United Fun Traders is a holding company that markets mobile products and VAS services internationally. It includes i-Free, a leading VAS provider in Russia/CIS, HeroCraft, a top games developer, and FounDreams, a multimedia content studio. UFT performs international sales and marketing for these companies. It has direct billing connectivity in several countries and markets their content through operator portals and own D2C channels. UFT plans to expand its geographic reach and implement innovative sales schemes like in-game purchases.
3. Russia: mobile market size and developments
Subscribers base
Russian mobile market has grown
dramatically in 2002-2005. Now it’s
equal to Europe in terms of services
and quality. Penetration is more than
100% and was approached during 2
years.
Now penetration is stable and it’s
about 130% in the whole country
(Moscow ~190%, St. Petersburg
~170%, regions ~120%). Territory / Penetration (2008)
In future subscribers base won’t grow
any more. All new sales made by
customers who decided to change
their operator.
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4. Russia: mobile market size and developments
Revenue and ARPU Quarter increase / decrease
It’s the first time from the beginning of mobile market revenues will decrease in 2009.
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5. Russia: mobile market size and developments
Biggest operators – subscribers (2008)
The “Big Three” operators so called
federals (MTS, Vympelcom and
Megafon),control more than 80% of
the market and about 90% of
revenue in Russia.
There are big regional players:
Теле2, mobile branches of
Svyazinvest.
One of the biggest local companies
in past, SMARTS, as well as CDMA Biggest operators – revenues (2008)
2000 operator Skylink, lose their
positions under “Big Three”
pressure.
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6. Russia: mobile market size and developments
“The Big Three” revenues
«The Big Three» – key indicators
We can see a trend for all of them to be
almost equal in terms of subscribers
base / revenues, despite of the fact that
Megafon’s revenue 5 years ago was 3
times less than MTS and 2 times less
than Vympelcom
“The Big Three”’s subscribers base
“The Big Three” ARPUs
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7. Russian mobile market today
The most important trends 2008-2009:
• Operators try to develop their own retail chains:
– Existing chains acquisitions («Euroset», «Eldorado»,
«Telefon.ru»)
– Strategic alliances between operators and retail companies («Svyaznoy» -
MTS)
– Own retail development
• Fixed/Mobile operators convergence («Vympelcom»-Golden Telecom, MTS-
«Comstar OTS»).
• Mobile operators build their own main telecommunication networks.
• International expansion (CIS, India, Asia Pacific).
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8. Russian mobile market today
Differences between Russian and European markets:
• Poor system complicates connection between mobile/banking
accounts. This has negative affect to loyalty programs development and
micro credicts.
• Due to a poor market segmentation, there are no MVNOs in fact.
However, this market opportunity allows users to choose better service
and prices in future.
• Regulation is not that tough as in Europe. There are no roaming rules or
mandatory MVNO creation etc.
• The market itself still grow. Europe is “stagnate” nowadays.
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9. VAS market in Russia
VAS market in 2006-2007 was growing almost equally to the mobile market itself: ~40% a year. Now it
keeps grow speed, however became more in whole revenue structure due to basic services share
decrease. Now VAS share is 14,3%. The whole VAS market value reached $3,9 bln.
VAS market growth ($) VAS market growth (RUR)
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10. VAS market in Russia
VAS revenues structure – services (2007)
The fastest grown VAS market
segment is mobile internet. It’s
grown for almost 58% up to $938
mln. User base is about 32 mln
people.
Mobile access makes revenues
either itself or it helps content
services to grow as well. They
reached $893 mln which is 53% VAS revenue structure – services (2008)
more than in 2007.
About half of VAS revenues
came from peer-to-peer
messages, mostly SMS.
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11. VAS market in Russia
VAS revenue structure – operators (2007)
The leading operator in VAS for
the last 2 years is MTS because of
clear strategy and efficient
partnership with different players.
Key segment here is content which
generates about 40% of revenue.
Vympelcom, who lost its positions in
2007, still shows decrease in all VAS revenue structure – operators (2008)
segments. Now it’s the 3rd after MTS
and Megafon.
Megafon, who’s the main competitor
for MTS in VAS, shows high growth
speed in data transfer and operator-
focused VAS (mostly RBT).
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13. Content market in Russia
In 2008 Russian on-portal market value reached $330 mln. Growth speed slightly, slows down, however is
still high enough. It’s about 70% in 2008 (to compare, in 2007 was more than 150%).
On-Portal services market value On-Portal market structure
Since 2007, the biggest part of on-portal sales comes from Ring Back Tones. They brought more than 50%
of revenues in 2008.
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14. Content market in Russia
RBT came to the market in 2005. Since that time, the service became commercially successful. It has
more than 15 mln subscribers who purchased more than 35 mln melodies during 2008.
RBT users RBT revenue
RBT is one of the highest growth services on Russian content market: 134% in 2008 which is up to $165
mln.
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15. Content market in Russia
Due to on-portal sales stabilization, European and US operators are seeking partnership with off-oprtal
players. However, up to ¾ of whole revenues still comes from operators portals. In opposite, in Russia off-
portal sales are the main part of whole content sales (excluding traffic charges).
Off-Portal sales Off-Portal revenue structure
2007-2008 were years of micropayments (mostly service charges and content charges in mobile/fixed
Internet). There is high potential in “legal” mobile commerce, new technologies (i.e. LBS) as well as
mobile/fixed Internet convergence.
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16. Content market in Russia
Micropayments market growth
In 2008 micropayments market was
at least $190-200 mln. (9 times
growth if compare to 2007). And it still
has very high potential.
During 2007-2008 some kind of
hierarchy was created: each operator
works with several high-level
aggregators. These companies co-
operate with several micropayments
service providers as well as directly
with content or service companies.
Top-15 aggregated revenue is $97,4 mln or 50% of the whole micropayments market value. Total amount
of players here is about 50.
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17. Content market in Russia
85% of revenues come from the biggest aggregators. Each aggregator is close to one of “The Big Three”
operators. Off-portal market is high competitive. It’s 80% distributed amongst 30 content providers.
ТОП-10 Russian content providers and aggregators
Despite of serious structural off-portal market changes, top list is the same for the last 2-3 years. Each
company works in different segments and react adequately to the market weather.
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18. i-Free
i-Free is an international innovation-driven company, developing and marketing mobile technology products. i-Free
has consistently remained among Russia’s and CIS market leaders and trendsetters in mobile services and
content ever since it was established in 2001. The company currently serves more than 57 million individual users.
Headquartered in St. Petersburg, i-Free has offices in Moscow, Mumbai (India), Sao Paolo (Brazil), Beijing
(China), Kyiv (Ukraine) and Almaty (Kazakhstan). i-Free products and services are available in 83 countries.
i-Free serves a broad spectrum of industries and businesses, providing innovation solutions for financial markets,
electronic and mobile commerce, mobile content services, the FMCG market, mass media, and other sectors.
Main activities:
Content design and distribution (video, images, music,
Java and BREW games)
Development and marketing of communication solutions,
SNS and communities
Infotainment services
Development of On-Device Portals (J2ME, BREW)
Mobile marketing and integrated media projects
Production and aggregation of mobile video content for 3G
networks
Mobile-CRM
Mobile-Banking
Mobile-Vending
Mobile-Payments
19. i-Free group at a glance
Was founded in 2001 with headquarters in Saint-Petersburg
About 350 employees in Russia, Ukraine, Kazakhstan, Brazil, India, China,
Mexico
More than 54 mln unique customers
More than 30 mln requests daily
1st place in Vympelcom rating (2008, 2007, 2005, 2004), 2nd place in MTS
(4thq 2007), 2nd place in North West Megafon (2007), 3rd place in Megafon
(2007, 2006), 2nd place Megafon (1st q2008)
i-Free services are available in 12 countries.
20. Side projects and strategic partners
Sales/ Games/ Content Market IT-solutions WEB- Payment
Projects Development creation Analysis projects systems
21. United Fun Traders company (UFT) is part of the corporation holding
leading positions in the Eastern European mobile telecom market. UFT
business activities are targeted to the Russia/CIS/international markets
with the main goal of marketing and distribution of own-developed and
licensed products/services globally.
The corporation also includes:
• I-Free: leading service provider in Russia/CIS, specialized in development,
aggregation and distribution of mobile products and VAS services.
• Herocraft: the biggest Russian producer of top-quality J2ME games with
successful D2C and B2B distribution world-wide.
• Foundreams: design and development studio specialized in multimedia content
and services, targeted primarily on innovative video/graphic products for 3G
mobile networks.
Holding exclusive first-hand IP rights and full feedback control of production and
development, UFT performs as international front-office for corporate sales and
marketing internationally.
22. 3 sides of VAS market: UFT is the holistic solution
i-Free HeroCraft FounDreams
Billing/Content/Portal Applications development/Portal Multimedia content creation and
development development/Marketing deployment
Leading VAS provider in CIS/Russia Leading J2ME/WinMobile/Symbian/Palm Multimedia specialists
games developer in Eastern Europe
Direct billing connectivity with top rev Portfolio of more than 60 Full range of products in pics,
share to operators in Russia, Ukraine, branded/casual high quality games animations, video, themes, etc
Kazakhstan, Belarus
Aggregated local and foreign Own D2C channel with more than 120 Catalogue of more than 3000 content
(including branded) content connections worldwide items
D2C channels (print media, wap- A lots of awards and prizes in different Own production base
portals, TV, Operators’ decks) nominations
Maintains portals: TELE2 Russia, MTS High-scoring, community games, in- IP rights owner
Women, Svyaznoy, NTK, Samsung game purchase possibility in all new
Fun Club Russia/CIS) games
UNITED FUN TRADERS
Connectivity/ Billing Content D2C / B2B experience
Russia, CIS, Eastern Europe, Mexico, Local content aggregated in all TELE2 Croatia, Estonia portal, Telcel
Brazil, India, China mentioned areas portal presence, Brazil portals
presence, community service
Jamango launched on portals in India
23. Russia / CIS / Europe
#1‐3 in revenue (depends on the operator),
Strong D2C and B2B presence,
Direct billing and connectivity in Russia, Ukraine, Belarus,
Kazakhstan, etc (different price points for various types of content,
Own D2C channels (printed media, wap‐portals, 3rd party wap‐
portals management and content provision),
Mobile Social Network Jamango launched 3 years ago. About 2
mln subscribers for now,
Local content aggregated, deals with all rights holders,
Strong marketing experience,
Outstanding technical background (i‐Free manages Samsung Fun
Club in Russia/Ukraine)
Future plans
•Innovative sales schemes (community development, wap‐portal enhancement,
on‐device‐portal development, in‐game purchase model),
•WAP‐advertisement (own channels, community Jamango),
•Ad‐supported games model,
•New media application advertisement (J2ME‐magazines, mobile leaflets),
•Territorial presence expansion.
25. Mexico
•Direct connectivity/Billing: Telcel, Movistar (Telefonica) – 100% coverage,
•Our content is available on Telcel portal,
•Off-deck games/multimedia portal is launched,
•Local content to be aggregated,
•Local representative available.
Future plans
•To develop in‐house content especially for Mexico,
•Own off‐deck portal enhancement,
•Strong promotion of Mexican portal,
•To aggregate more local content (various types).
26. China, Brazil
China Brazil
•Operator portal presence: China Mobile, •Connectivity/Billing: TIM Brasil White Label, Oi,
Brasil Telecom, Claro, CTBC connectivity,
games
Sercomtel (different price points for various
•Strong local partnership + office, types of content),
•Free games with in‐game micropayments •Local content aggregated,
launched (connectivity/billing available). •Off‐portal wap‐site launched.
Future plans Future plans
•Further games localization, •Connectivity/Billing expansion,
•Innovative sales schemes •Innovative sales schemes
implementation, implementation,
•On‐Portal presence expansion. •On‐Portal presence expansion.