Social Media and the Power of Asian Consumers

© 2014 IBM Corporation
IBM Institute for Business Value
Social Media and the Power of Asian
Consumers
Rob van den Dam
Global Communications Industry Leader

IBM 2014 Global Telecommunications Consumer Survey
22,000 consumers
took part in the
survey in 35
countries, including:
 China (1265)
 India (1038)
 Indonesia (735)
 Japan (964)
 Malaysia (506)
 Philippines (877)
 Thailand (616)
2
2014
IBM Telecom Consumer Survey
China
(1265)
Australia
(652)
Canada
(594)
Belgium
(323)
Brazil
(671)
Denmark
(319)
Egypt
(343)
India
(1038)
Finland
(309)
Greece
(738)
France
(1343)
Germany
(831)
Indonesia
(735)
Ireland
(351)
Mexico
(658)
Italy
(560)
Malaysia
(506)
Japan
(964)
Kenya
(322)
Netherlands
(548)
New Zealand
(464)
Russia
(1003)
Nigeria
(550)
Poland
(328)
Norway
(303)
Philippines
(877)
Saudi
Arabia
(306)
South
Africa
(649)
UAE
(320)
Spain
(809)
Turkey
(533)
Sweden
(354)
Thailand
(616)
UK
(657)
US
(1083)

3
60%59%
39%37%
23%22%21%19%18%17%
13%11%10%10%8%7%5%5%4%4%2%
-1%-2%-3%-6%-7%-9%-10%
-14%-16%-16%-18%-18%
-39%
18%
Greece
Spain
Netherlands
Italy
Ireland
Belgium
Poland
Finland
France
Germany
JAPAN
UAE
Norway
UK
Canada
US
Sweden
MALAYSIA
PHILIPPINES
Denmark
Australia
NewZealand
THAILAND
SaudiArabia
SouthAfrica
Brazil
Rusia
INDONESIA
Egypt
Mexico
Turkey
CHINA
INDIA
Kenya
Nigeria
Net Decrease/Increase Consumer spending
MOBILE phone usage (voice calls, SMS, etc.)
(2014 – 2016)
Overall, consumers in Asian countries expect to increase spending on
mobile phone usage
Question: Compared to previous years, are you likely to spend less, the same or more on mobile phone usage (voice calls, SMS, MMS) in the next 2-3 years?

4
53%
50%
40%
36%
28%
22%22%20%20%19%
13%13%13%12%12%10%8%
6%5%5%5%3%2%0%
-2%-4%-4%-5%
-8%-8%-10%
-15%-15%-16%
-37%
This is also true for increasing spending on mobile broadband usage,
i.e. accessing the Internet using a mobile broadband subscription
Greece
Ireland
Italy
Netherlands
Belgium
Spain
Poland
PHILIPPINES
JAPAN
UAE
France
Germany
UK
US
Sweden
Finland
Canada
MALAYSIA
Norway
Australia
Mexico
Russia
Denmark
NewZealand
SaudiArabia
Brazil
SouthAfrica
Egypt
Turkey
INDONESIA
THAILAND
INDIA
CHINA
Nigeria
Kenya
Net Decrease/Increase Consumer spending
MOBILE BROADBAND usage (Internet from Mobile)
(2014 – 2016)
Question: Compared to previous years, are you likely to spend less, the same or more on mobile phone usage (voice calls, SMS, MMS) in the next 2-3 years?

5
24% 19% 57%
25% 18% 57%
25% 17% 57%
32% 19% 49%
49% 17% 34%
57% 18% 25%
74% 12% 14%
80% 11% 9%MOBILE PHONE
LAPTOP / NETBOOK
Desktop PC
TABLET
Internet-enabled TV
GAME CONSOLE with
Internet connection
eReader
OTHER (e.g. Internet-
enabled Blu ray player)
Very Valuable Moderately valuable Little valuable / Not applicable
How valuable is each of the following devices for you to access the Internet?
For accessing the Internet, the mobile phone has become the most
valuable device
95%
91%
87%
86%
86%
86%
Mobile Phone
Very Valuable
Question: How VALUABLE are the following devices for you to access the Internet?

People increasingly access the Internet to use social media, in
particular to communicate with others
6
100 Mio Users (Int)
300 Mio Users (China)
50 Mio concurrent
Users
1.2 Billion Users
255 Million Users
280 Million Users
230 Mio
Active Buyers
194 Million Users
450 Million users
250 Million Users
540 Mio active
users
430 Million
Users
300 Mio Users Int)
50 Mio Users (Japan)

Social Networking is the number 2 communication channel in
emerging markets; it’s even the preferred channel for under 25s
7
Question: How often do you use the following communications services?
Daily usage communication channels in emerging markets
in emerging markets
use Social Networks
daily to communicate
with others
74%
28%
25%
45%
26%
25%
36%
37%
50%
61%
65%
66%
74%
82%
30%
55%
58%
71%
66%
79%
76%EMAIL
SOCIAL NETWORKING
MOBILE MESSAGING
INSTANT MESSAGING / Chat
MOBILE VOICE calls
INTERNET VIDEO streaming/download
FIXED VOICE calls
MICRO-BLOGGING
VOIP (VOice over Internet)
VIDEO CALLING
All AGES
AGE < 25
1
1

In particular in the ASEAN countries, use of Social Networks to
communicate with others is high
8
55%
71%
76%
77%
79%EMAIL
SOCIAL NETWORKING
MOBILE MESSAGING
INTERNET VIDEO
60%
60%
76%
78%
83%MOBILE MESSAGING
SOCIAL NETWORKING
EMAIL
INTERNET VIDEO streaming
60%
61%
76%
78%
82%SOCIAL NETWORKING
MOBILE VOICE calls
EMAIL
INTERNET VIDEO
44%
71%
73%
79%
81%MOBILE MESSAGING
EMAIL
SOCIAL NETWORKING
MICRO-BLOGGING
1 Instant Messaging 84% (WeChat, etc) 4 Micro-blogging 70% (Sina Weibo, etc)
Daily usage communication channels
Question: How often do you use the following communications services?

9
3 9 %3 8 %
3 4 %3 2 %
2 8 %2 7%
2 2 %
0%
10%
20%
30%
40%
Indonesia
India
Philippines
Malaysia
Thailand
Japan
China
3 9 %3 8 %3 6 %
3 0 %
2 5%2 5%
19 %
0%
10%
20%
30%
40%
Philippines
Indonesia
Malaysia
India
Thailand
Japan
China
12%
57%
31%
Reduce(d)Increase(d)
No Change
15%
52%
34%
Reduce(d)Increase(d)
No Change
Reduction
SMS usage
Reduction
traditional
voice calling
of respondents said they
have reduced – or will reduce
– SMS usage by increasingly
using alternative messaging
channels
34%
of respondents said they
have reduced – or will reduce
– traditional voice calling
by increasingly using
alternative voice channels
31%
GloballyGlobally
One third of respondents said they decreased – or will decrease -
spending on traditional communication > growth Telcos under pressure
To what extent have you reduced – or will you reduced SMS usage and traditional voice calling by increasingly using alternative channels?
Global Global

At the other hand, global OTT and Internet category players thrive
10
2004 data as of 9/17/2004. 2013 Market value as of 12/19/2013. 2012 Revenue is TTM.
List excludes Alibaba ($75B), whose private market value would put it in the Top 10.
List also excludes Skype (bought by MSFT in 2011 for $8.5B), YouTube (reported as part of Google) and Paypal (reported as part of eBay)
2012/13 2004
OTT and Internet category players
 The market
value of the
Top 15 equals
that of the
Top 100
publicly-
traded CSPs
 The top 5
have more
than $115B of
cash on their
balance
sheets

11
in emerging markets
access Social Media
to evaluate telecom
providers and their
products /services
69%
9%
20%
25%
28%
34%
48%
60%
69%
72%
23%
19%
13%
31%
56%
33%
69%
Internet SEARCH
SOCIAL MEDIA
RECOMMENDATIONS friends/family
Telco WEB sites
Telco EMAILS & promotional offers
Traditional ADVERTISING
Retail STORES
Shopping PORTALS/auctions
Emerging Markets
Mature Markets
Sources of information on telecom providers and their products/services
The web, social media and word-of-mouth now dominate the traditional
channels for information relating to Telcos and their products/services
Question: What are your preferred sources of information when you are evaluating telecom providers and their products/services?

Social Media as a source of information is in particular popular in the
under 25 age group
Sources of information for under 25s
Question: What are your preferred sources of information when you are evaluating telecom providers and their products/services?12

Word-of-mouth is important as it has become a key factor in
condidering a provider for products and services
13
15%
21%
22%
22%
43%
46%
51%
52%BEFORE BUYING when the provider provides information
When contacting my provider for RESOLVING AN ISSUE
BEFORE CONSIDERING the telecom provider
(REPUTATION)
On first purchase or BEGINNING OF SERVICE
When my provider PROACTIVELY ask for my experience
When I CONSIDER SWITCHING to a competitor
On receiving FIRST INVOICE
Close to the END OF SUBSCRIPTION period
3
67%
53%
60%
57%
57%
51%
1
1
2
2
2
3
3 28%
Key moments of interaction that matter
Question: What are the key moments in interacting with your telecom provider that matters to your?
Global Reputation

Negative word-of-mouth can have a strong negative impact on a
telco’s reputation and, consequently, its business performance
14
10% 49% 42%
13% 62% 25%
20% 46% 35%
21% 46% 32%
25% 57% 18%
26% 59% 15%
29% 50% 21%
38% 55% 8%
40% 50% 9%
41% 49% 9%START considering COMPETITIVE services from other providers
Would TELL OTHERS about the bad experience
Would COMPLAIN to my telecom provider
Would DISCOURAGE OTHERS to use this provider
Would use the services of my provider LESS FREQUENTLY
Would STOP making PURCHASING from my provider
Would post a NEGATIVE REVIEW or comment ONLINE
Would COMPLAIN on SOCIAL MEDIA
Would NEVER USE my telecom provider again
NO CHANGE in behavior
Always/Often Regularly/Possibly/Sometimes Never
Customer responses in case of negative experiences
Question: What would you do in case of a NEGATIVE experience with your telecom provider?
Global

15
58%
53%
34% 35%
56% 55%
37%
28%
55%
39% 39%
31%
54%
50%
34%
25%
40%
45%
34%
38%
0%
10%
20%
30%
40%
50%
60%
70%
Have to wait too long
in queue to speak to
Call Centre
Too much hassle to
get through to the
Call Centre
Don't believe it make
any difference
My Provider is
unable to resolve my
problems
Philippines Indonesia Malaysia Thailand China
Always/often
complaining to
provider
32%
22%
23%
9%
24%
Reasons of not complaining in case of negative experience
Question: If you not complain to your provider in case of a negative experience, what is the reason?
Telcos are not always aware that consumers have bad experiences:
less than half of consumers always/often contact them in those cases

Telcos should become more proactive in understanding services issues
by trolling social networks to understand sources of dissatisfaction
16
O2's Twitter team
demonstrate their
social media moves
on angry tweeters
London, July2012
O2 UK experienced widespread network
problems affecting hundreds of
thousands of its customers in July 2012,
user anger was boiling over, with many
customers expressing their
dissatisfaction on Twitter. O2, however,
turned the tides, by using Twitter to
deliver fast, professional customer
response and was able to maintain their
brand image by adding humor and
personality to their tweets
Having the official verified Twitter
profile @Airtel_Presence, Airtel scan
for every tweet containing the word
“airtel” in it and giving appropriate
replies to customers and solving their
issues.
Airtel uses social network analysis to
determine customers’ facing problems.
Any mention on social media
(Facebook, Orkut, Twitter, etc.) is
captured and they get in touch with the
customer to get issues resolved.

Word-of-mouth can also help a telco increase brand strength in case
of a positive experience, but what do customers perceive as positive?
17
15%
19%
31%
32%
33%
41%
44%
50%
57%
77%Providing high quality COMPELLING products/services
Giving QUICK effective responses to questions/issues
Resolving issues FAIRLY
LOW PRICES even at the cost of quality/service
Giving EXCLUSIVE offers (loyalty program)
Providing TRANSPARENCY & openness
ENABLING CUSTOMIZATION of products/services
PERSONALIZED & consistent service
PROACTIVELY trying to improve user experience
SEEKING OPINION to develop product/services
Always/often
recommend provider
54%
45%
43%
28%
46%
Positive experiences that make a customer loyal
Global
Question: What are the most important experiences for you to STAY LOYAL to your telecom provider?

18
Groups
Individuals
Reactive Proactive
Mine
Conversations
Crowdsource
Insights
Reply to
Questions
Influence
Influencers
Today Next two years
Respond to
customer questions
Solicit customer
reviews and opinions
Capture
customer data
Identify and manage
key influencers
79%
79%
47%
68%
47%
68%
35%
59%
Applying social approaches to ‘listen & engage’ customers
(±2/3 of telco respondents in Social Business survey)
Source: Institute for Business Value, 2012 Business of Social Business Study
(% CSPs with customer-related social business activities)
Generating positive word-of-mouth, or better ‘influence the influencers’,
is a clear ambition for many telcos to increase brand strength

Another clear ambition is close collaboration with customers: nine out
of ten Telecom CxOs foresee doing so in the near future
19
132%more
88%
38%
88%
3–5 Years
38%
Today
Source IBM 213 Global C-suite study (218 telecom CxOs) –How strong is your collaboration with customers?;
“We focus on increased
collaboration with the customer to
understand their needs and
expectation.”
CMO, Telecommunications, Turkey
Telecommunications CxOs plan to collaborate
much more extensively with customers

20
of respondents like to
interact with their
provider on improving
an existing product
60%
60%
56%
38%
26%
22%
22%
21%
6%
IMPROVEMENT EXISTING Product/Service
IMPROVEMENT CUSTOMER CARE
DEVELOPMENT NEW Product/Service
FEEDBACK on COMMUNICATION to market
FEEDBACK on Overall STRATEGY
IMPROVEMENT of Existing CAMPAIGN
DEVELOPMENT of New CAMPAIGN
Other
98%
97%
97%
97%
95%
93%
66%
And the good news is that almost all respondents said they are willing
to provide feedback or engage to help them to improve and/or innovate
Topics customers are willing to communicate on with their provider
% of respondents
willing to provide
feedback or input
Global
On which topics do you want to provide feedback or communicate with your Telecom Provider to help the organization to improve?

China Telecommunication Corp created an innovation platform to
connect employees, partners and customers
21
Challenges:
Build on knowledge and experience to
innovative and create solutions faster
Anticipate & analyze future needs
such as addition of third generation
(3G) licensing
Bring distributed work groups together
through a unified communication
system
Results:
Enabled marketing teams to analyze new
intelligence gathered directly from consumers’ and
launch new services using insight on that subscriber
Reduced opportunity costs and risk by expanding
sources for new product ideas and by improving
idea quality, increasing the chance of marketing
success
Allowed 554 new “voices” into the development
process during the first six months of the platform
launch, with the publication of the first idea a mere ten
minutes after launch
“The solution enables us to deliver exciting products to
the marketplace at a faster pace than ever before.”
—Niu Gang, Associate Director, Shanghai Research Institute, CT

However, most telcos don’t use social in an effective way to engage
customers or enable them to provide feedback/input
22
19% 16% 16% 14% 14%
8%
2%
25%
35% 33%
42%
38%
41%
16%
Strongly Agree Moderately Agree
Agree/Disagree:
My telecom provider uses Social Media in an effective way to engage with me
Chat Me, Tweet Me, Call Me.
Consumers want choice for
contacting their telecom provider
Question: Indicate to which agree/disagree with the following statements on your Primary Telecom provider?

23
Percentage underprepared
for Social Business
85%
66%
55%
Lack of a cohesive
social media plan
Lack of appropriate
technology
Legal and security
concerns
Lack of leadership
support
Concerns about
inappropriate use
Competing priorities
or initiatives
Difficulty measuring
investment returns
64%
34%
39%
25%
15%
52%
59%
Underprepared
for the
necessary
cultural changes
Unsure about
impact of social
business over
next three years
Limited
understanding of
the business value
we intend to obtain
Challenges Telecom CxOs to
implementing a digital strategy
Lack of a cohesive social media plan and problems with measuring
ROI are the two biggest barriers to doing more in the digital space
Source IBM 213 Global C-suite study (218 telecom CxOs) –How strong is your collaboration with customers?;

Questions
24
• What plans have you developed - as a response to OTT’s cheaper
alternatives - to contain ARPU erosion?
• What approaches is your organization using to listen to, engage with
and influence customers?
• How do your marketing, sales, and customer service functions
coordinate around your social initiatives?
• What are your plans to make it easier for customers to interact with
your call centers?
• How could you better involve customers in your innovation efforts?
• Do you exploit social network analytics to understand how your
customers perceive your product and services?

25
Thank you
Rob van den Dam
Global Communications Industry
Leader
rob_vandendam@nl.ibm.com
www.ibm.com/iibv

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