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Mobile Commerce I n T he Czech Republic

This presentation explores the significance of mobile commerce for the Czech economy. It covers terms/definitions, determinants of m-commerce, technologies, sociological implications, applications, m-business, m-marketing, user acceptance, penetration, and market structure in the Czech Republic. It delves into the history, development, and deployment of mobile technologies, along with key determinants affecting m-commerce volume. The market structure, postpaid vs. prepaid services, penetration by education and economic activity, and real penetration rates are analyzed, providing insights into the mobile industry in the Czech Republic.

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Mobile Commerce I n T he Czech Republic

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  1. Mobile CommerceIn TheCzech Republic Ondřej Částek castek@econ.muni.cz

  2. Significancefortheeconomy • improvesemployment • improves GDP Example: Marketing spendings by mobile network operators 1992: Czech telecomunications to SPT Telecom 10 mil. CZK 2000: SPT Telecom to Czech Telecom 250 mil. CZK 2002: Czech Telecom to Telefonica O2 500 mil. CZK 2002: Paegas to T-mobile 500-600 mil. CZK 2005/6: Oskar to Vodafone 500 mil. CZK

  3. Content of the presentation • Terms/definitions • What is mobile commerce • Determinants of m-commerce • Technologies (history, overview) • Sociological implications • M-commerce applications • M-business • M-marketing • M-tagging • User acceptance • Penetration in the Czech Republic • Market structure in the Czech Republic • M-commerce in the Czech Republic

  4. Terms Landline, - main line or fixed-line - a telephone line which travels through a solid medium, either metal wire or optical fibre

  5. Terms Mobile network carrier - mobile network operator (MNO), also known as carrier service provider (CSP), wireless service provider, wireless carrier, mobile phone operator, or cellular company, is a telephone company that provides services for mobile phone subscribers

  6. Terms Postpaid - on plan, tariff, tariff plan – use and than pay model. Usually period of one month and at least „base“ fee has to be paid. Prepaid - pay and than use model. Doesn‘t involve obligation to pay if you don‘t use the service, usually doesn‘t require a contract.

  7. Mobile commerce - definition • Set of processes which result in financial obligation and where at least one part is executed via mobile technologies Mobile technologies • Infrastructure operated by mobile network carriers

  8. M-commerce applications • Contentservices (sendingofmessages, dictionaries, …) • Messaging – sending SMS/MMS to customers • Remote Access/Mobile Office (access to company´s intranet) • EmergencyServices (112, 911) • Video and audio data – usually by 3G services • Entertainment – games, competitions, ringtones • Tailing – purchasingorreservationoftickets (Mobitickets) • FinancialServices – banking and broking • Payment – m-payments • Navigation – Globalpositioningsystem • Telemetry – automaticsendingof data betweenmachines • Marketing services – SMS inquiries, company´s logos, collectingofloyaltybonuses via mobile phone

  9. Determinants of m-commerce volume • Technlogies implemented • Mobile phones penetration • Services offered

  10. Technology - development • Zerogeneration • Firstgeneration (NMT) • Second generation (GSM) • Thirdgeneration (UMTS) • Fourthgeneration Displayes: getlarger and full-colour, resolutiongrows Procesors: get more powerful Capacity: increases Stand by timeiscounted in days

  11. Third generation • Much faster data transmission than before • Therefore new services possible • Devices of higher performance • New services involve multiple parties

  12. Third generationdeployment problems • High price for licences • Low range (frequency usually 2100 MHz) • High initial costs • Uncertainty of consumer acceptance • Uncertainty of killer applications

  13. Technologies available in CR

  14. Penetration • Penetration is one of three determinants of m-commerce • Together with density of population number of customers determine ratio: infrastructure costs

  15. Penetration in the CZ SIM cards in the CZ in thousands

  16. Penetration in the CZ Active SIM cards and mobile phoneusers per 100 inhabitants in the CZ

  17. Penetration in the CZ Red: fixed lines Blue: active SIM cards (in thousands)

  18. Market structure in CZ Active SIM cards in milions

  19. Market structure in CZ Quarterly changes in active SIM cards

  20. PostpaidvsPrepaid in CZ Customers on prepaid and on postpaid services prepaid on plan

  21. Prepaid vs. Postpaid • Postpaidcustomers are much more profitable - In 2008 Vodafone had about 50% customers on plans (= postpaid) and the ARPU ofthemwas 966 CZK monthly. Compare to ARPU ofprepaidcustomers 342 CZK • Customers on plan are more likely to beloyal - Thatisimportantfor full portability ofphonenumberswasintroduced

  22. Penetration in CZ Mobile phone users according to education (16yrs and older) University High school Vocational training Primary education

  23. Penetration in CZ Mobile phone users according to economical activity (16yrs and older) Student Employed Unemployed Retired

  24. Real penetration % of all people older 15 years Total 15+ 16 – 24 25 – 34 35 – 44 45 - 54 55 - 64 65+ Males Females

  25. Penetration in CZ (2008) • Real penetrationabove 16 yrs: 87,9 % • 16 – 54 yrs: 96 – 98 % • 55 – 64 yrs: 87 % • 65+ : 45 % women, 62 % men

  26. The start of use of mobile phones

  27. How do we use MP? • Spendings on fixed lines are decreasing, on MP increasing • whilepricesofcalls and SMS are decreasing • numberofminutesusedincreaseseachyear (2010: 15 bil. minutes) but revenuesfromcalls in 2008 and 2009 decreased, 2010 increased (45.2 bil. CZK) • numberof SMS usedincreaseseachyear (2010: 8.1 bil.) but revenues go up and down (2010: 8.5 bil. CZK) • whichmeansthatoperatorsyield more and more from data services

  28. How do we use MP • 2010: averagespendingsfordefinedconsumption basket in EU 16 E/month, in the CZ around 27 E/month (for basket of 65 calls and 50 SMS and a few MMS)

  29. Averageprice per minute in CZK light blue: per minutecharged dark blue: per realminute

  30. Average ARPU forcalls per year in CZK

  31. Averageprice per SMS sent in CZK

  32. Averageoverallrevenue per user in CZK

  33. Why do people use mobile phones?

  34. Social connectivity (Morley, 2003) Mobile phone (MP) intensifies the social connectivity of the owner. To have MP means to be connected, to be a part of social network, to be available everywhere by everybody. 76 respondents between 17- 18, 2007

  35. Attitude toward MP • If others had not have it, I would not have it too The determinant here is the social network, social connectivity • I am addicted to MP Saves time, is personal, not to have it is boring

  36. MP – strongly personal thing • Ishii, 2006: MP is not as much issue of mobility as issue of personalization and localization. 50 % of calls are made from home, 40 % from work and only 10 % outside these places Mobility is matter of place, time, and context

  37. Mobility: place • Physical motion from place to place Mobility: time • Results from physical mobility, means accelerating of processes, saving time, flexibility. • Micro-coordination, softening of time

  38. Mobility: context • Communication face to face has to comply with context: environment, particular situation, mood. Mobile communication frees the participants of this. Case: SMS vs videocalls • Does m-communication mean greater or lesser freedom?

  39. Mobility • Disconnectivityanxiety (Jim Taylor) • Feelofsafetyif in reachofown mobile phone • Ownworld in thepocket

  40. Domestication of MP(Silverstone, Silverstone & Haddon) • Innovation is a process, not a single event Assumptions: • look behind function • (1) imaginativeness, (2) acquiring, (3) materialization, (4) transformation

  41. M-commerceapplications (characteristicscompared to PC) • Low initial costs • Easy of use • Immediate use • Clear identification • Localization • Penetration • Display

  42. M-business applications(forms) • m-Presence • m-Payment • m-Banking • m-Purchasing • m-Procurement • m-Shop • m-Auction • m-Care • m-Marketing

  43. M-marketing(characteristics) • Form of direct marketing • Still in its beginning • Any form of marketing activity via mobile phone

  44. M-marketing(forms) • SMS messages • SMS competitions, voting, inquiries • Advergaming (via SMS, WAP, Java games) • Logos, ringtones • Bluecasting, cell broadcasting • Mobile tagging

  45. Mobile Tagging • A product bears a tagg • User takes a picture of the tagg by mobile phone • Application in mobile phone translates the picture into unique ID code, connects to server and provides link to webpages (or wappages) of product in question

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