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.

June 8, 2010 17:06 rgupta

Realizing the potential emerging markets have, Research in Motion (RIM) has upped its ante and is going full hog in the Chinese market, a market which has been a strong hold of Chinese handset manufacturers.  China Mobile launched Blackberry three years back, and now China Telecom is going to launch Blackberry handsets on its EVDO network. Not only this, RIM’s venture capital arm, Blackberry Partners Fund, which invests in Blackberry applications, has joined hands with China Broadband Capital partners to set-up a US$ 100 million fund for mobile internet and development of Chinese mobile applications in China.  Content localization or developing applications in local language is nothing new for established handset vendors. Nokia’s low cost handsets are available in 11 Indian languages and are offering Chinese content on its devices in China as well. But what’s more important is targeting the right audience at the right time and on the right platform.  Now that two major mobile operators are launching Blackberry on their networks, covering most of the Chinese population, RIM has made the right move to take advantage of the situation. At present Blackberry handsets have been mainly used by high end executives due to high device cost. Applications like email etc are accessed in English, which is not a preferred language in China.   Now that RIM’s focus is on consumer applications and 3G subscribers has been increasing every passing day, Chinese applications on Blackberry devices could make a killing in the Chinese market. It’s not rare for Chinese subscribers to have Chinese applications on mobile devices but it certainly makes a difference if a subscriber finds similar applications on Blackberry devices.  But just offering Chinese applications on the Blackberry may not be enough to ensure RIM’s success. Chinese handset vendors and other vendors like Nokia and Samsung are already offering such applications on their devices. RIM will have to differentiate itself from the already crowded Chinese market by launching some niche applications targeted at different consumer segments. But whether it will be able to make a difference in China, only time will tell.

Rahul Gupta

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.

October 28, 2009 17:10 rgupta

 

China has upped its ante to promote its home grown TD-SCDMA technology. The Ministry of Housing and Urban-Rural Development has signed a cooperation agreement with China Mobile to give priority in the use of TD-SCDMA technology for housing and rural/urban development. China Mobile plans to support the ministry with e-governance, information infrastructure, housing programs, public funds and environment protection.  

By June-09, China Mobile had around one million TD-SCDMA subscribers but it has an aggressive plan to cover 70% of the geography by end of 2011which essentially means providing coverage in 238 cities. The deal with the Ministry will help, since the primary task of this Ministry is to provide subsidized housing in the cities. Around 2.5 million households had moved into this subsidized housing by the end of 2008. In May this year, the Ministry released a three-year plan to provide affordable housing for 7.5 million low-income urban households. It’s a huge subscriber base to tap for any operator and since China Mobile has already tied-up with the Ministry, it should be able to grab a major chunk of these subscribers.

Undoubtedly China Mobile is getting strong government support to make TD-SCDMA a mainstream 3G technology in competition with mature 3G CDMA technologies - WCDMA and CDMA 2000. This will definitely help China Mobile to grow rapidly. China Unicom and China Telecom will have to pull up their socks to compete with an over aggressive China Mobile.

China Mobile’s major problem at the moment is to manage and make TD-SCDMA handset available to the subscribers. Vendors too will have to come out with an expanded range of TD-SCDMA handsets at different price points to compete with the more mature and more broadly supported 3G technologies.. At present Samsung, ZTE and Coolpad are the top selling TD-SCDMA handset vendor brands in the country but they still have to go a long way to come closer to WCDMA,CDMA 2000 feature loaded handsets. According to our Wireless Device Strategies Service, the total TD-SCDMA handset shipment in 2008 was 0.1%, which is expected to rise between 3.4% by end of this year and around 8% by 2010. Though China Mobile has been able to rope-in almost all major handset to come out with TD-SCDMA device but due to limited models in this category and poor products quality, these devices are yet to gain grounds in the highly competitive Chinese 3G market. Nokia has recently launched its first TD-SCDMA model 6788 and it will definitely make competition more intense among TD-SCDMA device vendors.

If China Mobile manages to develop a competitive portfolio of handsets that provide a compelling experience on optimized applications, TD-SCDMA can flourish in the country.

  -Rahul Gupta