The $100 smartphone is the key driver for mobile internet

by Irina Sandu

The evolution of mobile penetration and in particular mobile internet was a topic of discussion at today’s keynote at Mobile World Congress. The CEO of Telefonica Latin America, Santiago Fernandez Valbuena presented what makes the Latin American countries the drivers for growth in the emerging markets segment. They have 3 key elements that allow for the fastest growth in mobile adoption, which in turn is a key factor for economical growth. These factors are:

 

  • a young and vibrant middle class
  • an open society
  • an educated society

 

In Latin American countries, telecommunications are the second biggest necessity, after food. Even during the recent recession it was one of the sectors which still continued to grow. The desire for mobile internet is great in the region, where other means of going online are not existing or scarce. The key to mobile internet adoption is the $100 smartphone, which is affordable enough to bring the internet to volumes of people. Network operators are together pushing for affordable hardware as the switch from a feature phone to a smart one generates ARPU increases of up to 10%.

 

Providing connectivity to emerging markets poses a different set of challenges, described the CEO of Bharti Airtel, Sunil Bharti Mittal. As the leader of the world’s 5th largest telecom operator, he described that operating in these regions required a change in thinking in the way that a carrier is run and how he needed to adapt the business model to fit India’s market environment. Another type of hurdles, however, is present in Africa, where network operators need to become part-time construction companies. In order to install communication towers, carriers first need to build out the infrastructure to get there. They receive support from governments, who are aware of the economical benefits that connectivity brings to a country, so spectrum prices are generally more affordable, but it looks like penetration of African markets requires yet another re-thinking of the network operators business model.

 

The focus on emerging markets is a theme which continues through-out MWC. A track in the conference is dedicated to mobile health, which is a tool that is seeing great results and innovative uses, as it contributes to the development of the world’s most populous countries.

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