The
unconnected
masses
Emerging markets remained a keen target
for operators and vendors alike in 2007
as the growth opportunities they
represent became ever more attractive.
By Mike Hibberd
�he world’s advanced mobile markets,
perhaps understandably, draw a majority
share of industry attention. In these
countries the latest technologies are used to
showcase the most sophisticated services
on the handset manufacturing community’s
most cutting edge products.
In numerical terms, however, this level of
attention could be judged disproportionate.
There are now more mobile users in developing
markets than in developed. According to
figures from Informa Telecoms & Media (ITM),
China and India alone accounted for 55 per
cent of total, global net additions in the first
half of 2007. ITM also predicts that the total
subscription base in the Asia Pacific region
will double between 2006 and 2012.
In emerging markets, then, continued
growth was the story of the year, with annual
user base increases in some developing
markets exceeding 200 per cent in the year
to June 2007.
It was a year that saw the continued expan-
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sion of regional players, and further moves by
developed market operators to carve themselves
a share of the opportunities for rapid
subscriber uptake. For these international
investors, there is considerable motivation.
Carriers that restrict their focus to emerging
markets will probably see their global market
share decreasing as uptake in high growth territories
continues. This in turn could impact
on carriers’ economies of scale.
“Those operators that are continuing to see
growth in emerging markets are, I think, becoming
more influential in global purchasing
and what applications and services vendors
and software providers are developing,” says
Leslie Arathoon, VP research at Pyramid
Research.
Such concerns may have been behind
moves like Vodafone’s acquisition of Indian
carrier Hutchison Essar, first announced in
February. “Vodafone has been shrewd and so
has Telefonica,” says Sean Collins, chairman
of the global telecommunications and media
EMERGING MARKETS FEATURE
practice at KPMG. “I don’t think many people
realise that, in terms of subscriber numbers,
Telefonica now has a business in Latin
America that is the same size as the whole
of the Telefonica group was back in 2001. In
the space of six years they have created a
new Telefonica.”
Keen to stake their claim, carriers have made
high profile commitments. In October, Vodafone
and Orange were among a group of operators
that pledged to invest more than $50bn in Sub-
Saharan Africa over the next five years in a bid
to drive mobile coverage to 90 per cent of the
region’s population. Alongside the European
pair were MTN and Zain (formerly MTC), players
that each boast substantial pan-African
and Middle Eastern footprints.
With the substantial expertise that local
players have built in these markets, the dominance
of Western players remains very much in
question. And financial muscle is not an issue
for Zain, at least, which paid $6.1bn this year
for a licence to operate in Saudi Arabia. >>
37
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