Monday, 19 March 2012
Unlocking the growth potential in Emerging Markets, how do you overcome the challenges?
If the past 12 months are an indication of the future, 2012 looks set to be another exciting and unpredictable year for both business and technology. At the forefront for many Telco’s at the moment, is how to unlock the growth potential in emerging markets, however there are several hurdles to be overcome according to some of the top execs in India, Africa and Brazil.
Mobile operators in some of the world’s largest emerging markets claim that the high cost of devices is preventing them from extending services to millions of unconnected would be customers. “SIM card penetration in India stands at 74% but in real terms less than 50% of the population has a mobile phone”, said Rajiv Bawa, head of Telenor India, at the latest Mobile World Congress Show in Barcelona. This leaves a potential market of 600-700million people without mobile connections for operators to target.
Mary Lennighan wrote in a recently published article on www.totaltele.com that, In China too, smart phone penetration is only 10%, Android based smart phones are being adopted at a rapid rate by consumers and although people are embracing the mobile internet with over 354million subscribers, a staggering 89% still use 2G connections. The story is similar in Brazil, where Claro generates 15% of its revenues from mobile internet services; however penetration of mobile broadband capable devices is just 12%.
The biggest challenge according to Marco Quatorze, VAS and International Roaming Director at parent company America Movil, in these markets is to “work with the diversity of its customer base, where the potential market ranges from subscribers using mobile data services on smartphones connected to LTE Networks, to those who live in areas without electricity”, bridging this digital divide in these regions is top of the agenda for several Telco’s.
The other challenge also arises from a lack of spectrum harmonisation, offering devices which are capable of operating on multiple platforms ranging from 2G to LTE is difficult but could be the turning point in terms of unlocking potential customers and extending mobile penetration in these regions. The next wave of growth could be spurned by an increased focus on innovation. Roll out of new products and investment in expansion of data services and value added services such as M-Pesa or other mobile financial solutions, and indeed mHealth, which according to the GSMA will generate £1.2billion by 2017, are expected to create significant growth.
Much has been made of the opportunities presented by the BRIC economies, but for Telco’s looking to explore opportunities outside of their domestic markets these are not the only emerging markets to watch; Breakfast with Total Telecom, taking place on the on the 10th of April will examine some of the hottest high growth-markets globally and explore how opportunities vary with location.
· Tom Homer, CEO-EMEA, Telstra International
· Stephen Kelly, General Manager - Asia Pacific, North America, Middle East and Africa, BT Global Telecom Markets (GTM)
· David Molony – Principal Analyst – Ovum
· James Tooke – Head of Strategy and Development – Cable & Wireless Communications
· Laurent Viviez – VP and Partner – AT Kearney
Breakfast with Total Telecom is free for operators and services providers. Find out more about participating or sponsoring at www.totaltele.com/breakfast, or for more in the Emerging Markets space, come along to Total Telecom Wireless World on the 13 & 14 June 2012.
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