What Customers Want from Wi-Fi (Brazil)
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1 What Customers Want from Wi-Fi (Brazil) Insights from Cisco IBSG Customer Research Cisco Internet Business Solutions Group August 2012 Internet Business Solutions Group 1
2 Contents Executive Summary Research Background and Objectives Use of Mobile Devices Location Selection Network Choice: Wi-Fi or Mobile? The New Mobile Innovative Business Models Conclusions and Implications Internet Business Solutions Group 2
3 1 Executive Summary Internet Business Solutions Group 3
4 Background Wi-Fi represents a significant new opportunity for mobile and broadband service providers in Brazil However, there is very little market insight into customers perceptions and needs related to Wi-Fi Cisco IBSG undertook primary research to understand key customer needs, behaviors, and perspectives Online survey of 650 customers age 18 and older Representative of Brazilian broadband customer population Study was fielded in May 2012 Study was replicated in Canada, United Kingdom, Mexico, and the United States Internet Business Solutions Group 4
5 Key Research Insights: Wi-Fi Is an Attractive Alternative for Mobility Has Greatest Value When Integrated with Cellular Its all about home: Home is #1 place where mobile devices are connected to the Internet, and this trend is growing The device world is Wi-Fi: Most devices are Wi-Fi enabled; Wi-Fi is preferred way to connect to the Internet, even for smartphones People prefer Wi-Fi to mobile: Customers see the benefits of Wi-Fi vs. mobile Ubiquity: Customers want Wi-Fi everywhere indoors and outdoors A seamless experience: Customers want seamless hand-off and integration between mobile and Wi-Fi New ways to make money: Users would like new Wi-Fi services that enhance the retail experience and provide roaming and secure access to remote content Wi-Fi can fight churn: Offering free Wi-Fi may help retain existing broadband customers and attract new ones from competitors New business models: Customers are open to accepting advertising and personalized marketing messages in order to have free Wi-Fi Wi-Fi + mobile = new mobile : Customers are interested in a combined Wi-Fimobile offering that provides pervasive, cost-effective, seamless mobility Internet Business Solutions Group 5
6 2 Research Objectives and Demographics Internet Business Solutions Group 6
7 Wi-Fi Represents Significant Opportunity for Brazilian Operators Brazil Wi-Fi Market Is Underserved, Little Understood Brazil has only 0.5% of the world s 777,000 hotspots* Global Wi-Fi trends imply significant opportunity for Brazilian operators: Wi-Fi is a viable complement to mobile: coverage, user experience, quality, price Mobile operators are looking to Wi-Fi as an offload strategy for congested networks Mobile operators are trying to understand new business models around Wi-Fi Almost no understanding of Brazilian customers perceptions of Wi-Fi Cisco IBSG research primary customer research for insight into: Customer behavior Current and future use Customer needs and level of interest Requirements for Brazilian service providers to achieve success Source: *JiWire, June 2012; Cisco IBSG, 2012 Internet Business Solutions Group 7
8 Research Objectives Determine how and where mobile users access mobile and Wi-Fi networks Understand future growth of Wi-Fi-enabled devices Understand what drives mobile users choice of mobile vs. Wi-Fi network Determine the stickiness of Wi-Fi in relation to mobility and broadband services Test and evaluate new and innovative business models that leverage Wi-Fi Internet Business Solutions Group 8
9 Research Addressed Key Technologies, Customer Characteristics, and Attitudes Use of Access Technologies DSL Wi-Fi at Home Mobile Data Wi-Fi at Work High-Speed Cable Public Hotspots Fiber Key Areas Analyzed Demographics Devices used (frequency and duration) Primary locations (frequency and duration) Network preferences Attitudes toward innovative business models Attitudes toward service providers 0% 20% 40% 60% Base: 650 Brazilian broadband consumers Internet Business Solutions Group 9
10 Survey Represents Brazilian Home Broadband Population 55 Million People (29% of Households) Have Home Broadband Access Age Education Area Where You Live 40% 35% Graduate Degree Urban 30% 25% Bachelors Degree Suburban 20% Unfinished Some College 15% 10% High School Semi-rural 5% 0% Some High School 0% 10% 20% 30% 40% Rural 0% 10% 20% 30% 40% 50% 60% 70% This segment of the Brazilian population is on average younger, better educated, and somewhat more urban than the total population Base: 650 Brazilian broadband consumers Internet Business Solutions Group 10
11 Income and Employment: Home Broadband Population 25% Income 60% Employment 20% 15% 10% 5% 50% 40% 30% 20% 10% 0% < > 140 R$000 per year 0% This segment of the Brazilian population has higher income and better employment situation than average Brazilian Base: 650 Brazilian broadband consumers Internet Business Solutions Group 11
12 3 Use of Mobile Devices Internet Business Solutions Group 12
13 Brazilians Love Their Mobile Devices High Penetration of Laptops and Smartphones; Explosive Growth of Tablets Devices Owned by Consumers Laptop Smartphone Mobile Gaming Device Tablet Mobile Media Player e-reader 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% On average, Brazilian broadband consumers own more mobile devices than their counterparts in more developed countries: Mexico: 2.85 devices Brazil: 2.74 devices United Kingdom: 2.62 devices United States: 2.59 devices Canada: 2.43 devices Current situation 1 year from now Base: 650 Brazilian broadband consumers Internet Business Solutions Group 13
14 Wi-Fi Is Primary Access Technology for These Mobile Devices Only Smartphones Use Cellular Technology More than Wi-Fi Network Connectivity of Owned Devices Laptop Smartphone Mobile Gaming Device Tablet Don't Know / None Wi-Fi Mobile / Cellular Mobile Media Player e-reader 0% 20% 40% 60% 80% 100% Base: 650 Brazilian broadband consumers Internet Business Solutions Group 14
15 Consumers Use Mobile Devices More than an Hour per Day Connected About Half the Time; Laptops Are Predominant Device Daily Use, by Device Average Hours per Day Connection Time, by Device Average Hours per Day Basic Mobile Phone Smartphone Mobile Gaming Device Tablet Mobile Media Player e-reader Laptop Smartphone Mobile Gaming Device Tablet Mobile Media Player e-reader Laptop Users of That Device Full Population Users of That Device Full Population Base: 650 Brazilian broadband consumers Internet Business Solutions Group 15
16 These Devices Are Used Daily for a Wide Variety of Online Activities Daily Use of Mobile Services Voice Calling Sending / Receiving Texting Browsing the Web Visiting Social Networks Using Apps Online Shopping Using Business Apps 0% 20% 40% 60% 80% 100% Continuously Several Times a Day About Once a Day Less Than Once a Day Never Base: 650 Brazilian broadband consumers Internet Business Solutions Group 16
17 Significant Use of Mobile Devices for Streaming and/or Uploading Content Daily Use of Mobile Services Listening to Streamed Audio / Music Watching Streamed Recorded Video Watching Streamed Live Video Playing Online Games Uploading Photos / Videos 0% 20% 40% 60% 80% 100% Continuously Several Times a Day About Once a Day Less Than Once a Day Never Base: 650 Brazilian broadband consumers Internet Business Solutions Group 17
18 Music/Audio Is Most Frequently Accessed Type of Stored Content Daily Use of Mobile Services Listening to Recorded Audio / Music Using Productivity Tools Watching Device Recorded Video Playing Device Stored Games Reading ebooks 0% 20% 40% 60% 80% 100% Continuously Several Times a Day About Once a Day Less Than Once a Day Never Base: 650 Brazilian broadband consumers Internet Business Solutions Group 18
19 Both Online and Stored Music/Audio Are Accessed More than Games or Videos 70% Daily Use of Mobile Services 60% 50% 40% 30% 20% 10% 00% Playing Online Games Playing Device Stored Games Watching Streamed Live Video Watching Streamed Recorded Video Watching Device Stored Video Listening to Online Audio / Music Listening to Device Stored Audio / Music Base: 650 Brazilian broadband consumers Internet Business Solutions Group 19
20 4 Location Selection Internet Business Solutions Group 20
21 People Use Mobile Devices Across a Range of Locations During the Day Daily Mobile Use, by Location Your Home Friends' Homes At Work at Normal Location At Work, but at Remote Locations Retail Locations Public Locations Travel Locations On-the-go 0% 20% 40% 60% 80% 100% Use > 30 mins Use Base: 650 Brazilian broadband consumers Internet Business Solutions Group 21
22 Most Connected Use Is at Home, and Home Use Is Growing Average Daily Use, by Location Hours per Typical Day Increase in Use, by Location Your Home No Increase in Mobile Usage Friends' Homes At Work at Normal Location At Work, but at Remote Locations Retail Locations Public Locations Travel Locations On-the-go Full Population Use that Location Your Home Friends' Homes At Work at Normal Location At Work, but at Remote Locations Retail Locations Public Locations Travel Locations On-the-go 0% 10% 20% 30% 40% 50% 60% 70% Base: Brazilian broadband consumers Internet Business Solutions Group 22
23 Mobile Media Players and Phones Have Highest Use On-the-Go Devices Used in the Home Devices Used On-the-Go Laptop Laptop e-reader Mobile Media Player Tablet Mobile Gaming Device Smartphone Basic Mobile Phone 00% 10% 20% 30% 40% 50% 60% 70% 80% 90% e-reader Mobile Media Player Tablet Mobile Gaming Device Smartphone Basic Mobile Phone 00% 10% 20% 30% 40% 50% Users of Device Full Population Users of Device Full Population Base: Brazilian broadband consumers Internet Business Solutions Group 23
24 Phones, Laptops, and Tablets Are Primary Work Devices Devices Used at Normal Work Location Devices Used at Remote Work Location Laptop Laptop e-reader Mobile Media Player Tablet Mobile Gaming Device Smartphone Basic Mobile Phone e-reader Mobile Media Player Tablet Mobile Gaming Device Smartphone Basic Mobile Phone 0% 10% 20% 30% 40% 50% 0% 10% 20% 30% 40% Users of Device Full Population Users of Device Full Population Base: Brazilian broadband consumers Internet Business Solutions Group 24
25 Phones Are Used Most in Retail and Public Locations; Tablets Growing Devices Used at Retail Location Devices Used at Public Location Laptop Laptop e-reader Mobile Media Player Tablet Mobile Gaming Device Smartphone Basic Mobile Phone e-reader Mobile Media Player Tablet Mobile Gaming Device Smartphone Basic Mobile Phone 0% 10% 20% 30% 40% 0% 10% 20% 30% 40% Users of Device Full Population Users of Device Full Population Base: Brazilian broadband consumers Internet Business Solutions Group 25
26 Home Is Place of Highest Use for Multi-Function Devices Smartphone Is Most Used Device Outside of Home 90% 80% 70% 60% 50% 40% 30% 20% 10% Usage of Multi-Function Devices by Location 00% Home On the Go Normal Work Remote Work Retail Public Smartphone Tablet Laptop Base: Users of the device Internet Business Solutions Group 26
27 5 Network Choice: Wi-Fi vs. Mobile Internet Business Solutions Group 27
28 Most Mobile Users Employ Some Wi-Fi, Including 80% of Smartphone Owners 45% Current Distribution of Network Connectivity Time Percentage of Device Users 40% 35% 30% 25% 20% 15% 10% 05% 00% 100% Mobile 75% Mobile / 25% WiFi 50% Mobile / 50% WiFi 25% Mobile / 75% WiFi 100% WiFi Don't Know or N/A Smartphone Mobile Gaming Tablet Laptop Base: Users of the device Internet Business Solutions Group 28
29 Even Smartphone Users Prefer Connecting Devices via Wi-Fi Preferred Network Access, by Device Percentage of Device Users Smartphone Mobile Gaming Device Tablet Mobile Media Player e-reader Laptop 0% 10% 20% 30% 40% 50% 60% 70% 80% No Preference Wi-Fi Mobile/Cellular Base: Users of the device Internet Business Solutions Group 29
30 Wi-Fi Is the Preferred Means of Mobile Network Access Across All Attributes Preferred Network Access, by Attribute Attribute Mobile / Cellular Wi-Fi No Difference Sample Size* Lower cost 27% 61% 12% 575 Speed of network 16% 71% 13% 577 Best reliability 30% 53% 17% 573 Best performance for my applications 22% 61% 17% 572 Best coverage 41% 46% 12% 583 Most secure 31% 50% 19% 563 Easier to use 29% 53% 18% 589 * Don t know responses removed from sample. Base: Brazilian broadband consumers Internet Business Solutions Group 30
31 Users Like Wi-Fi s Speed and Security, but Face Several Challenges Most Important Wi-Fi Features * Challenges of Wi-Fi Networks * Speed of Network Finding Access Points High Level of Security Speed of Network Network Coverage Low Cost to Use Automated Login Unlimited Data Usage Simple Manual Login National and International Roaming Active Choice to Select Network Access to Unique Content 0% 20% 40% 60% 80% Network Coverage Level of Security Quality of the Network Difficult Login Procedure None of the above 0% 10% 20% 30% 40% 50% * Other excluded; N=629 * Other excluded; N=648 Base: Brazilian broadband consumers Internet Business Solutions Group 31
32 Seamless Handoff and Integration of Mobile and Wi-Fi Are Very Important 50% Importance of Seamless Wi-Fi-to- Wi-Fi Handoff Importance of Seamless Mobile-to- Wi-Fi Handoff 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% Not at All Important Slightly important Moderately Important Very Important Extremely Important 0% Not at All Important Slightly important Moderately Important Very Important Extremely Important Base: Brazilian broadband consumers Internet Business Solutions Group 32
33 6 The New Mobile Internet Business Solutions Group 33
34 Mobile Users Access Wi-Fi from a Variety of Public Locations They Use Different Kinds of Public Hotspots with Similar Frequency 70% 60% 50% 40% 30% 20% 10% 0% Use of Public Hotspots, by Location Other Public Outdoors Public Venues Coffee Shops / Restaurants Retail Locations Travel Locations Do not Use Less Than 1 per Week At Least 1 per Week Hotels Frequency of use is a function of availability of hotspots, not necessarily an indicator of user preference Likewise, use in travel locations and hotels, which is relatively low, depends on frequency of traveling A higher percentage of broadband consumers has used public hotspots in Brazil than in more developed countries: Mexico: 88% Brazil: 72% United States: 58% Canada: 56% United Kingdom: 51% Base: 650 Brazilian broadband consumers Internet Business Solutions Group 34
35 Most Users Do Not Access Free Wi-Fi as Part of Mobile or Broadband Service More than 40% Don t Have It, and About 30% Don t Know Inclusion of Free Public Wi-Fi in Home Broadband Inclusion of Free Public Wi-Fi in Mobile Subscription 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Yes No Don't Know Yes No Don't Know N=650 N=630 customers with mobile voice or data plan Base: Brazilian broadband consumers Internet Business Solutions Group 35
36 Mobile Customers Are More Aware that Free Wi-Fi Is Not Included in Plan Inclusion of Free Public Wi-Fi in Mobile Subscription, by Provider Percentage of Mobile Customers Distribution of Respondents, by Mobile Provider Oi TIM Oi 25% Vivo 28% Claro TIM 28% Claro 19% Vivo 0% 10% 20% 30% 40% 50% 60% Don't Know No Yes Note: Claro does not currently offer Wi-Fi access to public hotspots, while TIM, Oi, and Vivo do. N=599 Base: Brazilian broadband consumers Internet Business Solutions Group 36
37 Broadband Customers Are Less Clear About Inclusion of Free Wi-Fi in Plan Inclusion of Free Public Wi-Fi in Home Broadband, by Provider Percentage of Fixed Broadband Customers Distribution of Respondents, by Broadband Provider NET Oi Vivo GVT Other NET 27% Other 13% Oi 26% GVT 14% Vivo 20% 0% 10% 20% 30% 40% 50% Don't Know No Yes Note: GVT does not currently offer Wi-Fi access to public hotspots, while NET, Oi, Vivo, and some small SPs do. N=650 Base: Brazilian broadband consumers Internet Business Solutions Group 37
38 Free Wi-Fi Is a Strong Way To Attract and Retain Customers 50% Importance of Free Wi-Fi in Broadband Provider Choice Likelihood of Changing Provider for Free Public Wi-Fi 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% Extremely Important Very Important Moderately Important Slightly Important Not at All Important 0% Completely Likely Very Likely Moderately Likely Slightly Likely Not at All Likely N=179 users who have free Wi-Fi bundled in subscription N=650 Base: Brazilian broadband consumers Internet Business Solutions Group 38
39 Brazilians Rarely Pay for Public Wi-Fi Access Is Usually Free, or Part of Subscription or Loyalty Plan Free Part of Broadband Subscription Pay-per-Use Part of Mobile Subscription Part of Customer Loyalty Program Wi-Fi Provider or Aggregator Payment for Public Wi-Fi Percentage of Regular Users, All Locations Wi-Fi as part of broadband subscription is somewhat more frequently used in outdoor public spaces (16%) and in travel locations (15%) such as airports Pay-per-use occurs slightly more in hotels (10%) and travel locations (9%) 0% 10% 20% 30% 40% 50% 60% 70% Base: Brazilian broadband consumers Internet Business Solutions Group 39
40 Mobile Users Want Ubiquitous Wi-Fi and Have Creative Ideas for New Locations Desired Wi-Fi Access Locations Number of Respondents (Optional Write-in Question) Everywhere Parks / Squares Streets / Roads Hospitals Restaurants/Bars/Food Courts Busses/Bus Stops & Terminals Shopping Centers Home Schools Beaches Universities Subways Supermarkets Stadiums Remote / Rural Areas Airports Interesting new locations included: Churches Libraries Museums Cinema Banks Respondent quote: In every place it is useful, as sometimes we need to consult a map, get information Base: 312 write-in responses Internet Business Solutions Group 40
41 High Interest in a New Mobile that Combines Different Access Networks 60% 50% 40% 30% 20% 10% 0% Pervasive, Cost-Effective, Seamless, and Unlimited Data Offering Interest in Flat Fee for Bundled Mobile and Wi-Fi Access Very Interested Somewhat Interested Neutral Average response: 4.5 on a scale of 5 Not Very Interested Most Important Attributes Rating Neutral and Above Lowers Overall Cost No Additional Wi-Fi Charges Flexibility of Location Unlimited Data Reliability Improving Performance Seamlessly Transfers Trust/Familiarity With Automated Login Ease of Doing Business None Of the Above Not at All Interested 0% 10% 20% 30% 40% 50% N=650 N=612 Base: Brazilian broadband consumers Internet Business Solutions Group 41
42 7 Innovative Business Models Internet Business Solutions Group 42
43 Five New Wi-Fi Business Model Concepts Tested Concepts with Brazilian Mobile Users Most Important Wi-Fi Network Features Concept 1 Concept 2 Concept 3 Concept 4 Concept 5 Accepting advertising for free Wi-Fi access Accepting personalized marketing for free public Wi-Fi access Secure Wi-Fi access to remotely stored content National/international Wi-Fi roaming Enhanced in-store shopping experience Internet Business Solutions Group 43
44 Concept 1: Accepting Advertising for Free Wi-Fi Access Interest in Accepting Advertising for Free Public Wi-Fi Access 50% Reasons Not Willing To Accept Advertising Ads slow me down 40% 30% 20% 10% 0% Very Willing Somewhat Willing Neutral Average response: 4 on a scale of 5 Not Very Willing Not At All Willing None of the above Inconvenience not worth the money Already have free access to Wi-Fi Concern about sharing personal data Could use mobile data plan instead Willing to pay for no ads 0% 10% 20% 30% 40% N=650 N=86 users who are not at all or not very willing Base: Brazilian broadband consumers Internet Business Solutions Group 44
45 Concept 2: Accepting Personalized Marketing for Free Wi-Fi Access Interest in Accepting Personalized Marketing for Free Public Wi-Fi Access Reasons Not Willing To Accept Personalized Marketing 40% 30% 20% 10% 0% Very Willing Somewhat Willing Average response: 3.8 on a scale of 5 Neutral Not Very Willing Not At All Willing It will drive too much advertising traffic Ads slow me down Concern about security and hacking Do not want retailers to have my personal information Inconvenience not worth the money None of the above Already have free access to Wi-Fi Get targeted advertisements from other sources Do not trust Service Provider to keep my privacy Don't see enough value in targeted offers Willing to pay for no ads Could use my mobile data plan instead 0% 10% 20% 30% 40% N=650 N=97 users who are not at all or not very willing Base: Brazilian broadband consumers Internet Business Solutions Group 45
46 Concept 3: Secure Wi-Fi Access to Remotely Stored Content 50% 40% 30% 20% 10% Interest in Secure Wi-Fi Access to Remote Content Average response: 4.1 on a scale of 5 Lower overall cost Security/privacy of data Most Important Attributes Reliability Unlimited data No additional Wi-Fi Flexibility of device Flexibility of location Greater personal flexibility Trust/familiarity with Automated login 0% Very Interested Somewhat Interested Neutral Not Very Interested Not at All Interested None of the above 0% 10% 20% 30% 40% 50% N=650 N=600 users who responded neutral and above Base: Brazilian broadband consumers Internet Business Solutions Group 46
47 Concept 4: National / International Wi-Fi Roaming Interest in National / International Wi-Fi Roaming Most Important Attributes 60% 50% 40% 30% 20% Average response: 4.3 on a scale of 5 Lower overall cost Security/privacy of data Unlimited data Flexibility of location Reliability No additional Wi-Fi Flexibility of device Convenience 10% 0% Very Interested Somewhat Interested Neutral Not Very Interested Not at All Interested No roaming charges for Trust/familiarity with Automated login None of the above 0% 10% 20% 30% 40% N=650 N=610 users who responded neutral and above Base: Brazilian broadband consumers Internet Business Solutions Group 47
48 Concept 5: Enhanced In-Store Shopping Experience 50% 40% 30% 20% 10% 0% Interest in Enhanced In-Store Shopping Experience Very Interested Somewhat Interested Neutral Average response: 4.1 on a scale of 5 Not Very Interested Security/privacy of data Free Wi-Fi service supplied by Retailer Reliability No additional Wi-Fi access charges Trust/familiarity with Retailer Efficiency while in the store Unlimited data Enhancing shopping experience Personalized special deals and coupons None of the above Most Important Attributes Not at All Interested 0% 10% 20% 30% 40% N=650 N=602 users who responded neutral and above Base: Brazilian broadband consumers Internet Business Solutions Group 48
49 8 Implications for Service Providers Internet Business Solutions Group 49
50 Implications for Service Providers Target Wi-Fi in the home Create solutions and incentives to encourage users to offload mobile traffic Incorporate Wi-Fi as integral part of the portfolio Use pricing, marketing, and new solutions to create integrated offers Create new Wi-Fi business opportunities for nomadic devices Provide a pervasive Wi-Fi experience Invest in both indoor and outdoor coverage Establish extensive roaming agreement with other Wi-Fi SPs, in country and abroad Explore new ways to make money from Wi-Fi Augment the typical offload business case with new and innovative Wi-Fi services and business models general and personalized advertising, retail application, managed services, wholesale Deliver on new mobile Align network architectures and deploy appropriate technology to deliver a seamless, integrated mobile-wi-fi user experience Internet Business Solutions Group 50
51 For More Information Please contact: Luiz Lima, Director, Internet Business Solutions Group, Brazil Internet Business Solutions Group 51
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