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.

May 26, 2010 04:05 telliott
We recently did some interesting interviews with low-income mobile phone users in Manila. (See “Voices of the Next Billion: Initial Input from First Time Mobile Phone Owners in the Philippines.”) They were not the poorest of Manila’s poor, but they were poor enough, some with stories that were difficult to hear, like Edward, who took some architecture courses but has a part time job on a cleaning crew at a McDonald’s. He missed a call from a better job because nobody was home to answer the landline. He got a mobile phone after that, but the job won’t be calling him back – there’s too many others in line. Or Jennalyn, who makes $65 a month as a nanny, and whose husband had to go back to the family farm because he couldn’t get work in Manila. Obviously, we didn’t do the research to learn if being poor in Manila is a hard life – we pretty much knew that going in. (Although having names and faces and stories does take it out of the abstract a little.) A research goal we did have was to find out what people in constrained economic circumstances want in a mobile phone. There we did encounter unexpected things – not “rethink-your-entire-worldview” unexpected, but thought-provoking nonetheless. For example, not everybody wants a cameraphone, but for those who do, VGA resolution is not enough. Several people said a camera was a key factor in their next phone decision – but at least a megapixel. (This included non-cameraphone owners as well as those whose current phone has a VGA camera. Few respondents had digital cameras, so the cameraphone is their sole image recording device.)
  •  Edward, for example, wants to be able to take printable pictures of his 5 month old baby.
  • ­ Alvin, an unemployed 27 year old, has a used Nokia 3200 but would like to upgrade to a used E71, primarily for the camera. He wants to be able to upload pictures onto the Facebook account he maintains at Internet cafes.
I’m not arguing on the basis of a small sample that megapixel-plus cameras are the key to the low-income market. But I am suggesting that bare minimum functionality may be where planning offerings for the bottom of the pyramid should start – but it should definitely not be where it stops. 3G phones, while currently a bit of a stretch for this segment, ought to be within a reasonable planning horizon.

May 20, 2010 21:05 David Kerr

sa photo dk


May you live in interesting times as the old Chinese proverb goes. Well in the information, communication and entertainment industry we certainly do. Some very interesting questions face our industry whether we look at:

  • the outcome of much delayed Indian 3G auction or
  • the battlegrounds around HSPA+ and LTE or
  • the surging Android ecosystem vs. weakening Symbian or
  • the upside potential for WebOS under it new owners
  • the potential disruption caused by mobile cloud phones and device

Every major technology advancement has lead to a massive disruption in the handset and infrastructure vendor community.

  • In 3G, Motorola’s slim myopia led to its near ruin and has provided huge growth for Samsung and a foothold in international markets for LG and SEMC.
  • On the infrastructure side 3G was expertly grasped by Huawei and ZTE leading to a new wave of M & A and a new world order which counts Nortel as a victim and seriously challenges ALU.

So how will the migration to 4G change the playing field?

  • Who will benefit most on the operator/service provider side?
  • Will Cloud Phones be disruptive in LTE?
  • Will operators find a path to realign the traffic/revenue mix with mobile broadband devices?

I would welcome your thoughts on these key questions. Also don’t forget to join our client webinar on Thursday May 27.



May 7, 2010 05:05 rgupta
It’s not only in India, tower hungry operators are there in other emerging markets also. Indonesia’s largest telecom company, PT Telekomunikasi Indonesia, is keen to acquire Singtel’s 9000 towers in Telkomsel so that it can consolidate tower business under an existing entity ‘Mitratel’. The plan is to make ‘Mitratel’ an infrastructure company so that the towers can be leased out to other operator also. The valuation of these 9000 towers comes around US$ 1.2 billion.

Strategy Analytics reviewed the infrastructure business done by operators and independent infrastructure companies in the following report: http://www.strategyanalytics.com/default.aspx?mod=ReportAbstractViewer&a0=5391If the acquisition goes through, I think Mitratel will have a great advantage. Mitratel will have around 29000 towers. All it needs to do is replicate the business model of Indian infrastructure companies like Indus Towers and GTL Infrastructure of building towers using solar power and increasing tenancy ratio from 3 to 5. The operating expenditure of solar towers is very low Mitratel CEO anyway says that of the 20000 towers they possess, only 13000 are economically viable as at present only Telkomsel is using these towers, which simply means Mitratel can lease out to other operators and start monetizing it. If at all it happens, it will be a win-win situation for both Mitratel and its customers/operators as passive infrastructure saving will have huge cost saving on their operational expenditure.  Cost saving is imperative for half a dozen operators operating in the Indonesian market as these operators need to focus on their core business to increase market and revenue share. The main competitor, Telkomsel, which is the largest mobile operator in the country, has been focusing on data content services as they already have infrastructure in place. (Data content services contributed 23% to Telekomsel’s overall revenue in Q4, 2010). But for other operators, it will be too late if they build infrastructure and then start service offerings in a country where key data services like broadband and pay-TV etc haven’t even reached to 5% of the population but since Telkomsel has been successful in making profits from data services in Q4 2009, other operators shouldn’t wait and watch competitor minting money and rather start focusing on offering data services  

The opportunity is huge for all operators in Indonesia. All they need to do is focus on their core competencies. Besides Telkomsel, none of the other operators are in a position to foray into the passive infrastructure business. It makes business sense to use its infrastructure and focus on data services.

Rahul Gupta