Reaching the Next Billion Customers

By: Jesse Cryderman

Now that telecommunications markets are saturated (or super-saturated) in most of the developed world, what is the next move for the agile communication services provider (CSP)? Sure, 4G LTE still has a ways to go in Europe, there is room for growth in enterprise, and premium-services and data plans will puff up revenues; but in the country each operator calls home, the number of subscribers and the absolute rate of traditional service growth is finite and constrained. Machine to machine (M2M) connectivity and the Internet of Things (IoT) offer attractive business propositions, but it’s unclear if CSPs can substantially profit from connected humidors and smart parking.

The companies who have the best chance at long-term growth have broadened their perspectives beyond their borders and consider the entire world as their marketplace. In the Information and Communications Technology (ICT) space, the real race is to attract the next billion customers, the venue is the developing world, and the baton is the mobile handset. The International Telecommunications Union (ITU) reports that 90 of the unconnected households in the world are in developing countries and, according to an Analysys Mason webinar in December, 70% of global revenue growth in telecommunications over the next five years will come from Emerging Asia-Pacific (EMAP). Figures 1 and 2 illustrate the revenue opportunity through 2018 according to Analysys Mason's perspective.

Figure 1                                                                                                          Courtesy: Analysys Mason

Other areas that are experiencing rapid growth are the Middle East and North Africa (MENA), Latin America (LATAM), and Sub-Saharan Africa (SSA). Companies like Google, Facebook, and Amazon are aggressively targeting these regions, as they attempt to attract the next billion customers; CSPs must do the same to remain agile and competitive.