Emerging Markets Communications Strategies

Analyzes the issues facing existing and new players who are looking for a share of growing mobile markets in over 30 developing countries, including the developing regions of Asia and Africa.

February 24, 2010 14:02 telliott
My late husband, the President of Nigeria, left me a large telecommunications company. I need someone of your skills and reputation to help privatize it. Please send me your bank information …  Well, it probably didn’t happen like that, but the flap about China Unicom’s alleged participation in a bid for Nigerian Telecommunications Ltd. (Nitel), Nigeria’s national telecoms carrier, does make you wonder if they should tune their spam filters a bit. The story, in brief: On Tuesday, 16 February a consortium called New Generation Ltd., which allegedly included China Unicom, was reported to have won an auction for Nitel, with a bid of US$ 2.5 billion. This was $1.5 billion more than the next highest bid. Bloggers muttered darkly about inside deals. Wait, it gets better.
  • On Wednesday, China Unicom denied being part of the consortium. It had only offered to serve as technical advisor, although it might eventually be interested in an equity stake. (Original reports cited a figure of at least 20% ownership, though China Unicom’s subsequent official statement confirming their interest did not quantify it.)
  • Interested parties then started trying to contact another consortium partner, referred to in the first press releases as “Dubai-based Minerva Group.”
    • I emailed the Dubai office of Minerva Financial Services, based in the Channel Islands. They were not the Minerva in question, did not know who was, and – reading between the lines – rather wished people would stop asking.
    • The Lagos Daily Champion got similar denials from two other Minervas in Dubai, including Minerva FZ, a wireless VAD, which is at least halfway plausible.
    • Reuters reports that calls to Minerva General Trading were not returned.
  • In case New Generation disappears, the second bidder, at $956 million, is scarcely a household word in telecommunications, either: Omen International, registered in the British Virgin Islands. Go ahead, Google them and see if you find more than I did.
Entertainment value aside, what can we get from this mess? It would be tempting, but unwise, to decide that Nigeria should be avoided until it starts acting more like Switzerland. That could be a long time, and meanwhile Africa’s largest mobile market presents some real opportunities – along with equally real challenges. The fact that China Unicom – generally speaking, no dummies – would consider an equity position ought to suggest that serious players are weighing the risks and rewards. But don’t bring your checkbook to the first meeting. - Tom Elliott Update, 10 March 2010. In a development that should surprise no one, it has been reported today that the head of the Bureau of Public Enterprises, the agency supervising the sale, has been sacked. Well, technically "suspended," but I suspect it amounts to the same thing.

February 4, 2010 17:02 rgupta

I must first admit I was not a huge fan of Indian handset brands a year back and I still wonder what made them think about competing with established players like Nokia, RIM Blackberry, Samsung and even the ZTE’s of the world.   Maybe the thought of the untapped rural and low-income customer base of India crossed their minds but will they ever be able to match the scale of distribution network these established players have? I doubt it.  For over a year ,Indian handset brands like Micromax, Karbonn, and Intex have been aggressively selling handsets in the open market in India. The way they have positioned themselves and their hunger to grab customers really amaze me. They are tough competitors for low-cost Chinese handsets even though they offer similar features and price. and in fact have outsourced manufacturing to Chinese OEMs. Last quarter they got a break when the government banned Chinese phones which were without IMIE (International Mobile Equipment Identity) numbers, and aggressively marketed mobiles with valid IMIE numbers  Most of the Indian companies are concentrating on popular handset features such as FM radio, water resistance, currency checker, and 30 days of stand-by battery life.   Most of the Indian brands are following the footsteps of established players in branding and retailing. They are selling their devices at both organized retail -  mostly big retailers like ‘The Mobile Store’, ‘Hotspot’ etc. -  and unorganized retail which are mostly electronic stores and other multi-product outlets in rural areas.  Indian vendors are trying to use branding as effectively as the established players to grab the attention of customers. They are aware that the low-income and rural customer doesn’t care about brand value but the urban customer does. They have started sponsoring cricket events and entertainment shows which has resulted into getting mindshare among urban customers (http://timesofindia.indiatimes.com/sports/cricket/series-tournaments/sri-lanka-in-india-2009/top-stories/Karbonn-Mobiles-to-sponsor-India-Lanka-ODI-series-/articleshow/5336694.cms). Micromax and Karbonn are considered established Indian brands. Besides these, Lava, Intex, and Ray are some other brands which are getting good response from customers.  I believe the aggressive approach taken by Indian handset vendors could make a small impression in Nokia and ZTE’s ULCH market share not only in India but in neighbouring countries as well where they plan to launch handsets this year. 

Our Wireless device strategies report (http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=4213) says that Indian handset vendors will grab 3% market share by 2013. They are obviously not dominating the market, but they are here to stay and could be a potential threat to foreign vendor that are eyeing rural and low-income subscribers.

Rahul Gupta