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 29, 2011 03:05 telliott

Earlier this year Movirtu, a UK-based company specializing in Mobile Identity Management, reached an agreement with Airtel Madagascar to offer a cloud phone service.

  • Movirtu’s Cloud Phone gives a user a phone number that can be used for voice and text messaging, but which is not associated with a physical phone or SIM card. The user, who prepays for service, borrows or rents a mobile phone, enters a unique ID number and makes and receives calls, sends and receives texts or makes and receives mobile payments. The owner of the device is credited with a small amount of airtime to encourage lending.

An island country with a population of 21 million that is largely rural (70%) and extremely poor (per capita GDP = PPP$ 900), Madagascar is in many ways an idea environment for Movirtu’s virtual phone service. There are many people who are simply too poor to own even a second hand phone, and the island’s rudimentary roads and diffuse population make it challenging to profitably distribute even something as modest in size as a SIM card.

The Movirtu experiment in Madagascar may succeed or fail, but either way it raises an interesting question about the nature of the mobile phone in developing countries. If the phone is a simply a device to communicate, then accessing phone service as an ID-based cloud service makes as much sense as accessing email through Internet cafes, rather than owning a laptop and paying for connectivity.

  • On the other hand, if the mobile device becomes a primary platform for entertainment and information, as well as communication– as many in the industry devoutly hope – the cloud model may not work quite as well. Moreover, owning a mobile phone can represent an achievement of no small personal significance - owning a phone number may not have the same impact. (See "Voices of the Next Billion: Mobile Adoption at the 'Bottom of the Pyramid ")

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