Musings on Third World Mobile
Third World market dynamics tend to be significantly different from those of First World countries. One primary difference is that there is not too much cash to move around. However, money can also be made with large numbers (volume). A large number of Third World countries also have large populations. I read this article posted in MobileMonday about the growth rates of China and Indian mobile phone markets. These numbers are huge!
… the Chinese mobile market had 374m subscribers at the end of 2005 and is expected to grow by 15 per cent to reach 432m by year-end. India’s stood at 76m last year and is forecast to grow by 68 per cent to 128m in 2006.
Over the next five years to 2010, Gartner expects China’s mobile subscriber base, the largest in the world, to grow at a compounded annual rate of 11 per cent, compared with 31 per cent for India’s, the fastest-growing major market worldwide. India’s mobile networks are still largely focused on major cities. Coverage extends to 30 per cent of its 1.1 billion population, compared with about 95 per cent in China.
India’s mobile penetration rate stood at just 7 per cent in March, but should hit 32 per cent by 2010, according to Gartner, while China’s is set to rise to 48 per cent from 28 per cent.
Let us then add the other poster boys of the Third World with large mobile markets: Russia with 130 million subscribers and Brazil with 80 million subscribers. These countries have 720 million subscribers! One thing all these large Third World mobile markets (Brazil, Russia, India, China - BRIC) have in common is low penetration rates. Even with large mobile markets, ARPU in these countries is also typically low. This is likely due to the low purchasing power of most of its subscribers.
What about the Philippines? We have a large mobile phone market with a “ok” penetration rate at 50%. Our ARPU is relatively good because of the prevalence of data services (most notably SMS). What makes us different? The most obvious reason is because BRIC countries also have low literacy rates while the Philippines has an unusually high one. Therefore, low cost SMS will appeal to the entire Philippine population as opposed to just a small percentage of those in other BRIC countries.
So if literacy were to improve in these countries or if a new service were introduced that would not require literacy the acceptance of data services can definitely contribute to better ARPU. So if they can’t do SMS VAS what can they do?
August 22nd, 2006 at 3:37 pm
[…] This luddite got a low tech phone, the Nokia 1100. This is for my personal phone line, while the N80 is for my work line. Before this, I was using an old 7250 but it was rebooting randomly. I stopped using my previous Sony Ericsson K700i since it’s hard to text with two manufacturers’ phones at the same time. This cheap phone is pretty neat. The reverse monochrome LCD was quite weird at first - yellow/green text on a black background - but it’s readable even when dim and at wrong angles. I’m guessing this was done to eliminate the need for a backlight. This is the kind of phone you’d think of in musings on Third World Mobile. […]