New World Order - #BRICS and more

There's a good article from the Guardian's David Smith on the rise of Africa. It flags how this is at least in part being fuelled by investment from China, which fits well with a pattern we know and understand in the telecom industry - you only need to look at the number of recent articles on Total Telecom referencing either ZTE or Huawei and Africa to know this is true.

This is also likely to be a theme at our next Breakfast with Total Telecom event, that focuses on high growth markets, and amongst the speakers boasts BT Global Telecom Markets (GTM) General Manager (Asia Pacific, North America, Middle East and Africa), Stephen Kelly, who is addressing The Carrier opportunity in Africa.

However it will be interesting to see how far the debate expands into the more concerning issue of the future, both for the currently emerging markets, and for the entire planet, as flagged in todays ars technica article, Hot, crowded, and running out of fuel: Earth of 2050 a scary place.

To join the debate, register to attend the Emerging Markets breakfast briefing on the 10 April 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 10^th of April will examine some of the hottest high growth-markets globally and explore how opportunities vary with location.

Speakers include:

·         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.

Contact : breakfast@totaltele.com

African Mobile Market - Boom or Bust ?

The boom in African mobile telecommunications appears to be under threat due to an uncertain investment environment, owing largely due to overcrowding of companies and ruthless competition for clients.  

In a recent article published on www.totaltele.com, Mary Lennigham, Editor at Total Telecom says “Cooperation between governments and operators has driven significant growth in the African mobile industry over the past decade. However, there are no guarantees that this growth will continue”, the article goes on to highlight key points from a new report by Booz & Company, stating that “a number of issues must be addressed as the continent moves towards the next phase of mobile development”. 

The report states that investors are hesitating due to extreme pricing pressure, continued regulatory risk and escalating unattractive investment environment, thus jeopardising the next wave of telecoms investment and growth in Africa.  

Indeed, Dr Bitange Ndemo, Ministry of Informations and Communications Permanent Secretary backs up the claims in the report by Booz & Company saying that “there has been market erosion of up to 20%, mostly because of competition that has seen cuts in tariffs in the sector. A new entrant or investors would have a lot of problems as the major firms are struggling due to stiff competition”.  Certainly the four major firms, namely Bharti Airtel, Orange, Safaricom and MTN are competing aggressively for subscribers, with tariff cuts in both voice calls and data services being extremely significant, making it difficult for new entrants to enter the competition.

However it may not be all doom and gloom as the next wave of growth could be spurned by increased focus on innovation, roll out of new products and investment in expansion of data services and value added services. Indeed services like M-Pesa or other mobile financial solutions and mHealth, which according to the GSMA, will generate £1.2 billion by 2017, are expected to create significant growth in the African Market. Perhaps also as adoption of 4G networks and LTE expands in the coming years, increasing mobile penetration in Africa, there is scope for new entrants and investors to gain from the continent.

ForgetMeNot Africa, is one such company aiming is to bridge the digital divide for Africans by providing Internet messaging on every mobile phone.  Their innovative technology connects the huge gap between the Internet and mobile messaging worlds allowing any mobile phone to send and receive email and chat-message on any carrier’s network. Today ForgetMeNot Africa has bloomed into a carrier class Unified Messaging service provider, leading the way for innovators to profit from Africa’s tentative investment situation.

Jeremy George, COO at Forget Me Not Africa, will be part of the panel discussing "How mobile deployments are playing out in Developing Markets". To find out what the current challenges and opportunities for operators are within these regions and what predictions we can make regarding the future of these markets, join Total Telecom Wireless World, on the 12th-13th of June, 2012.