/ 16 February 2006

Emerging countries hold 3GSM roll-out key

Capturing market share in emerging countries is vital, according to telecommunications operators who relentlessly plugged their third-generation (3G) mobile phone technology at a four-day 3GSM World Congress in Spain.

At the conference, which ended on Thursday, the targeting of latent demand in massive developing markets led by China and India was raised as a key strategic issue: operators have invested tens of billions of dollars to buy licences and establish infrastructure.

Seeking to make the most of new services, such as live television on cellphones, a 600-strong galaxy of top sector professionals trooped to the Congress in Barcelona to show off their latest wares to about 60 000 visitors.

Top figures included Wang Jianzhou, chairperson of China Mobile, the world’s biggest operator in a country where the number of cellphone users will be close to 600-million by 2009, but companies such as Nokia, Vodafone, Sony Ericsson and Microsoft, in the shape of Microsoft chief executive Steve Ballmer, also turned up.

All are out for a slice of the global pie which is set to comprise three billion cellphone users by 2008/2010 compared with about two billion at the end of 2005.

The event drew 40% more visitors than a year ago and clutches of reservations were already being made for next year before the conference began to wind down on Thursday afternoon.

The presence of Microsoft and MTV, companies which are not operators, shows the hold that the high-growth mobile telephony field and the potential for technological convergence have on the industry and those looking at links to it, such as businesses in broadcast or content provision.

The sector sees average revenue per user (ARPU) set to skyrocket in the coming years as cellphones host an ever-broader palette of content emanating from the internet, music, television or video providers.

The congres hosted a multitude of round tables at which experts have huddled in their search for a “killer application”, the so-called magic content-based leap of techno-faith which could cost relatively little to put in place and generate huge revenue once it took off.

Television on cellphones is set to come to Europe via the Digital Video Broadcast Handheld technology, which adapts digital TV to the cellphone screen.

Research shows users would be willing to part with €8 to €10 a month on top of their existing budget to embrace such a gadget.

Another potential “killer app”, instant mobile messaging, inspired by its web incarnation, brought 15 of the world’s top operators here this week and they promised to put in place mutually compatible systems.

But such visions of the future contrasted with problems over access to the net, and even power provision, experienced by reporters covering the event.

Meanwhile, suppliers and operators have been casting their eyes ever more towards emerging countries such as China, India and African states not just for customers but also for hardware, particularly in China and India.

The favoured strategy towards customers in emerging states appears to be keeping outlay to a minimum in producing low-cost handsets for about $30 and accepting an expenditure pattern of about four to five euros per individual per month, compared to nearer €30 in Europe.

China Mobile’s Wang Jianzhou, who forecast 3G would be up and running in China before the 2008 Beijing Olympics, left many visitors open-mouthed in relating that the company was adding three million users a month to its 250-million user pool.

Chinese — and Indian — penetration is roughly at the about 30% mark now but that only underlines the vast potential for growth. – AFP