Emerging Markets Over The Air (London)

Sep, 2010

Raj Singh

www.rajansingh.com

@mobileraj

Agenda

• Market data

• Case studies

• Your input!

Let’s make this a discussion

What the Telecom Analysts Think?

Where Are the Subs?

270M

55K

174M

747M

488M

45M

200M

110M

78M

Population ≠ Money

PCs Versus SIM Cards

Maybe Start With Youths?

Average Selling Price

Interesting Correlation

Smartphones Versus Featurephones

The Role of Mobile in Emerging Markets

ME & Africa Wins

App Retention

Mobile Advertising

Many Business Models

Advanced Markets Emerging Markets

Premium Apps

Mobile Ads

OEM Licensing

Operator Licensing

Virtual Goods

Free

Branded

Gift Cards

Common Misconceptions

• Low price, high volume?

– iPhone users :)

• Data is expensive?

– Nigeria charges $1-2 / month for unlimited data

• 3G isn’t there?

– Parts of Africa are deploying 4G; not stymied by backward support of 2G

• Ad dollars are low?

– In India, ad dollars on mobile are higher than on PC

Case Study: Nokia Music

• Music publishers do not make money outside of the top 5 countries (piracy!)

• Nokia launches Come With Music – All you can eat full-track download

when you buy the phone

– Nokia adds $50 to the BOM and pays $30 to the publishers/labels (estimated)

• Available in 10+ emerging countries and growing

Biz Model: Consumer pays, music publishers get rev-share

Case Study: Mig33

• Mobile social network

• 40M registered user predominantly in SE Asia

• Revenue model driven through the exchange of virtual goods via operator billing

• WAP and J2ME lead!

Biz Model: Consumer pays, operator rev-share

Case Study: Mobile Retail (China) • Operators are the bank

– China Mobile bills through national bank

– Vivo links with Caixa (Brazil national bank)

• mCommerce in emerging countries first?

Biz Model: Consumer pays, operator (and retail?) rev-share

Case Study: Micro-Prenuer

• Mobile devices were too expensive in villages in parts of Bangladesh

• Govts in partnership with Grameen Phone give females, subsidized mobile devices

• Female micro-prenuers would rent use of the phone to other villagers (eg one phone roped to a pole in the middle of the village)

• Enabled wealth amongst poorer female population

• Brought mobile phone access to the village

Biz Model: New local economies

Case Study: Mobile Health (Turk Telekom)

Pharmaceuticals Hospitals

Physicians

Patients

Public

Ministry of

Health

Turk Telekom

Biz Model: Consumer, Operator pay

Case Study: Opera Mini / Vodafone

• Opera Mini’s proxy based approach compresses data before it’s sent to the device

• Significant benefits for low-speed networks and/or prepaid markets

• Of Mini’s 60M+ subs, a majority are in emerging markets representing 25B+ pageviews

• Vodafone has launched Opera Mini on it’s emerging market handsets

Biz Model: Operator pays or Free; Search/Advertising

Case Study: Mobile Browsing

• Mobile is primary browsing device • Not everyone can afford internet on

their phone so it is often shared amongst family members

• Some emerging market phones have integrated projectors so the screen can be projected onto a wall (to make a more enjoyable browsing experience)

• Phone can be used with a Bluetooth keyboard and mouse to simulate a desktop PC experience

Biz Model: OEM; Operator data revenue

Case Study: Mobile Payments and Banking

• Much of the emerging market lacks banking infrastructure

• Operator stores could facilitate banking transactions through a partnership with a real bank in Kenya (powered by M-Pesa)

• Consumers have more trust for the operator than their bank since it is a brand they use daily and they are already used to depositing money onto their SIM card

• M-Pesa has 10M registered users and claims to manage almost 50% of all commerce in Kenya

• 17K M-Pesa agents compared to 840 banks and 150 ATMs

Biz Model: Free, Operator rev-share

Case Study: Microsoft OneApp (South Africa)

• Feature-phone app targeted at data-cost sensitive markets (prepaid markets)

• Similar to “SMS browsers” but does use highly compressed data for transport

• Access most popular services (eg Facebook) like Opera Mini but with even more compression; uses server-side rendering (Microsoft DeepFish)

Biz Model: Consumer pays data, operator rev-share

Case Study: Nokia Life Tools (India)

• Suite of services / information targeted at India’s farmers

• Real-time prices for subsidies (eg fruit, wheat)

• Real-time prices for farmer’s needs (eg pesticides)

• Weather reports for farm planning

Biz Model: Consumer pays data, operator rev-share

Case Study: USSD (Brazil)

• 2G networks and prepaid data make browsing the internet expensive

• Mobile-XL, Shorthand Mobile, Eyeline.mobi offer J2ME apps that effectively create a UI using SMS for transport (instead of data)

• Think front-end UI to SMS services like Google Search

• Great success in 2G countries – drives cheaper SMS volume

Biz Model: Consumer pays SMS, operator rev-share

Case Study: Facebook Zero (And Friendster)

• Philippines and others charge for 1-day of data access (50 cents est.) for unlimited access to a service (eg Friendster)

• Significant revenue stream for Friendster and other popular services (represents more than even the desktop website in advanced markets)

• Operator drives data subs with longer term goal of moving to post-paid and de-commoditizing (with dual-SIM phones)

• Facebook offers same promotion (like Friendster) but forgoes the rev-share

• Facebook Zero takes it a step further; use FB to get subs hooked to data!

Biz Model: Free!

Case Study: Blackberry Messenger (Colombia)

• Even SMS can get expensive

• Use BBM and I can message my friends for free

• Offered via operators for a monthly tariff

• Has had great success and why BB is the #1 smartphone in much of SA

Biz Model: Consumer pays for BBM plan, operator rev-share

Case Study: SMS GupShup (India)

• SMS driven social network launched in the past 2 yrs (when Facebook, Orkut and others were already present)

• Represents 7-8% of all SMS volume in India

• Revenue generated via SMS group sponsored ads

Other Case Studies

• Dual-SIM phones (commoditize operator) with flash lights

• Youth journalism in Kenya

• Send email via SMS in the Philippines

• Bicycle charge kit to recharge your phone

• Mobile banking in South Africa with MTN

• Telemedicine in India

• China to be Android’s #1 country

Biz Model: Consumer pays, operator rev-share

Why Go Emerging?

• Younger and larger audience = larger social graph

• Very high mobile engagement

• Less competitive

• Cheaper data (no phone subsidies), and fast(er) networks coming!