According to a report recently released by Strategy Analytics entitled “Global Active Mobile Broadband PC/Modem Subscription Forecast: 2007-2018,” emerging markets will dominate medium term growth in mobile broadband subscriptions for PCs and modems. They will account for 80% of connections by 2018. China and India will have one third of the world’s connections in four years from the date of the report’s publication. Phil Kendall, executive director, wireless operator strategies, Strategy Analytics, who authored the report, shared his insights as to the implication for businesses.
Kendall stated that there are a few players who stand to gain from this forecast. “In terms of directly benefiting from growth in the mobile broadband market, it is really the mobile operators and any resellers who are front and center here,” he remarked. Why are mobile operators and resellers in the best position to benefit? “To offer a service you either need to own spectrum and have built out a network or find an operator willing to resell you network capacity so you can package that up to sell to customers,” Kendall explained. “The ability of anyone else to enter that market is based on their ability to get the spectrum or the reseller agreement – those opportunities are generally few and far between in emerging markets.”
Mobile operators already active in these markets will be the biggest winners. “The businesses who will benefit most in this category are really the operators already active in those markets,” Kendall commented. “Realistically, a Canadian operator wishing to benefit from emerging market mobile broadband growth would need to start buying up emerging market mobile operators and we are not seeing much evidence of that being a trend likely to happen.” Established players will have more success, Kendall predicted. “Where there are new licenses being offered for spectrum in these markets we tend to see a mixture of successful bids from experienced international/global operators and local players – for the international players with good footprints in emerging markets (Vodafone, Orange, Telenor, Ooredoo, Airtel, etc.) this almost becomes a plug and play business where they take the business model and technology strategy from one low-cost market and apply it to another one.”
However, mobile operators and resellers will not be the only ones to benefit from this growth. “There are two further obvious groups of beneficiaries,” Kendall said. These two groups are infrastructure and device equipment manufacturers and Internet-based businesses. “Growth in mobile broadband modem volumes in emerging markets is good news if you are a modem manufacturer, chipset manufacturer or a vendor involved in the deployment of the actual networks,” he remarked. “More mobile Internet connectivity in emerging markets means more potential customers for Internet-based businesses – it is not surprise that Facebook, Google, Microsoft are keen to encourage initiatives which drive up [business].”
Kendall sees rich opportunities available for Internet-based businesses. “Removing the Digital Divide is a key agenda for many emerging economies,” Kendall asserted. “It has benefits in terms or education, access to information and more affordable services, productivity gains, etc. To that end, the ability to enter and execute in these markets as a service/content provider will be based on tapping into local needs, both in terms of relevant content, lining up with consumer patterns of behaviour, and meeting consumer pricing expectations.” Opportunities include new business models for delivering online content, delivering solutions which help to manage end-user costs and driving the cost out of hardware.