Emerging markets: a possible data goldmine, or pitfall

Emerging markets would seem to have fallen off the priority lists of the major European operators as they struggle to reduce Capex and Opex costs in their home territories, at the same time as battling to add capacity within their 3G networks to handle the seemingly insatiable demand for high-speed data service.

Perhaps these new markets have been seen as providing little more than millions of users who want very low cost services--mainly voice and SMS--with the potential to grow to using more profitable services in the dim and distant future.

However, a new study from eMarketer maintains that many of these new markets - and it narrows this down to Brazil, Russia, India and China (BRIC) - are rapidly moving to a level of maturity. The company claims that, for the most part, the extreme subscriber growth of the past is changing as the infrastructure improves and more consumers develop both the income and appetite for more advanced wireless services.

With 3G networks being rolled out across most of the BRIC countries, with India remaining the lone exception, and mobile subscribers purchasing smart devices in rising numbers, mobile internet access and data usage will become the growth engine, much as they have in other markets.

This evolution will take time with many users remaining on less sophisticated devices and legacy 2G networks well into the middle of the decade. But as mobile devices become the primary mode for accessing the internet, especially in India and China, more sophisticated marketing opportunities will emerge.

eMarketer maintains that mobile internet usage will see high growth rates through the middle of the decade as increasingly capable handsets become multipurpose, or even all-purpose, access devices for emerging-market consumers.

Certain population segments are said to already be ahead of the curve. In China, Russia and India, mobile internet penetration among teens exceeds the national average, sometimes by a large margin. For example, the research firm Nielsen found that mobile internet penetration among users ages 13 to 17 in China was 50 per cent in Q1 2009, whereas eMarketer estimates that overall mobile internet penetration in China only just over 17 per cent as of the end of the year.

One final point made by eMarketer highlights that, by the middle of the decade, mobile internet users will equal or outnumber PC-based users in the BRIC countries and other emerging markets.

If this prediction proves to be true, or even approaches this situation, then operators that have made major investments in the BRIC countries could benefit from a windfall of new services revenues, or watch their networks melt as these new, but tech-savvy, users access the internet as never before.-Paul