Mobile Web Watch 2012

Mobile Internet- spawning new growth opportunities in the convergence era

Special Edition: Germany, Austria, Switzerland

ContentsExecutive Summary 3

Usage Behavior 6

Drivers of Usage 12

Challenges 16

Opportunities 20

About the Survey 24

Conclusion 26

Executive SummaryMobile devices are rapidly becoming the primary medium to access the Internet across all age groups in Germany, Austria, and Switzerland. In a world brimming with smarter smartphones, tablets, notebooks, and other affordable Web-enabled mobile devices, and powered by better network coverage, faster broadband connections, Wi-Fi networks, and the explosive growth of mobile apps, the demand for ubiquitous availability of Internet is only getting stronger.

As the excitement around every new version of a smartphone or tablet gathers momentum, more and more people in Germany alone, for example, there are 30 million mobile Internet users. Unlike in 2008, when the first Accenture survey was conducted to assess mobile Internet usage, German users are no longer ambiguous about connecting to the Internet on the go, nor are they deterred by the cost of data connection. The fifth edition of the Mobile Web Watch confirms that mobile Internet usage, which first started gaining significant momentum in the 2009 survey, continues to be on an upward trajectory in delete gap between 2012. Respondents in Germany, for example, are accessing the Internet on their smartphones, tablets and netbooks not just for e-mails but also to buy products, compare prices, monitor the weather, download videos, and keep up with news. Indeed, there has been a dramatic jump in mobile Internet usage with users nearly doubling since 2011.

Significantly, this trend of increasing mobile Internet usage is taking place simultaneously with the growing use of stationary devices such as personal computer, TV and gaming consoles to access the Internet. The boundaries between devices are clearly blurring in this multi-device and multi-platform environment.

The survey results for Germany, Austria and Switzerland mirror the findings in ten other countries from Europe, Latin America and South Africa—the countries that have been included for the first time in the Mobile Web Watch survey. The major highlight of the survey is that mobile Internet usage is on the rise across mature and emerging markets, and also across age groups. Indeed, it has now reached the stage when market players across communications, media and technology should look forward to business opportunities and the operational efficiencies of a mass market. That is, if they are prepared for it.

Mobile Web Watch, 2012, brings to the fore five key trends in the digital consumer’s behavior that have implications not only for players in telecommunications, media and technology, but also for those in industries such as retail and automotive, and in utilities.

A key finding of the survey is that a majority of Internet users connected to the Internet with a mobile device in the past year, with smartphones emerging as the most popular mobile Internet access medium. In fact, activities or transactions on mobile Internet have become so much a part of daily life that those who don’t own a mobile Web-enabled device intend to buy one soon. The survey identifies usability and mobile apps as the primary drivers of mobile Internet use, with a higher proportion of users having downloaded programs and apps on their mobile devices in the past year.

Consumers are now more willing than ever before to pay for premium services. The survey also identifies mobile payments as a significant growth avenue with growing use and awareness of these services. The opportunity in augmented reality services is huge with half the mobile Internet users surveyed expressing interest or planning to use these services in the future. In fact, a large segment is even willing to pay for cloud services.

A key driver of mobile Internet usage has been significant improvements in network quality and coverage over the years—the user’s primary criterion in selecting a service provider. The survey highlights how consumers are increasingly looking for superior Internet experiences on their mobile devices, similar to what they are used to on their computer or television. While on-the-go online services, such as news, traffic and travel information, and banking are of the highest importance to mobile Internet users, concerns about data security persist, especially for those using or considering the use of cloud services. With users expressing annoyance with online advertising, marketing companies will need to focus on more targeted advertising.

In the following pages, we explore the findings for Germany, Austria and Switzerland in greater detail and discuss the implications they may have for companies looking at seizing the opportunity arising out of the growing use of mobile Internet in this region.

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•58%, 71%, 76% of respondents in Germany, Austria and Switzerland respectively, connected to the Internet through a mobile device.

•50% of participants in Germany connected to the Internet through a smartphone as compared with 62% and 67% of the survey respondents in Austria and Switzerland, respectively.

•There is growing use of netbooks and tablets for mobile Internet: 28% in Germany and around 35% in Austria and Switzerland did so through a netbook; tablets are more popular in Switzerland (26%) for mobile Internet use than in Germany and Austria (17% and 16%).

•59% of men in Germany compared to 58% of women used mobile Internet; in Austria it was 76% of men vs. 66% of women; Switzerland (80% vs. 72%).

•48% used mobile Internet for personal matters compared with 15% for work-related matters; Austria (59% vs. 22%); Switzerland (64% vs. 26%).

•38% of those above 50 among the respondents in Germany use mobile Internet vs. 84% of those in the age group 14 to 29. (Austria: 53% vs. 88%; Switzerland: 55% vs. 91%).

•58% of respondents in Germany (Austria: 59%, Switzerland: 55%) accessed online communities such as Facebook.

•50% of respondents in Germany (Austria: 50%, Switzerland: 38%) conducted a banking transaction using their mobile device.

•67% respondents in Germany and Austria (Switzerland: 78%) downloaded programs or apps on their mobile device.

•47% of respondents in Germany downloaded or viewed short videos (less than five minutes); (Austria: 57%, Switzerland: 55%).

•74% of respondents have concerns over data security (Austria: 66%, Switzerland: 68%).

•72% are interested in cloud consumer services (Austria: 71%, Switzerland: 65%).

•86% are interested in premium technical services (Austria: 88%, Switzerland: 80%).

•36% accessed the Internet through a TV and 25% through a gaming console (Austria: 35%, Switzerland: 43%).

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• Growing use of mobile Internet

Mobile Internet usage is rising across countries. For example, in Germany alone, there are 30 million users of mobile Internet-a dramatic rise from 28 percent in the 2011 survey to 58 percent in 2012 survey. (Austria: 71 percent in 2012; Switzerland: 76 percent).

• Narrowing gender gap

Germany has bridged the gender gap use with 59 percent of men accessing mobile Internet compared with 58 percent of women, with 59 percent of men accessing mobile Internet as compared wirh 58 percent women. In the previous survey, only 17 percent of women accessed the Internet through mobile devices as against 37 percent of men. In Austria, the gender differences are wider at 76 percent vs. 66 percent. The gap is also narrowing in Switzerland (80 percent vs. 72 percent).

• More personal than work-related use

48 percent of the respondents in Germany (Austria: 59 percent, Switzerland: 64 percent) accessing the Web on a smartphone did so for personal matters against 15 percent (Austria: 22 percent, Switzerland: 26 percent) for work-related matters.

• Finally the world is always on

85 percent use their mobile device to access the Internet once a day or more. Of those accessing online communities, Twitter or mobile blogging, over 80 percent do so more than once a week.

• Gen X showing growing appetite for mobile over Internet

A little over 80 percent of those in 14-29 age bracket accessed the Internet on a mobile device, but at least 38 percent of those above the age of 50 were also involved in such activities in Germany; Austria (53 percent vs. 88 percent), Switzerland (55 percent vs. 91 percent).

• There is an app for everything

A majority of mobile Internet users in Germany (58 percent), Austria (59 percent) and Switzerland (55 percent) used their mobile device to access online communities such as Facebook. However, these numbers were below the total survey average of 62 percent. In the case of mobile banking, the usage in Germany (50 percent) was higher than the average of 46 percent of all respondents in the survey. Marginally fewer users in Germany and Austria (67 percent) downloaded programs or apps on their mobile device compared to 71 percent across all the surveyed countries.

• Videos on mobile grabbing eyeballs

47 percent of the users in Germany, 57 percent in Austria and 55 percent in Switzerland downloaded or viewed short videos of less than five minutes as against the survey average of 57 percent.

• Quality is king

Quality of the network and coverage are the most important criteria in choosing a network provider for access to the Internet over a mobile device while cost of data is ranked the fourth-most important factor, behind connection speed.

• Data security concerns impede mass adoption

More mobile Internet users in Germany (74 percent) than in other countries (70 percent) are concerned about data security. The comparable data for Austria and Switzerland is 66 percent and 68 percent, respectively. Data costs are a concern for only 10 percent of the German users as compared to 23 percent of the global survey average. Even fewer users (5 percent) in Austria cite data costs as higher than expected.

• Opportunity to monetize new services

86 percent of respondents in Germany, 88 percent in Austria and 80 percent in Switzerland are interested in premium technical services; 72 percent (Germany), 71 percent (Austria) and 65 percent (Switzerland) are interested in cloud services. Half the respondents in Germany, for example, are even willing to pay up to €10 for premium services.

Core Findings for Germany, Austria and Switzerland

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Usage Behavior

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Figure 1a. Internet users connecting to the Web through mobile devices. © 2012 Accenture. All rights reserved.

• Smartphones are the most popular mobile access method to the Internet with 50% of respondents in Germany using smartphones versus 28% for netbooks and 17% for tablets.

• Age is a differentiating factor with 82% of those aged 14-29 accessing the Internet on a mobile device versus only 27% for people above 50 (Germany).

Mobile devices used in the past 12 months to access the Internet

58% of respondents (Germany) have used mobile devices to access the Web in the last 12 months

Gaming console

TV

Computer/Laptop

Tablet

Netbook

Smartphone50%

62%67%

91%94%93%

36%35%

43%25%25%26%

28%34%35%

Multiselect

Base: Germany (n=1,615); Austria (n=789); Switzerland (n=560); Excluded don't know answerSource: Mobile Web Watch Survey, 2012

Germany Austria Switzerland

0 10 20 30 40 50 60 70 80 90 10

17%16%

26%

92% of respondents in Germany (Austria: 95%, Switzerland: 94%) have used stationary devices to access the Web in the last 12 months

Internet through mobile devices poised to outpace access from stationary devices? In Germany, the percentage of respondents using the Internet on the go has risen dramatically from 28 percent in the 2011 survey to the current level of 58 percent. Also, the popularity of mobile Internet has also grown dramatically in Austria and Switzerland, where 71 percent of the respondents (versus 42 percent in 2011) and 76 percent (versus 44 percent in 2011), respectively, used mobile devices to connect to the Internet.

This upward trend is in line with the results of the other countries in the survey. An average of 69 percent of Internet users connected to the Web with a mobile device in the past 12 months. Among non mobile Internet users, 40 percent expressed interested in buying a Web-enabled mobile device in the future, providing greater evidence than before that the mobile Internet is close to becoming a mass market.

Like in most other countries in the survey, smartphones are the most preferred mobile devices for Internet access in Germany (50 percent), Austria (62 percent) and Switzerland (67 percent). The use of tablets is also on the rise among mobile devices. In Germany, for example, 17 percent of the respondents said they access the Internet through tablets—a sharp jump from 3 percent in 2011. But more people in Switzerland are likely to be using a tablet for Internet access (26 percent) than in the other two countries. Netbooks too are popular with 28 percent of the survey participants in Germany (34 percent and 35 percent in Austria and Switzerland, respectively) having connected to the Internet through this device.

The lure of the mobile Internet is so strong that its use extends to older generations too. In Germany, for example, 27 percent of those above 50 years used the Internet on the go as compared to only 15 percent in 2011. And, as expected, the youth are the greatest users of mobile Internet with 80 percent of the participants in the age group of 14 to 39 years. In Austria and Switzerland, 83 percent and 92 percent of the respondents, respectively, aged 14 to 39 years were mobile Internet users; and at least 40 percent of those above 50 years accessed the Web through their mobile devices.

Globally too, the mobile Internet attracts a good mixture of both the young and the old. Of the 61 percent of respondents who used smartphones for accessing the Internet, more than 70 percent were in the younger age group (between 14 and 39 years). Interestingly, more than half of those above the age of 50 used their smartphones for Internet-related activities.

While the overall upward trend is evident across all the countries that were surveyed, the emerging markets of Brazil, South Africa and Russia showed the highest adoption of smartphones (above 70 percent on average) for Internet use. This is in line with developments in other emerging markets such as India. These countries, with a dearth of fixed lines, have been witnessing a hypergrowth mobile phone revolution for some years now, fuelled in part, by declining costs—both of devices and subscription rates—and a growing wealthy middle class. The widespread lack of personal computers, relatively more expensive than mobile phones, meant that for many people, the mobile phone would be the first entry into the Internet world.

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a Web-enabled mobile phone in the near future (Brazil 78 percent, Russia 73 percent, Mexico 61 percent, South Africa 57 percent versus an average of 46 percent for all countries versus 38 percent in Germany).

This segmentation of the market by device category revealed by the survey has implications for not only device manufacturers but also for players in the communications, media and technology value chain, such as communication service providers, device manufacturers, content providers, communications operators, Internet security companies and Internet advertisers.

Increasing consumerization of IT at workplaceAccording to the survey results for Germany, there is a reversal in the trend of using smartphones for professional purposes: 15 percent of the people accessing the Web on a smartphone did so for work-related matters versus 48 percent for personal activities. In the 2011 survey, those doing work-related activities on smartphones totaled 56 percent as compared to 25 percent for personal work. This finding reflects the fact that until recently smartphone was driven by business use on account of high costs. However, in a mass consumer market, the usage pattern has reversed.

Strong demand for Web-enabled mobile devicesThe plethora of Web-enabled mobile devices available clearly shows growing demand. While the average for all the countries was 46 percent (respondents claiming their intent to buy such a device soon), it was around 35 percent for Germany, Austria and Switzerland. Even those who don’t own a Web-enabled phone have tried to use the Internet through a mobile device at least once (45 percent in Germany as compared to the average of 60 percent for all countries) or plan to do in the near future (22 percent versus 45 percent average of all countries).

While smartphones are the dominant mobile devices for Internet access, the rising popularity of netbooks and tablets shows that the digital consumer seeks an array of features while connecting to the Internet, anywhere, anytime. Indeed, their increasing use across countries and across demographics highlights the unprecedented computing power in the hands of the hyper-connected consumer. In Germany, for example, there has been an upsurge in the number of people using these devices—jumping up from only 3 percent using tablets in the 2011 survey to 17 percent in 2012.

The emerging markets lead in terms of future demand too. For example, more respondents in the emerging markets than in mature markets, expressed their intention to buy

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% who used a mobile device to access the Internet

Men are still using mobile Internet more frequently than women

Mobile devices used in the past 12 months to access the Internet(e-mails, apps, news, downloads)

Base: All respondents

(n=17,225; Excluded, no answer)

Source: Mobile Web Watch Survey, 2012

FemaleMale

8

Finland

65%72% 75%

68%

United Kingdom

64%

77%

France

59%

Germany

70% 70%

RussiaAVG

75% 73%

Italy

66%

76%

Ireland

78%76%

Austria

71%76%

Spain

66%

77%

Mexico

62%

78%

Brazil

48%

79%

Switzerland

63%

80%

SouthAfrica

53%

82%

58%

Figure 1b. Gender differences in mobile Internet access are narrowing. © 2012 Accenture. All rights reserved.

The survey shows that the proportion of professional work done on other mobile devices such as tablets was higher than that on smartphones. However, our experience with clients suggests there is an underlying trend that reveals a blurring of personal and work-related activities on mobile devices as the mobile Internet becomes a mass consumer market. People are using their personal devices increasingly in work-related environments. This trend in consumerization of IT has implications for enterprise IT. Companies are already working towards allowing consumer devices for work-related activities to lower costs, increase productivity and improve employee engagement, creating a mixed device environment where private and social data from native and Web apps reside alongside mission-critical enterprise data.

Additionally, the survey shows that of those accessing the Internet a large proportion of them (average of 85 percent across the surveyed countries and around 80 percent in Germany), do so at least once a day. The frequency of use only reflects the fact that the mobile or digital consumer now has a choice of activities that can be conducted on a mobile phone other than just making phone calls and texting.

Gender differences in mobile Internet usage are blurringThe gender differences in the usage pattern continues to be the same as in previous Accenture surveys (which were limited to three countries—Austria, Switzerland and Germany) with more men (73 percent) than women (66 percent) using mobile Internet but there is evidence that the gap is narrowing. For example, in Germany, the differences have nearly disappeared, with 59 percent of the men surveyed accessing the Web through mobile devices against 58 percent women compared with 37 percent and 17 percent, respectively in 2011. There are, of course, some countries such as Finland and Austria where the gender bias is significantly wide. However, results from Ireland, where the reverse situation exists with 78 percent of women and 76 percent of men using mobile Internet, also suggest mobile Internet use may eventually follow the overall demographic gender profile of the country in time.

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Growing use of mobile Internet for e-mail, phone or video calls and social mediaReceiving and sending e-mails continues to be the most pervasive use of the Internet on mobile devices in Germany with 65 percent (Austria: 69 percent, Switzerland: 73 percent) using an e-mail program installed on their mobile device, while 58 percent used the website of an e-mail provider (Austria: 57 percent, Switzerland 59 percent). This falls marginally lower than the average for all countries –70 percent and 62 percent, respectively.

Phone or video calls via the Internet ranks as another popular activity among mobile device users in Germany (67 percent of the users indicated this service as “quite and extremely important”). However, a host of other activities such as messaging through social media, blogging and tweeting, and watching videos are also on the rise; 58 percent of the respondents in Germany said they access social media platforms and online communities through a mobile device, and 50 percent use instant messaging apps. The data for Austria and Switzerland are similar to that of Germany.

Germany ranks below the all-country average for these online services with Mexico and South Africa as the top users of these services, especially instant messaging (84 percent and 80 percent, respectively), and blogging and tweeting (40 percent and 39 percent, respectively). Following closely are respondents in Brazil (73 percent) and Spain (70 percent).

The frequency of these activities is also trending upwards in all countries. The survey results for Germany show that of those into mobile blogging or accessing online communities or Twitter, over 80 percent did so more than once a week with younger people more active than older people: 90 percent of those aged 14-19 compared to 82 percent of those in the above 50 age bracket. This trend of using mobile devices to access social media and online communities provides the key to understanding consumer behavior. Increasingly, mobile phone manufacturers now focus on providing user-friendly features or embedded platforms for such activities.

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Sending or receiving e-mails is still the most popular activity but others, such asaccessing online communities, blogging and banking, are catching up quickly

Activities carried out on mobile Internet devices

• Sending or receiving e-mail is the most popular activity among German mobileInternet users with 65% using their mobile device.

• In Germany 58% used their mobiledevice to access online communities

instant messaging, while 17%used it for tweeting and blogging.Mobile banking growth is also evident with 50% using a mobile device to conduct a banking transaction.

Received and sent e-mails via the website of an e-mail provider

Managed banking transactions

Mobile blogging and tweeting

Used instant messaging (AOL, Yahoo, Skype, Windows InstantMessenger, G Talk, Whatsapp, BBM)

Received and sent e-mails through a mail program installed on the mobile device

Base: All respondents using a mobile device to access the Internet (Germany n=895; Austria n=509; Switzerland n=399; both personal and work-related)

Source: Mobile Web Watch Survey, 2012

Accessed online communities/platforms(MySpace, StudiVZ, Facebook, Xing, Tuenti) such as Facebook, 50% for

Germany Austria Switzerland

65%69%

73%

58%57%59%

58%59%

55%

50%42%

54%

50%50%

38%

17%15%16%

Figure 1c: Accessing online communities, blogging and mobile payments on the rise. Base: n=11,884 (global sample size); both personal and work-related © 2012 Accenture. All rights reserved.

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Drivers of Mobile Internet Usage

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Which of the following programs or apps have you downloaded from the Internet on your smartphone/tablet/netbook?

Source: Mobile Web Watch Survey, 2012

Base: All respondents who download apps for any use (Germany n=625, Austria n=370, Switzerland n=328, both personal)

Entertainment apps (single or group games)

Information apps(train schedules, weather news)

Educational apps (language-learning programs, reference works)

Apps for arranging leisure activities (events, contacts with friends)

Organizational apps (financial spreadsheets, voice recorder

Apps that help manage your money (household, bookkeeping, budget calculator)

Fitness and health apps (training, nutrition guide)

training, planning, nutrition guide)

Germany Austria Switzerland

81%

90%84%

58%

66%63%

55%

55%50%

47%

51%45%

40%

35%36%

33%

20%26%

36%

25%29%

Figure 2a. Mobile apps fuelling Internet use through mobile devices. © 2012 Accenture. All rights reserved.

Mobile apps accelerating Internet useThe survey identifies mobile apps as one of the primary drivers of mobile Internet use. As a gateway to the Internet, mobile apps are extremely convenient. Information apps, such as train schedules and weather news, are the most popular app download in Germany (81 percent), Austria (84 percent) and Switzerland (90 percent).

47 percent of the mobile Internet users surveyed in Germany (Austria: 57 percent, Switzerland: 55 percent) have downloaded or viewed short videos (of less than five minutes), checked weather information, retrieved travel information or read the news on their mobiles.

The survey confirms that apps are the most popular among the youth with a higher proportion of those aged 14-29 years, in Germany for example, downloading apps (76 percent in the 14-19 age group and 82 percent in the 20-29 age bracket) and 61 percent in the 14-19 age group and 43 percent in the 20-29 age bracket, downloading music. A marginally higher share of men download programs or apps (69 percent) as compared to women (65 percent).

The survey’s findings, highlighting the explosive growth in consumer demand for communication, entertainment, commercial and social networking activities over the Internet implies significant and continued investment in infrastructure upgrades by communication service providers will be required to keep up with customer needs. Planning for this investment in a systematic way is critical to ensure adequate finance is available. Additionally, it needs to be done as part of an overall strategy capitalizing on the potential revenue opportunities available to providers by offering new and additional services through this medium.

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Choice of operating systems and usability adding to demandThe availability of different operating systems (OS) is also fuelling the growth of mobile Internet. When it comes to devices, 85 percent of all the survey participants said that the OS was the most important factor in selecting a smartphone or tablet.

Figure 2b. Operating system is crucial in smartphone and tablet selection. © 2012 Accenture. All rights reserved.

Which of the following is your preferred operating system?

Bada (Samsung)RIM (Blackberry)Microsoft Windows

iOS (Apple)Android Symbian (Nokia)

Source: Mobile Web Watch Survey, 2012Base: Respondents using a smartphone or tablet who see operating system as 'somewhat/very important'

46%

50%

34%

26% 27%

44%

20%

15% 15%

3%4%

3% 2% 2%3%

2% 2% 1%

Germany Austria Switzerland

(Germany n=613, Austria n= 342, Switzerland n=316)

The OS is a crucial factor as consumers want easy access to services they consider important such as communications, traffic and travel information, banking and access to social networks.

The most preferred OS in Germany is Android (46 percent), followed by iOS (26 percent) and Microsoft Windows (20 percent). However, in Switzerland, the iOS is more popular than Android (44 percent versus 34 percent).

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Blurring device boundaries: Using the Internet via TV and gaming consoles in GermanyGoing beyond drawing the attention of communications, media and technology players toward the growing popularity and use of mobile Internet, the Mobile Web Watch Survey 2012 also presents interesting findings around multi-device usage. Ushering in a second stage of evolution with Internet content relocating to multiple devices and platforms, a remarkably high—92 percent of the respondents in Germany (Austria 95 percent, Switzerland 94 percent)—have used stationary devices such as personal computer, television (TV) or gaming console—to access the Web in the last 12 months. The survey reveals 36 percent of these respondents accessed the Internet through TV, a significant share considering that the uptake of “smart or connected TV” has been more pronounced only in the last couple of years. Around a quarter of the respondents have watched movies, TV shows or longer video clips (more than five minutes) over the Internet on TV.

Another device class that has emerged as an entry platform for consumers’ Internet activities is the gaming console with 25 percent of respondents in Germany and Austria (Switzerland 26 percent) using these for accessing the Internet. Not surprisingly, the highest penetration of gaming consoles is in the younger age group (44 percent among those between 14 and 19 years) but those in the 30-39 age bracket (38 percent) are also using the Internet via consoles.

With the boundaries of devices becoming increasingly blurred, these findings undoubtedly signal a new leap in convergence that calls for market players to shape their service offerings to maximize the “connected world” experience of consumers—both at home and on the go.

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Challenges

Data concerns persist, especially over cloud services One of the biggest obstacles to a faster adoption of the Internet on mobile devices first detected in the 2008 survey was the concerns over data security. This has extended to the use of cloud services too. The consumer wants a secure environment—74 percent of the mobile Internet users surveyed in Germany, 66 percent in Austria and 68 percent in Switzerland, were worried about the security of their data. In the case of those using or considering using cloud services, these concerns ranged from losing personal data, hacking of personal data to viruses harming mobile devices (Germany: 82 percent, Austria: 83 percent, Switzerland: 74 percent).

This finding highlights a significant opportunity for cloud service providers to work with network service providers to meet the data security needs of the digital consumer through adapted tariff plans and appropriate privacy policies.

Additionally, companies across the communications, media and technology value chain will need to take note of a finding that reiterates the annoyance factor associated with online advertising. A higher share of the mobile Internet users—who most often come across ad banners and coupons on tablets and advertising through texting on smartphones—find these services annoying. This again brings to light the growing struggle of advertising and marketing companies in finding innovative ways of getting their messages across. Service providers and content developers will need to explore opportunities to collaborate with marketing and advertising companies to overcome this barrier.

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What are the main concerns you have about consumer cloud services?

Source: Mobile Web Watch Survey, 2012

I am not worried about using

I am worried that virusesand malicious programs

could harm my mobile devices

I am worried that other peoplewould access my data without my knowledge

I am concerned that my personal data(documents, phone numbers, e-mails)

could be lost

Base: All respondents interested in cloud/data storage services(Germany n=364, Austria n=194, Switzerland n=165)

consumer cloud services

52%

36%

45%

46%

49%

55%

Germany Austria Switzerland

28%

25%

27%

18%

26%

17%

Multiselect

Network quality is critical–consumers are looking for ubiquitous coverageConsumers want ubiquitous coverage—a network that follows them everywhere and provides compelling usage experience anywhere. The survey results for Germany, Austria and Switzerland show that the subscriber’s primary criterion in selecting a service provider is the coverage—around 86 percent of the respondents voted for coverage and an almost equal number chose network quality as the basis for network selection. This was closely followed by connection speed (81 percent). This was true across emerging markets too. In countries such as Mexico, Brazil and South Africa, more than 90 percent of the survey participants cited network quality as the most important basis on which they chose their network provider for mobile Internet access. The network quality criterion was at the top of the list, which along with connection speed and cost of data connection, included other factors such as quality of customer service, device subsidy, contract period, devices on offer and content from the service provider, and special offers.

The importance of all these criteria (which more than half of the respondents find crucial to their decision on network selection) implies that network providers will need to pay special attention to two basic things: constantly upgrading their network and offering innovative subscription packages. Significant investments in upgrading network quality and coverage would indeed be a critical driver in driving mobile Internet usage.

Cost of mobile Internet access as per expectationsWhile the subscriber’s primary criterion in selecting a service provider is the quality of network, the cost of data connection falls just outside the top three network selection criteria, possibly because such costs have stabilized. However, it is still an important criterion for 81 percent of the respondents in Germany (Austria 85 percent and Switzerland 77 percent). Interestingly, while a majority (69 percent) of the survey participants in the three countries felt the monthly cost of mobile Internet access was within their expectations, only 5 to 8 percent considered it to be high in Germany and Austria (and a significantly larger number (16 percent) in Switzerland thought it expensive). The findings for Germany and Austria are different from those of the other countries, where a quarter of respondents felt costs to be higher than expected.

Ad banners and advertising through texting considered to be annoyingAdditionally, companies across the communications, media and technology value chain will need to take note of a finding that reiterates the annoyance factor associated with online advertising. While a little more than half the respondents in Switzerland found ad banners annoying, 38 percent of the respondents in Germany and 47 percent in Austria were rather disinclined towards ad banners. An equal number of people in all three countries also found advertising through texting annoying. However, mobile phone owners felt more favorable towards advertising on special offers and promotions. In Germany, for example, more than 50 percent of the participants categorized text messages about promotions and special offers as informative with only 7 percent finding such ads annoying. Interestingly, over 20 percent actually found these ads amusing.

Figure 3a. Data security is a concern, especially in consumer cloud services. © 2012 Accenture. All rights reserved.

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29% 57%

29% 57%

54%

Germany 86%

Austria 86%

Switzerland 83%

Most important criteria in the choice of a network provider for mobile Internet access

Past experience with the provider

Quality of customer service

Cost of data connection

Special offers

Content available fromthe network provider

Devices on offer fromthe network providers

Contract period

The device subsidy

Connection speed

Coverage

Quality of network

Very important

Extremely important

• quality of network

and were the most

Coverage

important criteria in choosing a network provider for Internet access through a mobile device

• 85% of the respondents in Germany, Austria and Switzerland said quality of network was either very important or extremely important

• Connection speed was the next most important criterion, followed by cost

Base: All able to choose their personal and work-related network providers

Source: Mobile Web Watch Survey, 2012

• For 86% in Germany and Austria (Switzerland: 83%) coverage was the most important criterion

37% 48%

37% 48%

38% 47%

Germany 85%

Austria 85%

Switzerland 85%

29%

31% 50%

31% 50%

41% 41%

Germany 81%

Austria 81%

Switzerland 82%

27% 54%

24% 61%

30% 47%

Germany 81%

Austria 85%

Switzerland 77%

34% 27%

29% 31%

31% 31%

Germany 61%

Austria 60%

Switzerland 62%

31% 24%

28% 25%

33% 28%

Germany 55%

Austria 53%

Switzerland 61%

23% 21%

25% 27%

24% 22%

Germany 44%

Austria 52%

Switzerland 46%

26% 25%

23% 21%

25% 18%

Germany 51%

Austria 44%

Switzerland 43%

23% 15%

25% 21%

24% 16%

Germany 38%

Austria 46%

Switzerland 40%

20% 16%

15% 11%

19% 18%

Germany 36%

Austria 26%

Switzerland 37%

24% 18%

23% 15%

23% 17%

Germany 42%

Austria 38%

Switzerland 40%

Coverage and quality of network are the most important criteria in choosing a network provider for access to the Internet on a mobile device

(Germany n=1015, Austria n=558, Switzerland n=433)

Figure 3b. Consumers want good network quality and coverage. © 2012 Accenture. All rights reserved.

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Which statement about the monthly costs of accessing the Internet smartphone/tablet/netbook do you most agree with?

More than expected

What is expected

Less than expected

10%

72%

18%

5%

73%

21%

17%

62%

21%

My monthly cost is...through your

Source: Mobile Web Watch Survey, 2012

Base: All respondents using a mobile device to access the internet (Germany n= 934, Austria n= 553, Switzerland n= 421)

Germany Austria Switzerland

38% 17%31% 14%

9%14%30%47%

8%10%28%53%

Germany

Austria

Switzerland

24%50%19%7%

26%46%20%8%

21%44%25%10%

Germany

Austria

Switzerland

23%53%17%7%

21%59%9%10%

21%42%27%10%

Germany

Austria

Switzerland

22%34%21%23%

22%24%17%37%

22%31%17%30%

Germany

Austria

Switzerland

11%22%32%35%

12%17%25%45%

8%13%22%57%

Germany

Austria

Switzerland

How do you view these advertising messages?

Source: Mobile Web Watch Survey, 2012

Ad banners

Advertising through texting

Text messages or displays onspecial offers or promotions

at a store near you

Information on special offersand promotions sent to your mobile phone

16%

Coupons

Annoying Indifferent Informative Amusing

Base: All respondents encountering advertising messages

(n=6,444)

(n=4,679)

(n=4,179)

(n=2,131)

(n=4,184)

Figure 3c. Mobile Internet users find ad banners and advertising through texting annoying. © 2012 Accenture. All rights reserved.

Figure 3d. Monthly costs of accessing the Internet considered to be higher than expected. © 2012 Accenture. All rights reserved.

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Opportunities

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Are you making mobile payments on your smartphone/tablet?

Source: Mobile Web Watch Survey, 2012

Unaware

Aware

16%

84%

15%

85%Interested

or planning to use

26%

Do not use/notinterested in using

Currently using

62%

11%

27%

60%

13%

28%

62%

10%

Awareness Usage

Base: All respondents using smartphone or tablet to access the Internet(n=10,815)

Germany Austria / Switzerland Germany Austria Switzerland

Figure 4a. Mobile payments—growing awareness and use. © 2012 Accenture. All rights reserved.

Mobile payments—a growth engineTelecom players, payment gateway companies and enterprises need to note the growth potential in mobile payments. While only 11 percent of smartphone and tablet users in Germany (Austria: 13 percent, Switzerland: 10 percent) are currently using mobile payment services, 84 percent are aware of such services and an additional 28 percent indicated they would be interested or plan to use mobile payment apps. Indeed, mobile banking (m-banking) features quite high among the favored mobile Internet activities.

The survey shows that 50 percent of the respondents have used their mobile device for banking transactions. Banks are also increasingly adding the mobile platform to their mix of distribution channels to meet the growing demand for mobility. Not surprisingly, marketplace estimates put the number of m-banking users globally at 500 million by 2010.

Augmented reality Improved navigation features, lower data costs and availability of a range of apps are convincing digital consumers about the value addition of using mobile Internet. New and developing areas such as Near Field Communications and augmented reality services are set to push mobile Internet usage to a whole new level altogether. While only 10 percent of mobile device owners are also using augmented reality services in Germany (Austria: 8 percent, Switzerland: 13 percent) more than half of the respondents are aware of these services and close to 40 percent are interested in using them.

This is in line with the survey results in other countries, with 17 percent of the smartphone and tablet users using augmented reality services and a further 50 percent indicating they would be interested or plan to use such services soon. Overall, 23 percent of the respondents in emerging markets are using augmented reality services against 14 percent in mature markets. The intended adoption in the next 12 months will further widen this gap, with 26 percent of the respondents in emerging markets saying they plan to use these services against 20 percent in mature markets.

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For which of these services do you use mobile payments throughyour smartphone/tablet?

Buying food or groceries (n=1,682)

Buying other consumer goods

Buying clothes or shoes

Buying train, flight tickets

Buying tickets for events

Source: Mobile Web Watch Survey, 2012

Base: All respondents using mobile payment on their mobile device (Germany n= 92, Austria n=66, Switzerland n=41)

(concerts, cinema, theatre)

63%

54%

54%

66%51%

63%

46%

29%17%

33%31%

18%

24%9%

18%

Germany Austria Switzerland

Multiselect

Figure 4b. Mobile Internet users are willing to pay for premium services. © 2012 Accenture. All rights reserved.

Cloud servicesA majority of the mobile Internet users (57 percent) are aware of cloud and data storage services and are currently using or are planning to use these services (34 percent), according to the survey results for Germany (Austria: 54 percent, Switzerland: 65 percent). Moreover, 72 percent of respondents in Germany (Austria: 71 percent, Switzerland: 65 percent) who are interested in consumer cloud services are willing to pay for these.

As expected, there is higher awareness of consumer cloud services among the younger generation: 63 percent of those below 30 in Germany, for example, are aware of them, and close to half of them are either using these services or are planning to do so in the near future. Surprisingly, 48 percent of those above 50 are also aware of cloud services and 16 percent are either using them or planning to do so.

Awareness of cloud services is marginally higher in emerging markets (64 percent) than in mature markets (57 percent); the adoption rate is also expected to be far higher in emerging countries with half of the respondents saying they are either using or intend to use these services in the future, as compared to 33 percent in mature markets.

Willingness to pay for premium servicesWhile augmented reality services are yet to take off in a big way, one of the survey findings could have implications for the pricing strategies of mobile service operators (MSO). Well over 80 percent of the respondents in Germany, Austria and Switzerland are willing to pay for premium services and nearly a quarter are willing to pay €10–20 for premium services.

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How often do you normally use Internet services?

Access the Internet using tablet (several times a day)

Access the Internet using tablet (at least once a day)

Source: Mobile Web Watch Survey, 2012

Base: All respondents using a tablet accessing the Internet (Germany n= 934, Austria n=553, Germany n= 421)

33%

37%

27%

31%21%

32%

Germany Austria Switzerland

Rising tablet usage The growing popularity of tablets to access the Internet, especially among the youth, is opening up new growth avenues for businesses. The survey shows that tablets are used across all age groups, but attracts the highest usage among those in the age group 14-39. Thirty-three percent of the tablet users in Germany, for example, access the Internet at least once a day and about 31 percent of them do so several times a day (Austria: 37/21 percent, Switzerland 27/32 percent). A significantly large percentage of the respondents who own tablets (83 percent) in Germany say the most

important Internet activity involved buying products, such as books from Amazon, online. This was followed by comparing prices (71 percent). Other Internet activities include reading news and checking travel and weather information.

Across other countries in the survey, a majority of the respondents (66 percent) say that their Internet activities revolved around downloading and viewing short videos which run for less than five minutes while 52 percent watched movies, TV shows or longer video clips (more than five minutes). Other significant activities are checking prices (61 percent) and weather information or forecasts (59 percent), reading news (58 percent) and obtaining travel directions.

Figure 5. Frequency of mobile users accessing the Internet using a tablet © 2012 Accenture. All rights reserved.

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About the Survey

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The fifth edition of the Accenture Mobile Web Watch survey extends beyond the three countries (Austria, Switzerland and Germany) of the previous two surveys to include 10 more countries: Brazil, Finland, France, Ireland, Italy, Mexico, Russia, South Africa, Spain and the UK. The 15-minute online survey, covering 17,225 respondents, was conducted in native languages with a sample representative of Internet users across age, gender (51 percent men and 49 percent women), and incomes.

# Interviews by countryAustria

Brazil

Finland

France

Germany

Ireland

Italy

Mexico

Russia

South Africa

Spain

Switzerland

United Kingdom

Total

789

1,624

1,085

1,615

1,615

785

1,616

1,611

1,637

1,058

1,615

560

1,615

17,225

Age14-19 years

20-29 years

30-39 years

40-49 years

More than 50 years

10%

24%

21%

18%

27%

The survey explored the use of smartphones, tablets, netbooks, personal computers, television and gaming consoles to access the Internet; frequency of mobile Internet usage; range of activities on the Internet; use of social media, online platforms and online services on mobile devices; brand preferences for devices and operating systems; the consumer’s criteria for network selection, ability and willingness to pay for premium services; and the barriers to the adoption of mobile Internet.

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Mobile Internet is Mass Market in Germany The upswing continues: After a brief downturn in 2009 and 2010, growth in the market for the mobile Internet rose sharply from 2011 to the present and has achieved mass-market penetration in Germany.

“Early Adopters”

“Handle Customer Portfolio”

“Bring followers on board”

Mass Market Capability

Market Entry

Mass Market Efficiency

Mass Market Penetration

% of Market Penetration

Market

Customer

Ideal course

Real and projected course

2008 2009 2010 2011 2012

Mobile Phones only 50% in Germany

Mobile phones, tablets, notebooks 58% in Germany

58%

17% 18% 13%

28%

This shows the development of mobile Internet usage via mobile phones from 2008 - 2012 in Germany

In 2012 in Germany, the use of the mobile Internet via mobile phones, tablets and notebooks was 58 percent

50%

Typical course

Conclusion

Figure 6. Accenture Analytics

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The Accenture Mobile Watch Survey, 2012, again underscores the need for companies in the mobile Internet business to focus on the basics first as the mobile Internet mass market becomes a reality. For communications service providers (CSPs), that would mean a greater emphasis on building their network and more bandwidth, and on investing to ensure better coverage and quality of service. As mobile Internet usage rises (in Germany alone, there are 30 million mobile Internet users), these improvements in infrastructure can help the CSPs build enduring relationships with customers and stay ahead of the competition in this intensely dynamic environment. These improvements in infrastructure can help them in building enduring relationships with customers and staying ahead in this intensely dynamic environment. The hyper-connected consumer—with unprecedented levels of computing power thanks to innovative devices such as smartphones and tablets—is an active participant in the market and not just a passive recipient of services.

The trend of multi-device Web access that the survey highlights presents a real opportunity for communications, media and technology companies to outperform the competition through differentiated, multi-device and multi-platform offerings. The possibilities associated with a “connected world” have already been demonstrated through the growing uptake of connected homes and over-the-top TV services. Broadcasters, technology companies and service providers need to brace themselves for a new generation of Web users looking for increased interoperability, multi-device and multi-platform support, and superior experience.

In this connected world that includes the network and services (Internet, entertainment, video and gaming), CSPs are taking on the role of enablers. To outperform as enablers, CSPs will need to get smarter about their customers and the way they market to them. Companies that have been successful in this role are differentiating by leveraging analytics to process the vast amounts of data that the consumer generates while using the Internet.

Additionally, as CSPs need to upgrade their infrastructure continuously to keep pace with customers demands as well as their data security concerns, a focus on maximizing cost-efficiency (whether through outsourcing of customer service or billing or through back-end integration) could help these companies balance costs as well as service levels.

As communications, media and technology players try to monetize the opportunities in the mobile Internet era (whether in the area of mobile payments, banking transactions, augmented reality services, cloud services or apps for tablets and smartphones), collaboration and innovation will anchor and sustain the new ecosystem. Collaboration with other service operators on network-sharing strategies could well be the key to balance consumers’ demand for quality with the inevitable high cost of infrastructure investments.

With the massive capital investments that will be needed to keep up with the increasing bandwidth, speed and quality demands, collaboration among all operators in the value chain will help in bringing innovative services to the market. Building collaboration tools, IT and common industry platforms to incubate and test new ideas could add significant value to offerings and quickly add capabilities that the operators currently lack. This will lead to new alliances and business models, efficient back-office and business processes as companies build faster go-to-market strategies and a strong focus on innovation to stay ahead of the competition. As mobile Internet approaches mass market stage, the various players in the ecosystem—from mobile service providers to content generators—will be compelled to explore avenues for innovation in providing end-to-end services.

This business imperative for change and innovation is also applicable to other industries such as retail or banking where the hyper-connected consumer’s behavior and needs are already transforming operating models and IT infrastructure. Such organizations are making use of mobile and cloud-based customer relationship management technologies to keep pace with the demand for new and improved capabilities as consumers increasingly use smartphones and tablets for online commercial transactions.

27

Si

Copyright © 2012 Accenture All rights reserved.

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About Accenture

Accenture is a global management consulting, technology services and outsourcing company, with more than 257,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$27.9 billion for the fiscal year ended Aug. 31, 2012. Its home page is www.accenture.com.

Contact Us:

Prof. Dr. Nikolaus MohrManaging DirectorComms, High Tech, Media & Entertainment.nikolaus.mohr@accenture.com

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