Liberation from Location: Ericsson ConsumerLab Insight Report, Latin America edition

CONSUMERLAB

An Ericsson Consumer Insight Summary Report April 2015

Regional report Latin America

Liberation from location

METHODOLOGYThe data presented in this report was gathered from a total of 9,812 face-to-face interviews and 1,027 online interviews conducted in 2014 across 6 countries in Latin America: Argentina, Bolivia, Uruguay, Brazil, El Salvador and Mexico. Interviews were conducted with consumers aged 15–69 years old. Overall, the data represents 189 million people living in Latin America.

2 ERICSSON CONSUMERLAB LIBERATION FROM LOCATION LATIN AMERICA

Ericsson ConsumerLab has 20 years’ experience of studying people’s behaviors and values, including the way they act and think about ICT products and services. Ericsson ConsumerLab provides unique insights on market and consumer trends.

Ericsson ConsumerLab gains its knowledge through a global consumer research program based on interviews with 100,000 individuals each year, in more than 40 countries and 15 megacities – statistically representing the views of 1.1 billion people.

contents FROM DUSK ’TIL DAWN 3

LOCATION EQUATION 4

THE GENERATION GAME 6

SHIFTING EXPERIENCES 7

SITUATION DETERMINES SERVICE 8

DAILY DOSE 9

COMMUNICATION CHOICES 10

SATISFACTION TRACKER 11

Both quantitative and qualitative methods are used, and hundreds of hours are spent with consumers from different cultures. To be close to the market and consumers, Ericsson ConsumerLab has analysts in all regions where Ericsson is present, developing a thorough global understanding of the ICT market and business models.

All reports can be found at: www.ericsson.com/consumerlab

the voice of the consumer

MEXICO

EL SALVADOR

BOLIVIA

BRAZIL

URUGUAY

ARGENTINA

Key findings

ERICSSON CONSUMERLAB LIBERATION FROM LOCATION LATIN AMERICA 3

Consumers enjoy a more seamless connectivity experience when indoors, but this ability drops drastically when outdoors

> 29 percent are satisfied with streaming while indoors, but only 15 percent while outdoors

Newer means of communication are emerging for consumers with internet-enabled mobile phones

> 57 percent of consumers who send messages on a daily basis use instant messaging

> 24 percent of consumers who make calls on a daily basis use Voice over Internet Protocol (VoIP)

In Latin America, consumers have an almost equal preference for PCs and smartphones for accessing internet services

> With the increasing penetration of smartphones and better connectivity, smartphone usage will continue to grow

Once consumers start to use any type of internet connection, they are likely to want to upgrade or improve on it

> 20 percent of 2G consumers want to upgrade 4G. This number rises to 35 percent for 3G customers

Consumers’ willingness to perform online activities outdoors increases as the connectivity experience improves

> Around 30 percent of 4G users access social networking sites outdoors, while less than 20 percent of 2G users do the same

Network satisfaction influences overall satisfaction in the region

> People are more particular about the quality of their data connection than their voice connection, and value for money is driven by network satisfaction

FROM DUSK ’TIL DAWN

Communication is a quintessential need. We meet it by being accessible to our friends, family and extended community in person and more often nowadays, online. Being able to make decisions on-the-go using relevant content that is accessible anytime, anywhere has

assumed paramount importance among consumers. This Ericsson ConsumerLab Latin America study highlights the connectivity expectations of consumers as they go about their lives.

DECISIONS ON-THE-GO are important to consumers


Our global study of 23 countries established that consumers spend 85 percent of their time each day in an indoor location. Therefore large parts of their device and connectivity experiences are likely to be influenced by this location. Globally, consumers have shown greater satisfaction with their indoor connectivity experience when accessing online services. This is especially true for streaming videos and watching TV or movies.

These findings are applicable to the Latin America region as well, with consumers rating indoor connectivity experience higher than outdoors. Satisfaction levels for the connectivity experience go up when performing both high and low data-intensive activities indoors. Figure 1 shows that when watching videos or films online, about 29 percent of consumers rated their connectivity experience as satisfactory for the indoors, compared to 15 percent for the outdoors.

SATISFACTION WITH CONNECTIVITY

Source: Ericsson ConsumerLab, Liberation from location, Latin America 2015Base: Users of respective services

Figure 1. Indoor vs. outdoor connectivity experience

OUTDOOR EXPERIENCE

STREAMING VIDEO, TV

OR MOVIES

STREAMING VIDEO, TV

OR MOVIES

BROWSING AND ACCESSING SOCIAL MEDIA

NETWORKS

BROWSING AND ACCESSING SOCIAL MEDIA

NETWORKS

29% 15% 27% 15%

INDOOR EXPERIENCE

LOCATION EQUATION

CONNECTIVITY IS BETTER INDOORS THAN OUTDOORS

Source: Ericsson ConsumerLab, Liberation from location, Latin America 2015Base: Users of the internet on mobile/smartphones

Source: Ericsson ConsumerLab, Liberation from location, Latin America 2015Base: Internet users


People value seamless experiences when using online services. Among weekly users of the internet, a larger proportion of consumers perform their preferred activities seamlessly across any device when indoors than when outdoors (Figure 2). Also, the preferred activities when indoors are different from those outdoors. 81 percent of weekly users of the internet engage in browsing on any device when indoors. Browsing is not among the most preferred activities when outdoors and is replaced by listening to music.

Only 32 percent of consumers use the internet across any device to listen to music.

When outdoors, a large percentage of consumers use mobile/smartphones. In Latin America, outdoor usage of these devices is very high. Of those who access the internet on their phone, 47 percent send/receive messages and listen to music several times a week when outdoors. This shows that digital activities are not confined to indoor locations and mobile/smartphones are enabling consumers to perform more tasks outdoors.

Figure 2. Most common activities performed across devices by weekly internet users

CALLS

MESSAGING

BROWSING

MESSAGING

CALLS

MUSIC

ACTIVITY ON ANY DEVICE

Figure 3. Usage of mobile/smartphones for different activities

84%

32%

35%

40%

84%

81%

MOBILE/ SMARTPHONE

INDOOROUTDOOR

Figure 4. Different modes of telephone calls and messaging services

Source: Ericsson ConsumerLab, Liberation from location, Latin America 2015Base: Mobile phone users who send any type of message on a daily basis, six countries

Source: Ericsson ConsumerLab, Liberation from location, Latin America 2015Base: Mobile phone users who make any type of calls on a daily basis, six countries

Making calls and sending messages are among the top activities performed across different locations. As the Latin American market plays catch up with more mature economies in terms of device availability and usage, it is adapting to newer means of communication. Mobile phone calls are slowly making way for calls over the internet (VoIP), and SMS is being used alongside

instant messaging (IM) among daily users of the internet. Figure 4 shows that VoIP is finding takers in Latin America, with 24 percent of consumers using it. Even though SMS is still the most common way to send messages, newer forms of messaging such as IM are being preferred by consumers, with 57 percent using this option.

ONLY VOIP ONLY IMONLY CALLS ONLY SMS

76% 42%

CALLS AND VOIP SMS AND IM

4% 6%20% 51%

Calls Messaging

47%MESSAGING

47%MUSIC

41%CALLS

Popularity among young population is higher than average


Although consumers in the region have a better experience indoors, what has emerged both in the global and Latin America studies is the penchant of the youth (15–29 years) to use more online services

outdoors than the overall population. Figure 5 shows that among internet users in the 6 countries, the youth favor the outdoors when performing activities like browsing the internet, social networking and gaming.

From Figure 6 it becomes clear that consumers of over-the-top (OTT) internet services such as IM services like WhatsApp and video services like YouTube, are mostly young. Around 70 percent of consumers in the age groups 15–24 years and 25–29 years are users of OTT services, while the OTT penetration for the overall population remains at 57 percent.

Also, the youth are more willing to pay extra to improve their outdoor connectivity experience than any other age group. For example, around 70 percent of users aged 15–24 are willing to spend on improving outdoor connectivity, compared to around 40 percent of those aged 50–59.

THE GENERATION GAME

Figure 5. Overall representation of young users (15–29 years) compared to the overall population for each internet based activity

Figure 6. OTT users by age

OUT AND ABOUT

WHILE COMMUTING

MUSIC

WORK/ SCHOOL

GAMING

HOME

SOCIAL NETWORKING

CALLS ONLINE SHOPPING

VIDEO WORK/STUDY RELATED

MESSAGING INTERNET BROWSING

Popularity among young population is lower than or just about average

Source: Ericsson ConsumerLab, Liberation from location, Latin America 2015Base: Internet users

Source: Ericsson ConsumerLab, Liberation from location, Latin America 2015Base: Overall users, six countries

15–24 25–29 30–39 40–49 50–59 60+

70

50

30

10

80

60

40

20

20%16%


Shifting experiencesGood connectivity also determines whether or not consumers use internet-based services or mobile voice calls and text messaging services. Our study shows that across age groups, consumer willingness to perform online activities increases as the connectivity experience shifts from 2G to 4G. While the proportion of consumers doing basic activities such as calls and messaging

is similar between 3G and 4G, there are more 4G consumers who perform data-intensive activities than 2G or 3G users. As Figure 7 indicates, there is a greater willingness to use the internet to perform any activity when a better technology experience is available. When outdoors, only 10 percent of 2G or 3G users engage in gaming, while 16 percent of 4G users do the same.

Also, as Figure 8 indicates, the better the experience with an existing internet subscription, the more likely a consumer is to upgrade to the next technology. For instance, among current 2G users, only 20 percent show an inclination to upgrade to 4G, however those with 3G connections show more willingness to upgrade to 4G at 35 percent.

Figure 7. Outdoor usage of mobile services

UPGRADE TO 4G

UPGRADE TO 3G

PLANNING TO CHANGE NETWORK CONNECTION/PLAN

Figure 8. Intention to upgrade to new technology or network plan

EXISTING 2G USERS

EXISTING 3G USERS

35%

13%

20%

Source: Ericsson ConsumerLab, Liberation from location, Latin America 2015Base: Users of respective generations of mobile internet

40%

30%

20%

10%

60%

50%

4G 3G 2G

MUSIC GAMINGSOCIAL NETWORKING


VIDEOWORK/STUDY RELATED


Source: Ericsson ConsumerLab, Liberation from location, Latin America 2015Base: Internet users of respective generations of mobile internet

Consumers choose what type of service they want to access on their devices according to the situation they are in. 16 percent say they wish to access personal security services more than any other service while out and about. This indicates a level of concern with security while they are outdoors.

Consumers also stay connected to online communities and use various services throughout the day to meet different requirements. 34 percent of consumers seek out contacts online even when they are out socializing with friends or family members.

Surprisingly, consumers do not seem inclined to use easy and safe payment options while traveling or commuting. Only 7 percent said they would prefer to use easy payments services while traveling.

26 percent of consumers in Latin America find it very useful to be able to access their files and documents while they are working or studying. This is closely followed by 19 percent of consumers who wish to connect with peers while working or studying.

It is also very common for consumers to want to use their devices to stay updated irrespective of the situation. Getting relevant information and updates is among the top three services used in all situations.

About 15 percent are interested in using their mobile phones or tablets to contact security services, such as the police, to report an accident or crime when they are outdoors or commuting.


SITUATION DETERMINES SERVICE

26%want to access their files and documents while working or studying

Easy, safe and fast payment options

Getting relevant information and updates

Being able to access files, documents and content

Connect with others online

Personal security services

Figure 9. Services consumers want to engage in on their mobile devices in different situations

Source: Ericsson ConsumerLab, Liberation from location, Latin America 2015Base: Any internet user accessing the respective service on a mobile phone or tablet

SHOPPING (NOT ONLINE)

10%

20%

30%

40%

SOCIALIZING WITH FRIENDS OR FAMILY (FACE-TO-FACE)

COMMUTING OR TRAVELING WORKING OR STUDYING WHILE OUT AND ABOUT

77%

As the location where we use our devices to access online services becomes inconsequential, our preference for what online activities to perform on what devices becomes clearer. Certain online activities find more takers among the local population on a daily basis than others. For instance consumers show high preference for browsing the internet, social networking, IM and emails on a daily basis, across any kind of device.

Figure 10 shows that consumers’ use of PCs (desktops and laptops) and mobile/smartphones depends on the activities they perform. Mobile/smartphones are almost as popular as PCs in the region, especially when browsing the internet, social networking and gaming. Tablet usage is yet to pick up in Latin America.


Figure 10: Activities performed across different devices (mobile/smartphone, PC and tablet)

DAILY DOSE

Source: Ericsson ConsumerLab, Liberation from location, Latin America 2015Base: Users of mobile phones, PCs and tablets, respectively

device choice depends on what activity is being performed

52% 46%21% 65% 60%38% 80% 43%

MUSIC GAMINGSOCIAL NETWORKING


VIDEOWORK/STUDY RELATED


MOBILE/SMARTPHONE

PC

TABLET

62% 45% 22%91% 34% 23%90% 57% 62%

44% 33% 31%15% 23% 17%23% 45% 27%


The frequency of use of different mobile devices to access internet services varies across countries. In Latin America, although device usage varies with the type of activity performed, consumers show an almost equal preference for laptops/desktops and mobiles/smartphones when it comes to daily internet usage. In contrast, consumers in Europe have clear preferences when it comes to daily usage of the internet on different devices.

Figure 11 shows that Mexicans tend to use mobiles/smartphones more often (61 percent), while Brazilians use PCs (55 percent) more to access the internet. At 61 percent, Argentina has an equal proportion of consumers accessing the internet on their PCs and mobile/smartphones. Tablet usage is low across the region, but Brazil and Mexico have the largest proportion of consumers who use tablets to go online daily at 19 percent and 18 percent, respectively.

COMMUNICATION CHOICES

equal preference for PCs and mobile/smartphones for daily internet use

Figure 11. Frequency of internet use per device and country, users who access the internet at least daily

40%

30%

50%

60%

70%

20%

10%

PC Mobile phone Tablet

ARGENTINA BOLIVIA BRAZIL EL SALVADOR MEXICO URUGUAY OVERALL

Source: Ericsson ConsumerLab, Liberation from location, Latin America 2015Base: Consumers aged 15-69

20%

19%

18%

15%

13%

8%7%

47% 53%


NETWORK SATISFACTION

SERVICE SATISFACTION

OVERALL SATISFACTION

VALUE FOR MONEY

44%56%

SATISFACTION TRACKER

Overall, Latin America is quickening its pace of adoption of devices and usage of online services. Consumers in the region are clear in their preferences for internet-enabled devices, with an almost equal usage of desktops/laptops and smartphones. Tablet use is picking up in the region. As usage of tradtional means of calling and messaging declines people show a willingness to adapt to newer forms of communication such as VoIP and IM. Consumers also show a greater willingness to invest in improving their connectivity.

In Latin America, network satisfaction is crucial to the overall satisfaction and realization of the value for money proposition among consumers. This in turn is heavily influenced by quality of data connection. It has to be noted that along with other factors, such as the rise in smartphone usage, the willingness of the youth to utilize technology to stay connected and the spread of 4G, customer service is also very important for these consumers, especially for new users of the internet on a mobile phone.

Figure 12. Relative importance of factors affecting overall satisfaction and value for money

As an emerging market, consumers within Latin America expect better connectivity, varied pricing plans and good quality services, with special emphasis on improving the outdoor experience. Network satisfaction influences overall satisfaction in the region, as seen in

Figure 12. People are more particular about the quality of their data connection than their voice connection. Value for money is driven by network satisfaction. Aspects such as customer service, price plans and billing, influence service satisfaction in Latin America.

Service

Service

Voice

Devices offered

Initial purchase process

Customization

Accurate billing

Technical customer service

Billing customer service

Price plans

Network

Network

Data

Source: Ericsson ConsumerLab, Liberation from location, Latin America 2015 Base: Mobile phone users

48% 52%

In short, consumers expect their daily quota of information and entertainment to be met, while also being able to access the larger community both offline and online.

EDB-14:008628 Uen © Ericsson AB 2015

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Liberation from Location: Ericsson ConsumerLab Insight Report, Latin America edition

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