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Telcos risk losing ground in emerging markets mobile data battle

Date: Mon, 08/15/2011 - 16:05 Source: Ovum press department

Mobile operators in emerging markets need to make urgent adjustments to content strategies if they are to adapt to rapid shifts in the market, according to Ovum
Telcos risk losing ground in emerging markets mobile data battle

Mobile users in Johannesburg, South Africa

Image credited to GSMA

Photographer: Guy Daniels

In a recently report, the independent telecoms analyst claims that while telcos are currently the dominant force in the emerging markets mobile content space, this is set to change due to strong competition from new platforms such as app stores.
Angel Dobardziev, Ovum analyst and author of the report, said: “Unless telcos make rapid changes to their strategy and execution, their dominance is set to be challenged.
“We have found that once a consumer has bought a data access plan, they begin to move away from telco services. This is being heightened by the fact that many device and platform vendors are establishing alternative content distribution platforms that connect providers and end users easier, faster and cheaper than telcos. This will ultimately reduce the role of mobile operators to little more than providers of bandwidth.”
According to the report, while the emerging markets mobile data space will grow significantly in the next five years, it is still highly immature, with less than a fifth of mobile users currently venturing beyond SMS, ringtones and logos. Meanwhile, it claims that feature phones will be the key mobile content battleground in the short-term as smartphone use in emerging markets will continue to be limited until at least 2013. 
Dobardziev continued: “Telcos currently have mobile content strategies that are increasingly inadequate for addressing the new challenges and competition they now face. The key issue is one of strategic clarity on whether telcos plan to make money from bandwidth, mobile content or both. This issue goes to the core of the bit-pipe versus full service provider debate.”
The report states that focusing on mobile bandwidth and making a fair return on billing for content could be a profitable strategy for telcos, unattractive as the bit-pipe role may be. The other option is to develop a well-executed content strategy, which will require a significant change in mindset and considerable investment in IT, people and processes in order to facilitate a well-executed mobile content strategy.
Dobardziev concluded: “What is not an option for telcos is to carry on pursuing both access and content strategies but failing to do either effectively.”

 

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