parents to monitortheir children’s habits, or with the purpose of promoting safety. 2. Maps: service offered by other companies providing maps on cell phones, usually to locateaddresses, and also permits to locate users in the map if their handsets have a built-in GPS. 3. Contextual Filter: permits the mobile operator, or other service providers, to offeraddresses or other types of promotions at stores, restaurants, movies, among others, basedon the instant location of users.

Mobile MarketingThe services in this category can be defined as:

Mobile Marketing: these services are implemented by mobile operators, to advertise theoperator itself or other companies for the subscriber base. Usually these ads are sent viaSMS. The advertisements can also be sent directly by competitor carriers or othercompanies, again using SMS messages.

Mobile Advertising: similar to Mobile Marketing, Mobile Advertising is also anadvertising service implemented by mobile operators or other companies. If the subscribersagree to receive it they can participate of promotions such as free minutes, free SMSpackages, and others, as a reward for receiving advertisements.

N

SO

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MAVAM | 7. Technical File

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Scope Mobile phone users

Technique CAWI (Computer-Assisted Web Interviewing)Method 12/15-minute surveySample 825 casesMarket MexicoSurvey date June 1-10 2013

Sex Sample

Male 440 53%Female 385 47%

Age Sample

18-24 years old 81 10%25-34 years old 246 30%35-44 years old 342 41%45 or more 156 19%

Location Sample

DF 468 57%Center 116 14%North 98 12%Bajío/West-Center 60 7%Southeast 50 6%Norwest/Pacific 33 4%

SEL Sample

AB 303 37%C+ 263 32%C 168 20%C- / DE 91 11%

Operator Sample

Telcel 527 64%Movistar 191 23%Iusacell 69 8%Unefon 28 3%Nextel 9 1%Otra 1 0%

Plan Types Sample

Prepaid (Rechargeable card) 461 56%Pospaid (Monthly billed - without limit of use) 226 27%Pospaid + control 138 17%(A monthly bill, with limit of use.Once limit is reached, I can make a recharge and continue using it)

Technical File7

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MAVAM | 8. Team

| 54 |

Team8

Fatima Raimondi | President, Acision Latin America

Silviane Rodrigues | Market Development Director, Acision Latin America

Mariana Rodríguez Zani | Director

Emilia Gibellini | Analyst

Nadia Arno | Analyst

Román Mergá | Analyst

Leonardo Nocera, Bernabé Diaz | Design

Humberto Perissé | Director

Izildinha Neumann | Commercial

Javier Carreto Mares | Owner

Mario Juvera | Associate

Yazmín Vera | Account Director

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