Another year, another Mobile World Congress gone. Writing from an office in London, it’s always nice spending a few days in sunny Barcelona and be reminded that not everywhere is suffering the cold and damp of Britain’s climate.
This year’s event was remarkable by its lack of excitement. The parties were toned down (even the opening party was cancelled), and there were few new topics being talked about.
The state of the world’s economy was of course on everybody’s minds. In the keynotes, the big operators were resolutely optimistic about the telecoms sector’s ability to survive the crisis. Telefónica’s Executive Chairman Cesar Alierta went as far as saying that telecoms can “become the primary contributor to economic recovery” (while workers from his Spanish operation were demonstrating outside the congress for better union representation).
Emerging markets received a better coverage than last year’s event, although nothing outstanding was mentioned, and there was little representation among the speakers or the audience from Africa, Asia or Latin America – a sign of travel reduction from many companies, or of the move of the congress towards being a developed markets event? Following the session on Mobile Broadband for All, the main slot looking mostly at emerging markets was the Mobile Money session. Extended over two days, it gave an opportunity to solutions vendors and existing banks to showcase their visions for the services. However, they didn’t pay much attention to restrictions posed to mobile money services by strict banking regulations in countries where the services would be most useful. The undoubted winner of the mobile money market to date is still the M-Pesa service championed by Safaricom in Kenya. The service using technology developed by Vodafone, is giving established money transfer company Western Union a hard time by charging up to 10 times less commission per transaction, as was explained last year by the operator’s CEO Michael Joseph. They avoid regulatory restrictions by keeping the service to simple money transfers, but even this model is causing regulatory issues in a number of markets where the product could be successful. There will be more opportunities to discuss this in details at the upcoming East Africa Com event in Nairobi, Kenya in April, in which Mr Joseph will give a keynote presentation.
So what about the great market opportunities coming from emerging markets in these troubled times? Seemingly lost in talks about mobile broadband and LTE, investors and vendors rarely mentioned their strategies to address the markets that are still growing and investing in networks. Only this morning, Zain Group’s Africa representative Chris Gabriel announced plans to invest $1.5 billion in Africa to expand its existing networks, after having raised $4.5 billion last year to fund acquisitions and to upgrade its networks. Financing projects at such a large scale is certainly not easy for groups which don’t have the huge presence of Zain, but despite the difficulties in confirming funding plans, operators in emerging markets are likely to fare better out of the global economic downturn than their European or North-American counterparts.
