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Its all about emerging markets
February 13, 2007
The theme of this year’s 3GSM World Congress was summarised by Naguib Sawiris, chairman and chief executive of Orascom, the Egyptian mobile phone operator, at the first keynote session of the conference.
"This is the time of the emerging markets to come back. Just look at us. We have two Indians and an Egyptian on stage," he said.
Indeed, a packed auditorium of telecoms executives were hanging on the every word of a powerful "emerging markets" trio of Arun Sarin, chief executive of Vodafone, Sanjiv Ahuja, chief executive of Orange and Mr Sawiris, whose Orascom has a strong grip not only in the Middle East but recently acquired operators in Italy and Greece as well.
Mr Sarin was looking triumphant after clinching a deal earlier this week to buy Hutchison Essar, the fourth largest mobile operator in India.
Mr Sarin was waxing lyrical about the possibilities of India, where mobile penetration of just 13 per cent today is expected to rise to 40 per cent within the next few years, creating a potential subscriber base of around 550m people.
Also on the panel was Sanjiv Ahuja, chief executive of Orange, who, while not embarking on the same kinds of foreign adventures as Vodafone, spoke of Orange’s recently launched operations in Senegal.
Europe is now a slow-growing market. Figures out on Tuesday from GfK, the research company, showed that Europe now had 210m mobile phone users, but numbers had only grown 5 per cent in 2006. Naturally emerging markets are more exciting.
A number of announcements at 3GSM have been for products targeted at these markets. Texas Instruments is creating lower-cost chips for the market, and Motorola’s chief technology officer, Padmasree Warrior, told the Financial Times that the company was targeting developing countries with a number of products, such as solar-powered base stations suited to inaccessible areas and a new ultra-low cost phone designed to bring people who had never before made a mobile phone call into the wireless world.
But the developing markets can be as brutal as they are tempting. Motorola had a poor fourth quarter, partly due to being hit by price competition in emerging markets. Motorola’s Ms Warrior, believes the land grab is temporary phenomenon, and that eventually sleek designs - such as the z8 slider phone the company launched yesterday - will begin to move up price points. There is no guidance, however, on when this will happen.
A number of announcements at 3GSM have been for products targeted at these markets. Texas Instruments is creating lower-cost chips for the market, and Motorola’s chief technology officer, Padmasree Warrior, told the Financial Times that the company was targeting developing countries with a number of products, such as solar-powered base stations suited to inaccessible areas and a new ultra-low cost phone designed to bring people who had never before made a mobile phone call into the wireless world.
But the developing markets can be as brutal as they are tempting. Motorola had a poor fourth quarter, partly due to being hit by price competition in emerging markets. Motorola’s Ms Warrior, believes the land grab is temporary phenomenon, and that eventually sleek designs - such as the z8 slider phone the company launched yesterday - will begin to move up price points. There is no guidance, however, on when this will happen.
