India is a land of contrast, and it seems that its telecommunications industry reflects this. In the past week or so, news coming from India have given very different pictures of the industry: on the one hand, strong 2008 results from the market’s operators, while on the other hand, regulatory uncertainty still prevails.
The results for the last quarter of 2008 published this week show a healthy situation. Mobile subscription growth is still strong, boosted by operators expanding into new territories as well as the launch of new ones. Operators’ financial performances are healthy, with Bharti Airtel and Reliance Communications showing EBITDA growth. The market is still attracting foreign investment, as Etisalat joined in with a stake in new operator Swan Telecom. Above all, operators are still investing in their networks and services, in order to be ready for the increased competition on the market (only today, Bharti and Alcatel-Lucent announced a network management over the operator’s fixed-line and broadband business). In a context of global economic uncertainty, India seems to be a great example of the fact that emerging markets are the best places to do business at the moment.
However, the market is still experiencing drawbacks, a major one being its relative uncertain regulatory situation. New decisions take a very long time to be made, due to the constant bouncing back and forth between regulator TRAI and the government’s Department of Telecommunications. 3G licences took years to be awarded, with yet further delays earlier this year. Particularly telling was a debate among emerging market operators in February at Mobile World Congress: while all operators where discussing their great plans for mobile broadband, the Indian operator on the panel explained he had to make do with 2.5G networks while awaiting the regulator’s decision. Similarly, the situation with MVNOs took years to be sorted, with Virgin Mobile launching while arguing that it was only a branded offer, in order to bypass the regulatory uncertainty.
As reported in the last week, one of the interesting ‘up-and-coming’ new operators, Loop Telecom, may be another victim of regulatory challenges: its license may be under threat following an enquiry by the Ministry of Corporate Affairs over its indirect ownership by Essar Group. As Essar already owns a stake in mobile operator Vodafone-Essar, its link with Loop means that the new company may be in breach of its Universal Access Service License (UASL) conditions, and risk losing it altogether.
An interesting market then, that I’ll be happy to explore further at the India & South Asia Com event in Mumbai next week. A number of senior representatives of the abovementioned companies will be there, and I’ll be particularly attentive to the contributions of the Department of Telecommunications representatives. More news to come!
29 Apr 2009
24 Apr 2009
Looking at new data on how the economic downturn affects emerging market operators’ spending
The question of how the global economy is affecting the telecoms sector has been in every discussion for a while, but there seems to be a consensus on the fact that emerging markets are not to be as affected by it as developed economies.
A new report released last week by global ratings agency Fitch Ratings is looking exactly at that: telecom operators’ capital expenditure plans in emerging markets. And the picture is a mixed one. Spending is expected to be stable to decreasing in most emerging markets (far from a doom-and-gloom vision of all money taps turned off), while Africa is to see a rise in operator spending in 2009.
According to the report, infrastructure investment is expected to increase by about 10% in Africa, and markets such as Nigeria will be the main beneficiaries of it. Indeed, pan-African operator MTN has announced it would follow up its record US$3 billion CapEx programme of 2008, with an even larger US$4 billion expenditure plan for its 2009 financial year. US$2.1 billion will go to MTN’s operations in West and Central Africa, and MTN Nigeria is expecting to invest at least US$1.5 billion on its network during this year to improve on the quality of service on its network. Zain group is also planning its 2009-and-beyond spending plans: having already acquired a stake in Morocco’s Wana on its shopping spree (as mentioned in a previous post), the group is now sorting out its finances by arranging a new deal to refinance a $2.5 billion Islamic loan it signed in 2007, according to Gulf Daily News.
In other parts of the world, the picture is not as positive, but still not bleak either. In India, one of Asia’s leading growth markets, operator expansion and new regulatory decisions (such as 3G and WiMAX licences and the introduction of mobile number portability) should boost operator spending. As an example, latest entrant operators Swan Telecom, Unitech Wireless, Loop Telecom, ByCell Communications and Datacom are looking at outsourcing contracts and are already in talks with various IT vendors like Tech Mahindra, IBM, Wipro and Infosys. The rest of Asia seems slightly more affected by the economic downturn, but operators are still deploying or expanding their networks, subscriptions are still growing, and broadband access is still a priority for the industry.
The report predicts a worse situation in Russia, with “sharp cuts, with many regional fixed-line incumbents expected to slash their capex by over 50% from the previous year, and mobile operators to reduce budgets by up to 25%," according to Nikolay Lukashevich, Senior Director and Fitch's Head of Russian/CIS Corporates. However, looking at Informa Telecoms & Media 's forecasts for this year and until 2012, the market still looks strong, particularly thanks to a growing broadband market, the launch if IPTV services and the emergence of MVNOs. Russia’s subscription base growth is set to continue in the coming years, despite a forecast penetration rate of 150.8% by 2012. Operators’ investment in data networks, including GPRS, EDGE and latterly WCDMA and HSPA, will help to achieve a growth in data revenues to reach 54% by 2012. This is likely to contribute to the quite unique trend observed in Russia of increasing ARPU levels: while between 2003 and 2006 ARPU levels fell rapidly from $16 per month to just over $7 per month (a trend observed in all markets as they develop), they have since rebounded, reaching $12 per month at the end of 2007. This leaves operators with great opportunities to invest in new services in order to retain customers: at the lower-end, messaging applications are a strog focus, and on the fixed-line side IPTV services are taking off and operators are investing in developing quality networks to support the demand.
In all the events I’ve attended in the past few months in emerging markets, the economy is a matter of concern, but operators are adamant that they cannot halt their expansion plans, nor stop investing in innovative services in order to differentiate from their competitors. What they are doing is looking at new ways to make their spending more cost-effective. That is why managed services are creating such a big interest in emerging markets. And for some of the groups whose strategy relies on international expansion, now is probably the best time to clinch cheaper deals. That is certainly the view of my colleague Nick Jotischky, who says: “ask Etisalat about global macroeconomic conditions, and it says the current climate is an M&A opportunity. A void has appeared, since many traditionally strong - and expansionist - mobile operating groups, such as France Telecom and Telenor, are becoming reluctant to get involved in acquisitive activity. Their reluctance has encouraged some wealthy Gulf-based incumbents, which themselves face intense competition in their domestic markets, to look for growth overseas. And they are using the low-cost business models that have been a success in their home markets to gain large numbers of customers in Asia and Africa.”
How operators adapt to new market conditions are one of the main topics discussed at events in the Com World Series this year. It will be interesting to see how the answers evolve as the year goes by. 2009 will close with our Middle East event, with a special focus on Middle Eastern operators’ international strategies, which will be a great way to update Nick’s point.
A new report released last week by global ratings agency Fitch Ratings is looking exactly at that: telecom operators’ capital expenditure plans in emerging markets. And the picture is a mixed one. Spending is expected to be stable to decreasing in most emerging markets (far from a doom-and-gloom vision of all money taps turned off), while Africa is to see a rise in operator spending in 2009.
According to the report, infrastructure investment is expected to increase by about 10% in Africa, and markets such as Nigeria will be the main beneficiaries of it. Indeed, pan-African operator MTN has announced it would follow up its record US$3 billion CapEx programme of 2008, with an even larger US$4 billion expenditure plan for its 2009 financial year. US$2.1 billion will go to MTN’s operations in West and Central Africa, and MTN Nigeria is expecting to invest at least US$1.5 billion on its network during this year to improve on the quality of service on its network. Zain group is also planning its 2009-and-beyond spending plans: having already acquired a stake in Morocco’s Wana on its shopping spree (as mentioned in a previous post), the group is now sorting out its finances by arranging a new deal to refinance a $2.5 billion Islamic loan it signed in 2007, according to Gulf Daily News.
In other parts of the world, the picture is not as positive, but still not bleak either. In India, one of Asia’s leading growth markets, operator expansion and new regulatory decisions (such as 3G and WiMAX licences and the introduction of mobile number portability) should boost operator spending. As an example, latest entrant operators Swan Telecom, Unitech Wireless, Loop Telecom, ByCell Communications and Datacom are looking at outsourcing contracts and are already in talks with various IT vendors like Tech Mahindra, IBM, Wipro and Infosys. The rest of Asia seems slightly more affected by the economic downturn, but operators are still deploying or expanding their networks, subscriptions are still growing, and broadband access is still a priority for the industry.
The report predicts a worse situation in Russia, with “sharp cuts, with many regional fixed-line incumbents expected to slash their capex by over 50% from the previous year, and mobile operators to reduce budgets by up to 25%," according to Nikolay Lukashevich, Senior Director and Fitch's Head of Russian/CIS Corporates. However, looking at Informa Telecoms & Media 's forecasts for this year and until 2012, the market still looks strong, particularly thanks to a growing broadband market, the launch if IPTV services and the emergence of MVNOs. Russia’s subscription base growth is set to continue in the coming years, despite a forecast penetration rate of 150.8% by 2012. Operators’ investment in data networks, including GPRS, EDGE and latterly WCDMA and HSPA, will help to achieve a growth in data revenues to reach 54% by 2012. This is likely to contribute to the quite unique trend observed in Russia of increasing ARPU levels: while between 2003 and 2006 ARPU levels fell rapidly from $16 per month to just over $7 per month (a trend observed in all markets as they develop), they have since rebounded, reaching $12 per month at the end of 2007. This leaves operators with great opportunities to invest in new services in order to retain customers: at the lower-end, messaging applications are a strog focus, and on the fixed-line side IPTV services are taking off and operators are investing in developing quality networks to support the demand.
In all the events I’ve attended in the past few months in emerging markets, the economy is a matter of concern, but operators are adamant that they cannot halt their expansion plans, nor stop investing in innovative services in order to differentiate from their competitors. What they are doing is looking at new ways to make their spending more cost-effective. That is why managed services are creating such a big interest in emerging markets. And for some of the groups whose strategy relies on international expansion, now is probably the best time to clinch cheaper deals. That is certainly the view of my colleague Nick Jotischky, who says: “ask Etisalat about global macroeconomic conditions, and it says the current climate is an M&A opportunity. A void has appeared, since many traditionally strong - and expansionist - mobile operating groups, such as France Telecom and Telenor, are becoming reluctant to get involved in acquisitive activity. Their reluctance has encouraged some wealthy Gulf-based incumbents, which themselves face intense competition in their domestic markets, to look for growth overseas. And they are using the low-cost business models that have been a success in their home markets to gain large numbers of customers in Asia and Africa.”
How operators adapt to new market conditions are one of the main topics discussed at events in the Com World Series this year. It will be interesting to see how the answers evolve as the year goes by. 2009 will close with our Middle East event, with a special focus on Middle Eastern operators’ international strategies, which will be a great way to update Nick’s point.
16 Apr 2009
When football and telecoms meet in South Africa
It seems not so long ago that Zinedine Zidane headbutted his way out of the football world cup final in Germany, but the next World Cup is now only a year or so away. This is even bigger news as usual, as it is taking place for the first time in Africa, one of the most football-crazy continents. Having visited African countries during or just after the last African Football Cup of Nations, I can testify that is a big deal there – and it was definitely useful to make friends with a taxi driver in Egypt who was more than pleased to comment on his country’s recent win.
Now, what is the link with telecoms? Well, for a start, large sporting events have always been a great way of boosting uptake of mobile content services. Due to the high price of such services, and to the limited available bandwidth, the market for such services remains small in emerging markets (with the exception of India). Operators and industry commentators also blame the limited success of such services on the lack of original local content. Next year’s world cup could be a great way for operators on the continent to make the most of their recent 3G upgrades and get customers to use their data services.
Closer to my colleagues and me, the preparations for the 2010 event in South Africa are having a considerable impact on our schedule of congresses. Next November, FIFA is holding the final draw of the teams playing in the competition. Judging from the show they put on for the preliminary draw, it’s going to be a big event. It will take place in beautiful Cape Town, at the International Convention Centre. I know this is a great venue, as we use it every year for our flagship event AfricaCom. We were planning to use it the week before FIFA is organising the draw, but it turns out that they will need it in order to prepare for their show.
That is why, after consulting with FIFA and with the Mayor of Cape Town, we are moving our event to 11th and 12th November (instead of 18th and 19th as originally planned). Nomfanelo Magwentshu, Chief Operations Officer for the FIFA World Cup Organizing Committee, says: “it is of the utmost importance to ensure that the preparations for [the FIFA World Cup Final draw] are flawless [...] to ensure an excellent television broadcast allowing us to showcase South Africa to the world, and present the country and the continent hosting the 2010 FIFA World Cup in the best possible way”. For those of you who will join us for AfricaCom, he adds: “allow me to pass on our sincere thanks not only to Informa but also to the exhibitors, speakers and delegates of AfricaCom 2009 who have been affected by our request but without whose co-operation this would not have been possible”.
For my part, I am happy that AfricaCom can be associated, if only in a small way, to such a big event. In particular, I’ll be looking forward to the possibility of meeting football stars in Cape Town – watch this space as we are planning special guests for our AfricaCom Awards evening!
Now, what is the link with telecoms? Well, for a start, large sporting events have always been a great way of boosting uptake of mobile content services. Due to the high price of such services, and to the limited available bandwidth, the market for such services remains small in emerging markets (with the exception of India). Operators and industry commentators also blame the limited success of such services on the lack of original local content. Next year’s world cup could be a great way for operators on the continent to make the most of their recent 3G upgrades and get customers to use their data services.
Closer to my colleagues and me, the preparations for the 2010 event in South Africa are having a considerable impact on our schedule of congresses. Next November, FIFA is holding the final draw of the teams playing in the competition. Judging from the show they put on for the preliminary draw, it’s going to be a big event. It will take place in beautiful Cape Town, at the International Convention Centre. I know this is a great venue, as we use it every year for our flagship event AfricaCom. We were planning to use it the week before FIFA is organising the draw, but it turns out that they will need it in order to prepare for their show.
That is why, after consulting with FIFA and with the Mayor of Cape Town, we are moving our event to 11th and 12th November (instead of 18th and 19th as originally planned). Nomfanelo Magwentshu, Chief Operations Officer for the FIFA World Cup Organizing Committee, says: “it is of the utmost importance to ensure that the preparations for [the FIFA World Cup Final draw] are flawless [...] to ensure an excellent television broadcast allowing us to showcase South Africa to the world, and present the country and the continent hosting the 2010 FIFA World Cup in the best possible way”. For those of you who will join us for AfricaCom, he adds: “allow me to pass on our sincere thanks not only to Informa but also to the exhibitors, speakers and delegates of AfricaCom 2009 who have been affected by our request but without whose co-operation this would not have been possible”.
For my part, I am happy that AfricaCom can be associated, if only in a small way, to such a big event. In particular, I’ll be looking forward to the possibility of meeting football stars in Cape Town – watch this space as we are planning special guests for our AfricaCom Awards evening!
7 Apr 2009
Bakcell: a company to watch in Azerbaijan
Azerbaijan was one of the most talked-about markets at last week’s 6th annual Eurasia Com event in Istanbul. Although Turkey is by far the region’s leader (with great talks of broadband opportunities and MVNO launches), and Uzbekistan is hailed as the next big thing, one of the markets that was most talked about was Azerbaijan. Within it, the company that drew my attention most was Bakcell, its 2nd mobile operator.
Bakcell was represented by Ineke Botter, its new CEO of two months, and seemingly the only female senior executive in the region’s telecom (although I’d welcome anyone to contradict me on this!). With a background in Greenfield operations, she was brought to the company to rethink its position and fulfil its stakeholders’ renewed ambitions.
After 15 years in the market and 1.5 million subscribers (according to my number-crunching colleagues at WCIS), Bakcell is still somewhat lagging behind Azercell, the mobile arm of incumbent fixed-line operator Azertel (3.6 million subscribers), and threatened with being caught up by relative newcomer Azerfon/NAR Mobile, already claiming 1.01 million subscribers after a launch in 2007. Furthermore, smaller alternative operators are trying to make a mark in the market, particularly with broadband services: CDMA player Catel, and new WiMAX ISP Delta Telecom (whose CTO Rahid Alekberli also spoke at the event). In these conditions, Bakcell has been suffering, according to Ms Botter, from an image of an old-fashioned company at a standstill in the market.
But under the impulse of new shareholders with “great ambitions and great expectations”, and a new management team at the helm of the company, Bakcell is gearing up to face the competition and make a strong impact in Azerbaijan’s telecom. The company is being reorganised along some key drivers to move towards a new image and stronger market position:
- A strong team to lead the change, with new executives coming from diverse backgrounds; one of them, CMO Steinn Naevdal, was at the event and is bringing experience from other emerging markets
- Building an efficient network with new ideas to facilitate the rollout (and “not just cut and paste from other operators’ models”), and money to spend; Ms Botter said the company has “good CapEx to spend”, and indeed a GSM network expansion contract was announced with Nokia Siemens Networks last month
- Focusing on the company’s Azeri roots, to differentiate from foreign-owned competitors
- Building healthy relations with the government, with the objective of participating in the process of creating an independent regulator, which doesn’t yet exist in the country
These clear points, presented with conviction by Ineke Botter, made me think that we would probably hear more from this company. I am looking forward to hearing about the innovative solutions that are to be tried out, and maybe even more to seeing its competitors’ response.
Bakcell was represented by Ineke Botter, its new CEO of two months, and seemingly the only female senior executive in the region’s telecom (although I’d welcome anyone to contradict me on this!). With a background in Greenfield operations, she was brought to the company to rethink its position and fulfil its stakeholders’ renewed ambitions.
After 15 years in the market and 1.5 million subscribers (according to my number-crunching colleagues at WCIS), Bakcell is still somewhat lagging behind Azercell, the mobile arm of incumbent fixed-line operator Azertel (3.6 million subscribers), and threatened with being caught up by relative newcomer Azerfon/NAR Mobile, already claiming 1.01 million subscribers after a launch in 2007. Furthermore, smaller alternative operators are trying to make a mark in the market, particularly with broadband services: CDMA player Catel, and new WiMAX ISP Delta Telecom (whose CTO Rahid Alekberli also spoke at the event). In these conditions, Bakcell has been suffering, according to Ms Botter, from an image of an old-fashioned company at a standstill in the market.
But under the impulse of new shareholders with “great ambitions and great expectations”, and a new management team at the helm of the company, Bakcell is gearing up to face the competition and make a strong impact in Azerbaijan’s telecom. The company is being reorganised along some key drivers to move towards a new image and stronger market position:
- A strong team to lead the change, with new executives coming from diverse backgrounds; one of them, CMO Steinn Naevdal, was at the event and is bringing experience from other emerging markets
- Building an efficient network with new ideas to facilitate the rollout (and “not just cut and paste from other operators’ models”), and money to spend; Ms Botter said the company has “good CapEx to spend”, and indeed a GSM network expansion contract was announced with Nokia Siemens Networks last month
- Focusing on the company’s Azeri roots, to differentiate from foreign-owned competitors
- Building healthy relations with the government, with the objective of participating in the process of creating an independent regulator, which doesn’t yet exist in the country
These clear points, presented with conviction by Ineke Botter, made me think that we would probably hear more from this company. I am looking forward to hearing about the innovative solutions that are to be tried out, and maybe even more to seeing its competitors’ response.
26 Mar 2009
Zain on its way to global domination
When Chris Gabriel (CEO of Africa at Zain Group) announced at AfricaCom last November that the group was ‘shopping’ and expected to confirm 3 or 4 deals in 2009, it sounded quite bullish, if in line with his presentation’s very enthusiastic tone. After all, one of the main topics discussed at the event was the likely impact of the global economic downturn on Africa’s markets, not to mention that on that same stage the year before, another group CEO (Nizar Dalloul of Comium) had said he expected to announce 2 deals in the following month – which didn’t happen.
But Zain is an unstoppable group, and they already had an announcement to make in the first quarter of this year, with a stake in Morocco’s Wana. I first heard this company’s story at North Africa Com in 2007, when their CEO gave a presentation in which he described their move from being an ISP to providing mobile CDMA services. Since then, they have acquired a GSM licence and are set to really shake Morocco’s market, one of the region’s most promising thanks to good economic and competitive conditions. Wana has been noticed for its ability to stay at the forefront of technology innovation, enabling them to provide attractive and affordable services to consumers that are increasingly technology-savvy. This model, combined with Zain’s buying power, is probably a great recipe for success. It also gives Zain its first presence in North Africa, a more developed market than the rest of Africa, where other Middle-Eastern investors (Etisalat and Qtel) have already established a strong presence.
Following this interesting first move of the year, Zain is now announcing a renewed interest in India’s booming market. Opportunities to invest are becoming rarer, and competition is already fierce, but the size of the potential market still means it is on the right side of the growth curve. Zain is said to be looking at two privately-owned operators who have yet to make their mark. India is one of the world’s most attractive markets, but also a difficult one for operators, considering the slowness of the regulatory decision process. We’ll see at our forthcoming event India & South Asia Com if Zain’s announcement is creating interest in the market.
If a deal was to be confirmed, this would be the group’s first step outside its original Middle East and Africa presence, towards its strategy of becoming a global operator. It is said to be looking at other parts of Asia as well. Going further East, there are some interesting markets with great potential in South East Asia: Vietnam, Laos and Cambodia for instance are experiencing great growth; regulatory changes are helping the sector’s development, and other international groups are showing interest. A possible future move then?
But Zain is not the only Middle-Eastern operator group looking at entering other markets. It is a noticeable trend, which has come up a lot in some of my colleagues’ conversations with local observers. The general feeling is that Zain is cleverly selective over its investments, going for strong growth markets where competition is still within reasonable levels. On the other hand, other groups are said to be spending over-the-odds for ‘trophy’ acquisitions, their main strategy being seemingly to place their logos in as many markets as they can regardless of the foreseeable returns. This will be a main focus at the Dubai event in the Com World Series to take place at the end of the year. Hopefully by then we’ll have a better idea of how investment is evolving in the region and more generally in emerging markets.
But Zain is an unstoppable group, and they already had an announcement to make in the first quarter of this year, with a stake in Morocco’s Wana. I first heard this company’s story at North Africa Com in 2007, when their CEO gave a presentation in which he described their move from being an ISP to providing mobile CDMA services. Since then, they have acquired a GSM licence and are set to really shake Morocco’s market, one of the region’s most promising thanks to good economic and competitive conditions. Wana has been noticed for its ability to stay at the forefront of technology innovation, enabling them to provide attractive and affordable services to consumers that are increasingly technology-savvy. This model, combined with Zain’s buying power, is probably a great recipe for success. It also gives Zain its first presence in North Africa, a more developed market than the rest of Africa, where other Middle-Eastern investors (Etisalat and Qtel) have already established a strong presence.
Following this interesting first move of the year, Zain is now announcing a renewed interest in India’s booming market. Opportunities to invest are becoming rarer, and competition is already fierce, but the size of the potential market still means it is on the right side of the growth curve. Zain is said to be looking at two privately-owned operators who have yet to make their mark. India is one of the world’s most attractive markets, but also a difficult one for operators, considering the slowness of the regulatory decision process. We’ll see at our forthcoming event India & South Asia Com if Zain’s announcement is creating interest in the market.
If a deal was to be confirmed, this would be the group’s first step outside its original Middle East and Africa presence, towards its strategy of becoming a global operator. It is said to be looking at other parts of Asia as well. Going further East, there are some interesting markets with great potential in South East Asia: Vietnam, Laos and Cambodia for instance are experiencing great growth; regulatory changes are helping the sector’s development, and other international groups are showing interest. A possible future move then?
But Zain is not the only Middle-Eastern operator group looking at entering other markets. It is a noticeable trend, which has come up a lot in some of my colleagues’ conversations with local observers. The general feeling is that Zain is cleverly selective over its investments, going for strong growth markets where competition is still within reasonable levels. On the other hand, other groups are said to be spending over-the-odds for ‘trophy’ acquisitions, their main strategy being seemingly to place their logos in as many markets as they can regardless of the foreseeable returns. This will be a main focus at the Dubai event in the Com World Series to take place at the end of the year. Hopefully by then we’ll have a better idea of how investment is evolving in the region and more generally in emerging markets.
4 Mar 2009
Events still scoring highly in the marketing mix ...
Despite the current downturn, a new study has revealed that event marketing is on the rise, with 53% of 300 respondents choosing it as the best discipline for building relationships.
The EventView Report, produced by The Meeting Professionals International Foundation, Event Marketing Institute and George P. Johnson, found that face-to-face marketing activities are playing a fundamental role within the marketing mix.
The results found that 26% of respondents chose event marketing as the marketing method that generates the greatest ROI, up 4% from 2008.
“Senior marketers believe events are the mot effective medium to engage customers and move them to purchasing behaviour,” said MPI, President and CEO Bruce MacMillan.
29% of respondents also said they will “transition from event marketing to experiential marketing in the next 12 months”.
http://www.eventmagazine.co.uk/news/bulletin/newsbulletin/article/881493/?DCMP=EMC-NewsBulletin
The EventView Report, produced by The Meeting Professionals International Foundation, Event Marketing Institute and George P. Johnson, found that face-to-face marketing activities are playing a fundamental role within the marketing mix.
The results found that 26% of respondents chose event marketing as the marketing method that generates the greatest ROI, up 4% from 2008.
“Senior marketers believe events are the mot effective medium to engage customers and move them to purchasing behaviour,” said MPI, President and CEO Bruce MacMillan.
29% of respondents also said they will “transition from event marketing to experiential marketing in the next 12 months”.
http://www.eventmagazine.co.uk/news/bulletin/newsbulletin/article/881493/?DCMP=EMC-NewsBulletin
23 Feb 2009
Post Barcelona, plenty left to discuss about emerging markets
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.
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.
16 Feb 2009
Will the global economy cloud the annual telecoms fest in Barcelona?
There’s no escaping talks about the global economic downturn. As the main news in the UK this morning was the loss of another 850 jobs after the closing of a Mini car factory near Oxford, the world of telecoms too continues worrying about the downturn.
The opening of annual telecoms gathering Mobile World Congress in Barcelona today gets a mention in Spanish daily El Pais, only to say that the event’s attendance is affected by companies reducing their spending: an estimated 5000 less visitors are expected and, according to the paper, they are “tightening their belts: less meals, less parties, and less days in the city”. This will certainly save many of the show’s visitors from reaching for coffee and aspirin after an evening of fiesta. It is also an indicator of the impact of the economy on the sector, and of its prominence in the talks to be had over the next 4 days.
Indeed, as 6 industry analysts are asked for their insights for the congress daily magazine, the economy features prominently in their choice of hot topics, albeit with varying degrees of pessimism. While Will Croft from Wireless Intelligence believes “we’ll still see the mobile sector outperform many others over the course of the year”, Dean Bubley from Disruptive Analysis is far more cautious: “there is far too much unwarranted optimism at the moment. The economy will affect consumers’ price consciousness (…), operators will look closely at suppliers’ financial situation and be wary of committing to start-ups with fragile funding”.
Looking at events in the past week, it’s no surprise that industry commentators are looking at the economic situation in the telecoms sector. A number of operators have announced a fall in revenues (Singapore’s Starhub, Elisa in Finland among others), while major names on the equipment side are still making news with job cuts and profit warnings, not to mention Nortel’s Chapter 11 move causing huge controversy with its supplier Alvarion over a considerable unpaid bill.
However, the picture isn’t all bleak. In emerging markets, some operators have announced new investments in their networks, going against the general cost-cutting mood. Tele2, the Swedish telco, announced last week it was to spend $131.8 million in 2009 for its service expansion plans in Russia. Indian-based Tata Communications announced $430 million in investments across Asia-Pacific, to build a new data centre in Singapore and complete the Intra Asia cable that runs from Japan to South East Asia. In Africa, submarine cable projects are still going strong, both in East Africa and to connect West Africa to Europe. In many of these markets, the main focus is to secure reliable international connectivity with sufficient capacity to deliver broadband access to end-users and profitable corporate consumers.
One of the first sessions in today’s debates in Barcelona was about access to broadband in emerging markets. The question of international connectivity was unfortunately not the main focus, but the mood was positive about the demand for broadband services in Africa, Asia and Latin America. The panel included speakers from India’ Idea Cellular, Malaysia’s Maxis, and Sri Lanka’s Dialog, all forecasting great opportunities for mobile broadband over 3G and HSPA.
So is it safe to say that emerging markets will be immune from the economic downturn thanks to this growing demand for broadband services? The jury’s out. While today's panellists seemed to think there will be strong enough market demand to support their revenues, their positive stance may have been influenced by the possible presence in the audience of members of the press and possibly their shareholders. On the other hand, I was recently reminded by an operator based in sub-Saharan Africa that in very low income markets, telecoms spending will be seen as even more of a luxury in times when households struggle to purchase even basics like food. Another factor affecting operators in this time of financial crisis is the growing difficulty in securing funding for operators’ expansion plans. The companies who recently announced their investment plans had probably planned them early enough to avoid the consequences of the banking crisis. Only last week,it was reported that Econet Wireless in Kenya had experienced great difficulty in confirming a loan that was necessary for the launch of its new network (branded Yu)
It will certainly be interesting to follow the evolution of operators’ strategies for emerging markets as the global economic situation becomes clearer as the year advances. I look forward to hearing discussions in future events such as East Africa Com and Eurasia Com in April, India & South Asia Com in May, or West & Central Africa Com in June.
The opening of annual telecoms gathering Mobile World Congress in Barcelona today gets a mention in Spanish daily El Pais, only to say that the event’s attendance is affected by companies reducing their spending: an estimated 5000 less visitors are expected and, according to the paper, they are “tightening their belts: less meals, less parties, and less days in the city”. This will certainly save many of the show’s visitors from reaching for coffee and aspirin after an evening of fiesta. It is also an indicator of the impact of the economy on the sector, and of its prominence in the talks to be had over the next 4 days.
Indeed, as 6 industry analysts are asked for their insights for the congress daily magazine, the economy features prominently in their choice of hot topics, albeit with varying degrees of pessimism. While Will Croft from Wireless Intelligence believes “we’ll still see the mobile sector outperform many others over the course of the year”, Dean Bubley from Disruptive Analysis is far more cautious: “there is far too much unwarranted optimism at the moment. The economy will affect consumers’ price consciousness (…), operators will look closely at suppliers’ financial situation and be wary of committing to start-ups with fragile funding”.
Looking at events in the past week, it’s no surprise that industry commentators are looking at the economic situation in the telecoms sector. A number of operators have announced a fall in revenues (Singapore’s Starhub, Elisa in Finland among others), while major names on the equipment side are still making news with job cuts and profit warnings, not to mention Nortel’s Chapter 11 move causing huge controversy with its supplier Alvarion over a considerable unpaid bill.
However, the picture isn’t all bleak. In emerging markets, some operators have announced new investments in their networks, going against the general cost-cutting mood. Tele2, the Swedish telco, announced last week it was to spend $131.8 million in 2009 for its service expansion plans in Russia. Indian-based Tata Communications announced $430 million in investments across Asia-Pacific, to build a new data centre in Singapore and complete the Intra Asia cable that runs from Japan to South East Asia. In Africa, submarine cable projects are still going strong, both in East Africa and to connect West Africa to Europe. In many of these markets, the main focus is to secure reliable international connectivity with sufficient capacity to deliver broadband access to end-users and profitable corporate consumers.
One of the first sessions in today’s debates in Barcelona was about access to broadband in emerging markets. The question of international connectivity was unfortunately not the main focus, but the mood was positive about the demand for broadband services in Africa, Asia and Latin America. The panel included speakers from India’ Idea Cellular, Malaysia’s Maxis, and Sri Lanka’s Dialog, all forecasting great opportunities for mobile broadband over 3G and HSPA.
So is it safe to say that emerging markets will be immune from the economic downturn thanks to this growing demand for broadband services? The jury’s out. While today's panellists seemed to think there will be strong enough market demand to support their revenues, their positive stance may have been influenced by the possible presence in the audience of members of the press and possibly their shareholders. On the other hand, I was recently reminded by an operator based in sub-Saharan Africa that in very low income markets, telecoms spending will be seen as even more of a luxury in times when households struggle to purchase even basics like food. Another factor affecting operators in this time of financial crisis is the growing difficulty in securing funding for operators’ expansion plans. The companies who recently announced their investment plans had probably planned them early enough to avoid the consequences of the banking crisis. Only last week,it was reported that Econet Wireless in Kenya had experienced great difficulty in confirming a loan that was necessary for the launch of its new network (branded Yu)
It will certainly be interesting to follow the evolution of operators’ strategies for emerging markets as the global economic situation becomes clearer as the year advances. I look forward to hearing discussions in future events such as East Africa Com and Eurasia Com in April, India & South Asia Com in May, or West & Central Africa Com in June.
4 Feb 2009
Change at the head of Kenya's new mobile operator
I guess it was always going to be difficult finding a good way of taking over a blog, but I’ve been lucky with the news this week: as my colleague Joe Willcox handed this blog over to me, another figure in emerging telecoms market moved, someone I’ve crossed path with a couple of times while looking at the developments in Africa’s telecoms markets.
Michael Foley announced his departure this week from Essar Telecommunications in Kenya (formerly known as 3rd GSM licensee Econet Wireless), where he was CEO, citing personal reasons. In this position, Foley led the launch of new brand Yu, due to start services to consumers in the first week on April this year, coinciding with Informa Telecoms’ East Africa Com event in Nairobi.
Foley’s time at Essar/Yu has undoubtedly been a busy one. His job was to launch a new operator in one of Africa’s top 10 telecoms markets, applying a recipe that had until now flourished in India: building a low-cost, essentially outsourced operation and competing on price with a simple offering and a strong brand. A country-wide network was built in a record 6 months, and a new brand unveiled in November 2008 by Foley in Cape Town. He was in South Africa to give a refreshing keynote presentation at AfricaCom, in front of a captive audience including Michael Joseph, CEO of Kenya’s first operator Safaricom. A few months later, as services are set to launch in just a few weeks, he is replaced by his colleague Srinivasa Iyengar.
Foley’s tenure at Essar/Yu seems short: Kenyan newspaper The Standard notes that his resignation is happening “hardly a year since joining the firm”. Indeed, he seems to enjoy moving around. I first met him in 2006 in Tunis, where he was giving a presentation at GSM>3G North Africa (a congress now re-named North Africa Com and moved to Cairo) in his role as Chief Transformation Officer at incumbent Tunisie Telecom, a role he had taken as part of his position as Chief Commercial Officer at Emirates International Telecommunications. He then moved on to Celtel Nigeria as Chief Commercial Officer, then Celtel Tanzania as Managing Director, before joining Essar.
Reading through his profile, it seems he enjoys taking a challenge by looking after companies in times of change, as well as start-up operations and new business creation. Following his move from Kenya, I guess we could see him in one of the up-and-coming markets in Sub-Saharan Africa. A number of markets are due to see a new operator launch, or an old one go through a transformation following an acquisition. A number of them are in French-speaking countries, which is handy as Canadian-born Foley is francophone too. So the bets are open as to where we’ll see him next.
In the meantime, we’ll be looking closely at what happens to Kenya’s telecoms. Market leader Safaricom is confident in its position, thanks to a strong brand, good coverage and services that are increasing customer loyalty (mobile payment M-Pesa in particular); when asked recently where he saw his market share in 5 years time, CEO Michael Joseph said he was expecting to retain over 60%. Zain (rebranded from Celtel last year) is in a strong position as its main contender. A newcomer on the mobile market, Telkom is banking on triple play services to make its place in the market: in addition to its fixed services, the operator bought by France Telecom-Orange is now offering mobile services. With the launch of Yu, the market is likely to see a war price that will undoubtedly please the consumers, but may be difficult to sustain for the last two entrants.
Michael Foley announced his departure this week from Essar Telecommunications in Kenya (formerly known as 3rd GSM licensee Econet Wireless), where he was CEO, citing personal reasons. In this position, Foley led the launch of new brand Yu, due to start services to consumers in the first week on April this year, coinciding with Informa Telecoms’ East Africa Com event in Nairobi.
Foley’s time at Essar/Yu has undoubtedly been a busy one. His job was to launch a new operator in one of Africa’s top 10 telecoms markets, applying a recipe that had until now flourished in India: building a low-cost, essentially outsourced operation and competing on price with a simple offering and a strong brand. A country-wide network was built in a record 6 months, and a new brand unveiled in November 2008 by Foley in Cape Town. He was in South Africa to give a refreshing keynote presentation at AfricaCom, in front of a captive audience including Michael Joseph, CEO of Kenya’s first operator Safaricom. A few months later, as services are set to launch in just a few weeks, he is replaced by his colleague Srinivasa Iyengar.
Foley’s tenure at Essar/Yu seems short: Kenyan newspaper The Standard notes that his resignation is happening “hardly a year since joining the firm”. Indeed, he seems to enjoy moving around. I first met him in 2006 in Tunis, where he was giving a presentation at GSM>3G North Africa (a congress now re-named North Africa Com and moved to Cairo) in his role as Chief Transformation Officer at incumbent Tunisie Telecom, a role he had taken as part of his position as Chief Commercial Officer at Emirates International Telecommunications. He then moved on to Celtel Nigeria as Chief Commercial Officer, then Celtel Tanzania as Managing Director, before joining Essar.
Reading through his profile, it seems he enjoys taking a challenge by looking after companies in times of change, as well as start-up operations and new business creation. Following his move from Kenya, I guess we could see him in one of the up-and-coming markets in Sub-Saharan Africa. A number of markets are due to see a new operator launch, or an old one go through a transformation following an acquisition. A number of them are in French-speaking countries, which is handy as Canadian-born Foley is francophone too. So the bets are open as to where we’ll see him next.
In the meantime, we’ll be looking closely at what happens to Kenya’s telecoms. Market leader Safaricom is confident in its position, thanks to a strong brand, good coverage and services that are increasing customer loyalty (mobile payment M-Pesa in particular); when asked recently where he saw his market share in 5 years time, CEO Michael Joseph said he was expecting to retain over 60%. Zain (rebranded from Celtel last year) is in a strong position as its main contender. A newcomer on the mobile market, Telkom is banking on triple play services to make its place in the market: in addition to its fixed services, the operator bought by France Telecom-Orange is now offering mobile services. With the launch of Yu, the market is likely to see a war price that will undoubtedly please the consumers, but may be difficult to sustain for the last two entrants.
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