Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results MENA Summit 2013: Enabling innovation, driving profitability Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results 6 November 2013 Karim Yaici and Ronan de Renesse EVENT PARTNERS:
Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results 2 Survey research methodology Internet access: phones filling the fixed broadband gap Phone usage: plenty more than traditional telecoms services Over-the-top players' business models Key take-away points
Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results 3 The Mobile Internet Consumer Survey in MEA 2013 First consumer MEA study to measure: usage of telecoms and media services device ownership (mobiles and tablets) mobile connectivity options purchase and usage of mobile devices and SIMs Survey was conducted during November 2012 January 2013 in association with On Device Research. Coverage:,,, Saudi Arabia, South Africa and the 46 questions 4250 respondents. Countries covered individually in our survey Great Britain France South Africa Germany Saudi Arabia
Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results 4 Survey research methodology Internet access: phones filling the fixed broadband gap Phone usage: plenty more than traditional telecoms services Over-the-top players' business models Key take-away points
GDP per capita (USD thousand) Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results Almost 70% of surveyed mobile Internet users in MENA use smartphones Feature and smartphone ownership and GDP per capita in 2012, by country 40% 20% 0% Saudi Arabia South Africa 70 60 50 40 30 20 10 0 5 Smartphone ownership GDP per capita (2012) Featurephone ownership Figure source: Mobile Internet Survey in the Middle East and Africa 2013: Internet access trends and analysis
Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results 6 Mobile Internet users want faster data speeds Drivers that would encourage mobile Internet users to use the service more, by region Faster speed Higher data caps More relvant apps Cheaper price Public Wi-Fi Suitable tariffs Local content 0% 10% 20% 30% 40% 50% MENA SSA
Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results More than 57% of surveyed mobile Internet users use Wi-Fi regularly Reported frequency of Wi-Fi usage on mobile phones,, Saudi Arabia and Primary reason for using Wi-Fi on mobile phones for regular and occasional users,, Saudi Arabia and Other 13% 7 40% 20% 0% Saudi Arabia Use regularly Use occasionally Phone does not support Wi-Fi Phone supports Wi-Fi, but I do not use it Unsure Faster network speed 33% Other 17% Regular users Faster network speed 44% Save money 39% Save money 54% Occasional users
Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results 8 Survey research methodology Internet access: phones filling the fixed broadband gap Phone usage: plenty more than traditional telecoms services Over-the-top players' business models Key take-away points
Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results Majority of respondents use at least one type of OTT service for social networking, voice calls or messaging Penetration of OTT services on mobile, by type of mobile phone and country 9 90% 70% 50% 40% 30% 20% 10% 0% Saudi Arabia About of respondents aged 18 25 used OTT services; a similar proportion of those in the 26 34 group South Africa % respondents respodents with smartphone % respondents with featurephone
Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results Social networking, email and instant messaging were the most-commonly used OTT services Most frequently used OTT services on mobile, by country 10 Social networking Email Instant and mobile messaging Skype video Saudi Arabia South Africa Skype voice Other Usage of voice and video OTT services over mobile remains low 0% 20% 40%
KSA SA KSA SA Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results Facebook Messenger usage is confined to countries where smartphone penetration is high Facebook Messenger, frequency of use on mobile phones, by country 100.0% 80.0% 60.0% 40.0% 40% 20.0% 20% 0.0% 0% Saudi Arabia South Africa Regular (at least a few times a week) Regular (at least a few times a week) Occasional (twice a month or less) 40% 20% 0% Occasional (twice a month or less) 11 Almost 70% of those who use Facebook Messenger in MENA use it few times a week Regular (at least a few times a week) Occasional (twice a month or less)
KSA KSA SA SA KSA SA KSA SA Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results WhatsApp is more widespread than platform-specific services like BlackBerry Messenger and imessage WhatsApp Messenger, frequency of use on mobile phones, by country 40% 40% 20% 20% 0% 0% BlackBerry Messenger and Apple s imessage, frequency of use on mobile phones, by country 40% 40% 20% 20% 0% 0% 12 Regular Regular (at least (at least a few a few times times a week) a week) Occasional Occasional (twice (twice a month a month or less) or less) Regular (at least a few times a week) Occasional Regular (at (twice least a a month few times or less) a week) Occasional (twice a month or less)
KSA SA KSA SA Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results Frequent SMS users also use OTT messaging services, but the cannibalisation threat is more material in MENA SMS, frequency of use if using OTT services on mobile phones, by country 40% 40% 20% 20% 0% 0% Saudi Arabia South Africa Regular (at least a few times a week) Regular (at least a few times a week) Occasional (twice a month or less) 40% 20% 0% Occasional (twice a month or less) SMS 20% of OTT users do not use SMS in MENA Regular (at least a few times a week) Occasional (twice a month or less) 13
KSA SA KSA SA Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results Propensity to use OTT voice services is lower than OTT messaging, and constrained to MENA countries Skype, frequency of use on mobile phones, by country 40% 40% 20% 20% 0% 0% Saudi Arabia South Africa Regular (at least a few times a week) Regular (at least a few times a week) Occasional (twice a month or less) 40% 20% 0% Occasional (twice a month or less) More than 70% of OTT users in SSA have not used Skype at all Regular (at least a few times a week) Occasional (twice a month or less) 14
Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results YouTube is the most-accessed online video service by surveyed mobile Internet users Most accessed video service on mobile phones, by type and country 15 YouTube YouTube Catch-up TV Catch-up TV Local news Local news Live sport Live sport International news International news Other Other 0% 25% 50% 75% 0% Percentage Saudi Arabia 25% of respondents Sub-Saharan 50% region 75% average More than 70% of users in the who watch video on their phones use Wi-Fi only Saudi Arabia Sub-Saharan region average
Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results 16 Survey research methodology Internet access: phones filling the fixed broadband gap Phone usage: plenty more than traditional telecoms services Over-the-top players' business models Key take-away points
1Q 2010 2Q 2010 3Q 2010 4Q 2010 1Q 2011 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013 Revenue (USD million) ARPU (USD per month) Revenue (USD billion) Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results 17 Internet companies depend on advertising spend Facebook s revenue and ARPU Google s quarterly revenue split 2000 1800 1600 0.6 0.5 16 14 1400 1200 1000 800 600 0.4 0.3 0.2 12 10 8 6 400 200 0 0.1 0 4 2 0 2Q 2011 3Q 2011 4Q 2011 1Q 2012 2Q 2012 3Q 2012 4Q 2012 1Q 2013 2Q 2013 Mobile advertising Payments and other fees Non-mobile advertising ARPU Motorola Mobile Other Google Network members' websites advertising Google websites advertising
Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results Facebook and Google s move into mobile is a defensive response to fixed mobile substitution 18 Revenue Ad exposure Cost Usage Online 1 Mobile
Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results Google aims to capture the mobile experience to boost its advertising revenues Google s value chain positioning Google s service strategy 19 Advertising Google advertising E-commerce Content Third-party content Google Play content and YouTube Apps & services Communications Google Voice, Gmail, Hangouts Google Wallet, Google Shopper Location Google Maps, Google Goggles Apps and services Third-party apps and services Google apps and services Google+ Operating systems Devices Androidpowered devices Devices with other operating systems Google search
Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results 20 Facebook s universe is full of revenue opportunities Consumers Facebook Pages Places, Events Like Comment Businesses Facebook advertisements Advertisers Facebook Gifts In-app advertising Consumers Developers Facebook Platform and Facebook Marketplace Distribution/reach Money flow
Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results 21 Survey research methodology Internet access: phones filling the fixed broadband gap Phone usage: plenty more than traditional telecoms services Over-the-top players' business models Key take-away points
Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results 22 Key take-away points Mobile is the main channel to the Internet Operators have an opportunity to manage that first (and possibly only) Internet experience MEA mobile Internet users have a great appetite for online services They access a variety of OTT services despite limited access to high-speed mobile networks and smartphones Mobile Internet users are new, but they are also demanding Quality-of-service network fundamentals and affordable tariffs are the main drivers for increased data usage OTT players are challenged by the mobile market They are keen to extend the reach of advertising to mobile and to boost their advertising revenue
Mobile Internet trends in the Middle East-Africa region: mobile Internet survey results 23 Thank you for your attention. Any questions? Karim Yaici Analyst karim.yaici@analysysmason.com Ronan de Renesse Principal Analyst ronan.derenesse@analysysmason.com