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.

March 30, 2010 00:03 David Kerr

sa photo dk Returning from CTIA in Las Vegas last week and with only 2 days before going off on vacation to Florida, I found myself reflecting that two of the most interesting meetings I had at the show were with mobile operators.

During CTIA I spent some time with AT&T emerging devices and T-Mobile M2M teams and was impressed with how both these units had managed to cut (or at least untie) the cord to the mother ship and avoid having innovation stifled by the Borg up at Corporate.

    • AT&T’s efforts to encourage a broad range of new applications and devices has definitely paid dividends with Mr. Lurie and his team adding an impressive 1M users in Q409 as a result of new device categories (mostly PND and EBR).
    • T-Mobile revealed a somewhat unheralded pedigree in M2M.

Partnership is the order of the day.

AT&T highlighted partner applications ranging from location enabled pet collars (Apisphere) to glow cap bottles to aid compliance with medication schedules (Vitality) to a very cool new tablet from Openpeak which is very different to the announced but apparently supply side challenged iPad.  Verizon Wireless and Sprint are of course also praying at the alter of open development but perhaps with less public presence.

When I think of enterprise mobility, AT&T and Verizon Wireless are top of mind but T-Mobile has in fact quietly been developing strong competency in the M2M space over the last 7-8 years.

T-Mobile offers four different SIM form factors to suit specific applications and have enjoyed triple digit growth for the last four years. T-Mobile US has quietly activated “hundreds” of different device types on its network with only a handful of devices being rejected or pulled due to network unfriendly characteristics. These devices span Telematics, Connected Energy, Telemedicine and several other applications.

So what is the common DNA of two very different operators that has allowed them to innovate and focus on new opportunities? Separation and operational autonomy to facilitate and open funnel approach to partners and speed of execution not normally associated with US carriers.

In the case of AT&T, the Emerging Devices group was chartered with developing a new space and freed from the legacy of voice & data consumer tariffs and prepaid/postpaid categories which just don’t cut it in the new connected reality where users will have multiple devices connected but used in very different ways. Mr. Lurie and his team have been able to streamline device certification and experiment across the spectrum of business models for new connected applications.

For T-Mobile, speed of certification (days not months) and the independence of being a self-contained unit (own engineers, own sales although linked to broader enterprise group) reporting to Finance & Strategy have allowed them to pursue their “easiest to do business with” approach to the M2M markets.

So, the takeaway? Innovation is alive and well at US operators but separation from the collective corporate mind is essential.

David Kerr

March 24, 2010 14:03 telliott
Around the dawn of time – that is, 2004 or so – wireless religious wars raged, and an attractive WiMAX mythology got started. WiMAX was the Rebel Alliance against the Empire, the plucky little underdog technology stickin’ it to The Man, with his closed architectures and walled gardens. This mythology had flaws. To begin with, if “rebels” Intel, Craig McCaw, and Motorola aren’t The Man, they look an awful lot like him. And we should have kept religion out of it: it’s about making money getting bits from Point A to Point B, not about setting information free or changing the world. The proximate cause of this rumination was the announcement by Packet One, the Malaysian WiMAX operator, that 2010 is “the year of WiMAX devices.” (It’s also the year of biodiversity, according to the UN, and the year of the tablet, per Nvidia.) PacketOne will launch a WiMAX embedded netbook later this year, augmenting its array of dongles and fixed modems. And it’s this, rather than Sprint’s CTIA announcement of its WiMAX smartphone, that illuminates WiMAX’s true future. That is to say, WiMAX will make more money toting ones and zeros in places like Malaysia than in places like Las Vegas. Why? Because there isn’t much of anything else in the developing world, even in relatively advanced countries like Malaysia. Dodgy DSL and overworked or soon-to-be-overworked 3G networks pressed into service for fixed access. FTTH? Fuggedaboutit. LTE? LOL. WiMAX in its present state provides reasonably robust, reasonably affordable connectivity in the 512k to 1 Mbps range - most of the time - with user-installable CPE. Sure, they’d laugh at that in Seoul, but in Mombasa you’ll get some takers. Heck, you’ll get some in Waco, Texas. And to that point, this might be a good time to note that our modest WiMAX forecasts for emerging markets, while perhaps conservative, are generally in line with one known data point: Packet One’s 140,000 subscribers as of February. Early last year we forecast about 166,000 consumer subscribers in Malaysia by year-end 2010. A couple of other operators have finally launched, so that number will be surpassed, but not by an order of magnitude. It’s still going to be a small fraction of the total wireless subscription base. In other words, a good solid business meeting a real need. But no threat to the Empire. - Tom Elliott

March 5, 2010 04:03 rgupta


Once bitten, twice shy.  Bharti chairman Sunil Bharti Mittal doesn’t believe in such clichés.  Unperturbed by the MTN debacle, Bharti is once again trying its luck in African with Zain, which undoubtedly is easier to grab than MTN. It’s actually imperative for Bharti to go for multi-country operators as domestic market has become overcrowded with 8-10 operators in each circle and more to come. We had in fact recommended in a recent report (http://www.strategyanalytics.com/default.aspx?mod=PressReleaseViewer&a0=4844) that Bharti should continue to look beyond India.  A couple of months back the government owned operator BSNL too showed its interest in Zain . At that time we said that the government owned operators should focus on domestic operations and warned that foreign acquisitions could turn out to be a disaster for them. (http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=5097) Well, I don’t want to claim that Bharti and BSNL have gone by our recommendations but I certainly believe that they are taking the right approach: Bharti, by going aggressively for Zain and BSNL for withdrawing from it. Bharti has entered into an exclusive talk with Zain till March 25, but this US$ 10.7 billion deal is not as lucrative as it looks. There are some obvious hurdles, which I guess Bharti was expecting. A minority shareholder has emerged from nowhere to claim that Nigerian operations are not covered under this sale. Strive Masiyiwa, the CEO of Econet Wireless, which has a 5% stake in the Nigerian operations of Zain said that Zain gave an undertaking last year that it would not sell its Nigerian assets and he hopes that Zain has disclosed this to Bharti. If this claim holds up it is unlcear what Bharti will get from this deal. Nigerian operations are actually the main contributor to Zain’s overall revenue including Middle-East operations. In 2008, Zain generated fifth of its EBTIDA margins and 22% of its total sales from Nigeria. The other major headache is Zain’s license in Niger. The Niger regulator has reduced the duration of Zain’s license by five years citing poor quality of service, which essentially means Zain will have to wind up its Niger operations this year (Niger license was issued in 2000 for 15 years)or convince the regulator to revoke the decision .

But I hope that this deal will see the light at the end of the tunnel and won’t turn out to be a disaster like MTN for Bharti.

Rahul Gupta