Pipeline Publishing, Volume 7, Issue 5
This Month's Issue:
Wireless for Developing Markets
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Can wireless operators in emerging markets teach the West a lesson?
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By Chris Gibson

Wireless operators in emerging markets are lean wolves compared to their domesticated counterparts in the developed world. Although emerging markets present these operators with many different challenges, the cut-throat competition they face should never be underestimated.

To survive, operators across Eastern Europe, South Asia, Africa and Latin America have learned to support lean operations and rapidly deploy new services. With the pace of technological change increasing daily, this is no mean feat. Already 3G devices account for almost 50% of the handsets offered by operators in emerging markets, according to Wireless Intelligence. In addition, the uptake of WiMAX is skyrocketing. Ovum recently found that, of the 300 plus WiMAX networks globally, 66% are in emerging markets

Wireless operators must leverage economies of scale, keep up with intense competition, engage with increasingly technology-aware consumers and create innovative services if they are to survive. The lynchpin to overcoming these challenges is their operational support system (OSS), which must evolve to

Of the 300 plus WiMAX networks globally, 66% are in emerging markets.

Wireless is proving key to supporting this rapid customer uptake. Instead of deploying copper or fibre, many emerging markets are deploying wireless coverage to provide an instant broadband service. Wireless broadband is an excellent means of reaching rural or transient populations and coverage “black spots.”

support process-driven automation to reduce the cost of operations.

Building economies of scale

The first challenge for wireless operators in emerging markets is an extremely low ARPU. The estimated ARPU in India is around $8 US per month; only slightly lower than Sub-Saharan Africa, Russia and China, but around a fifth of some Western operators, according to Wireless Intelligence. However, this low ARPU is off-set by a huge potential for customer growth.

The key for wireless operators in emerging markets is accessing large, often rural populations that typically have low tele-density and thus support business models based on rapid growth and high customer subscription. For example, India covers 3M km2 and 70% of the 1.1 billion population lives in rural areas with tele-density of just 2%.

Unlike copper cable, wireless broadband equipment can be secured against theft and removes much of the cost of laying and maintaining hundreds of kilometres of infrastructure across rugged terrain. Wireless operators in emerging markets are constantly evaluating technology, looking for the best fit for their specific challenges, and OSS must support this evolution.

The OSS must also take the strain of this surging customer base. Expansion can be extremely rapid - some operators in emerging markets achieve tens of millions of subscribers within a few years and a monthly growth of one million subscribers is fairly common. The Middle East is forecast to increase its subscription base around 34% by 2012, according to Informa Telecoms & Media. Where the subscriber base already exists, as in Eastern Europe, the OSS must support consumer demands to rapidly transition from low to high revenue services.

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