Handset prices hinder mobile web uptake

The affordability of mobile devices continues to be a key barrier to the uptake of the mobile internet in developing markets.
So said Dr Nasser Marafih, CEO of ooredoo (formerly Qtel), in a Mobile World Congress session yesterday on "Connecting the next billion to the internet".
Bharti Airtel MD and CEO Manoj Kohli said he sees the high cost of high-end phones as a medium-term obstacle, predicting that in five years there will only be smartphones, priced as low as $30. He argued that 100% of world has to be connected to the internet, because "humans are social animals and they love to be connected".
With only one-third of mobile users worldwide connected to the internet -- and just 13% in the Middle East -- the opportunities are huge, Marafih said. "We know what mobile has done for the Arab spring in 2011, and that was with low penetration. Just imagine if that penetration was higher, the power of the people."
He said that adding the next billion will be a more difficult challenge, and it can't be solved just by mobile operators and device makers. "It requires the participation of governments, regulators and other industry players in solving this problem."
Nokia CEO Stephen Elop agreed that bridging the digital divide is very difficult. "If it were easy, we wouldn't be talking about it here year after year."
He said one of the things that makes this opportunity so challenging is that the lessons learned in developed markets don't necessarily apply to new growth markets. "So a new roadmap is required."
While the cost of smartphones remains out of reach for much of the world, Nokia is pushing ways for users of feature phones to participate in the app economy -- often on 2G networks. Its cloud-based Express browser, which compresses data up to 90%, is used by more than 70 million people worldwide.
Mozilla Gary Kovacs CEO said it took 22 years for the number of internet users to reach two billion and will take just five years to add the next two billion.
"The question is how do we keep up -- how can we possibly create content, services and experiences that everyone will like. And these next two billion are not going to be anything like the first two billion. They are coming from emerging markets and will bypass fixed-line infrastructure altogether."
Kovacs said it's impossible for him to conceive that the services that the next two billion expect will come from just one or two companies sitting in the heart of Silicon Valley. "The math just doesn't compute."
He believes there should be many app stores, many app models, and many payments methods and many payment providers. "Among all the things that should be done, what absolutely should not be done is one or two companies approving the content that four billion people want to access online. That is not the freedom that the next two billion is asking for."
Beyond device prices, the speakers said the other barriers are affordable data services, low 3G penetration as well as the huge network investment costs and uncertain regulatory environment, particularly regarding spectrum availability. Marafih noted that this is a particular problem in the Middle East and Africa, where in some countries they don't even have regulators yet.
On the topic of cooperating with the OTT players, Marafih said he doesn't understand the current tensions and insisted there needs to be dialog.
"With them we can lift the level of service, and we can achieve the next billion faster. The issue is not so much with OTT players but with the regulators. To be cost-effective we have to have access to the right spectrum, because we still need to bring our costs down."
Bharti's Kohli said, "we should be grateful to the OTT players because they have helped drive the mobile internet with fantastic services, like Facebook."