Opportunities and challenges
There are clear variations across emerging markets, but an area that may well span all emerging markets is mobile banking. For example, 1 billion users worldwide have phones but no bank accounts. Juniper Research has already forecast that average revenue opportunity for operators will exceed $5 billion by 2013. “Unlike developed markets, where mobile players must often force their way into a well-established value chain, emerging nations are fertile ground for m-banking services.”
As market penetration rates for mobile services continue to increase in emerging markets, the advertising industry will also benefit. According to Pyramid Research, “the emerging markets where mobile advertising is gaining ground will account for more than 35% of mobile subscriptions globally by 2013. South Africa and Indonesia stand out as markets where the mobile sector's share of overall advertising spending will surpass that of the Internet medium as early as 2009.”
According to IDC's worldwide mobile outlook, the fact that many emerging markets are “forced to address their domestic social, political and economic challenges — ranging from the absence of many critical infrastructures, like banking and electricity, to low literacy rates and low purchasing power that translates into low ARPUs — are also fast emerging as crucibles of innovation in such areas as mobile banking, mobile money transfer and mobile education and medicine, not to mention green initiatives.”
For operators in emerging markets where ARPU is low, the need to gradually test “new and innovative business models that beg emulation by their counterparts in developed economies” is also a matter of business survival. The ground for operators in developing countries appears to be very fertile, but clearly profitability will ultimately come out of a brand new way of thinking. A fresh way of doing business is the only way to stay alive in today’s tough economic climate.
Monica Zlotogorski is Editor of TM Forum’s Inside Latin America and Vice Chair of TM Forum’s Latin America Advisory Board