The Role of Mobile Internet in Emerging Markets

The amount of internet connected mobile devices in the world’s emerging markets is growing rapidly. The main reason for this development is lowered production cost for feature- and smart-phones is dropping so fast. Today, highly sophisticated handsets are within reach even for people with a very low income. Prices at around $50.00 for a feature-phone is not uncommon. This development makes it possible for a huge number of people from low-income households to get access to the Internet for the first time. Unlike their counterparts in the developed world, their first encounter with the Internet will not be on a desktop computer, but rather through a mobile device. Today, lower income groups from developing countries are purchasing mobile phones in incredible numbers.

One example is Ranvir Singh of Uttar Pradesh, India. In a recent issue of The Economist, Singh’s described how his milk delivery business rose by 25% after acquiring a mobile phone. His clients can now call him to place orders. In the past, he personally had to visit clients to schedule deliveries.

In the Philippines the mobile technology development was born out of necessity. As a consequence, the country has become a leading player in mobile technology development over the past decade, according to an article in Yahoo Philippines.

Because of the country’s geography, people traditionally had to wait 10 to 20 years to get a regular land line (compared to 3 weeks in the U.S.). In the distant villages the situation was even worse. Filipinos would have to line up to use a public land line in the city center. Today, almost every maid, driver and family in the province own their own mobile phone.

BRICI countries are leading the way

In a report titled The Internet’s New Billion, Boston Consulting Group (BCG) found that sales of mobile internet phones in the BRICI countries (Brazil, Russia, India, China and Indonesia) will reach 1.2 billion internet users by 2015, compared to 610 million internet users in 2009. The BRICI countries comprise of 45 percent of global GDP.

The majority of these projected new internet users will connect to the internet solely through mobile phones. Presently 1.8 billion mobile phone users are in BRICI countries. But by 2015, BCG predicts that SIM mobile phone penetration will rise by 84 percent in China, 75 percent in India, and 100 percent in Indonesia and Brazil.

With the concurrent rise of sophisticated handsets and dropping production prices, internet access through a mobile phone is becoming the most cost efficient and accessible way to connect online, compared to laptops, desktop computers and internet cafes.

Mobile internet to exceed PC and laptop internet by 2016

A separate study by Susan Huynh, published in Forrester Research World Mobile Adoption Forecast 2011 to 2016 (Global) confirms this development: By 2016, mobile internet users will exceed PC and laptop internet users. The emerging market will lead this change.

Huynh noted that mobile phone sales soared globally in the last five years. By 2016 she predicts the cost of accessing data through mobile internet will decline. This will cause mobile phone sales to exceed laptop and computer sales.

In the Philippines, Yahoo has been cognizant of this emerging market. Tommaso del Re, who heads Yahoo! Mobile in Southeast Asia, said in the Yahoo Philippines article, “In the Philippines and in the rest of Southeast Asia, there is a new wave of users who will be accessing the internet for the first time. Their experience will not be on a desktop but rather through a mobile.”

Del Re said that part of successfully tapping this market is knowing what is important to them and providing it. He said, “Yahoo! concentrates on creating digital content and experiences that connect people to what matters to them most. We’re doing this by re-imagining experiences across all devices that Filipino people choose to use, using science to create deeply personal experiences for them; and pushing for development scale and audience reach by harnessing industry standard technologies like HTML5, CSS3 and JavaScript.”

Cultural trends and relevance to sales

Part of keeping the product locally relevant involves locating in the target market and keeping abreast of culture and trends. Yahoo has an office in the Philippines and maintains an editorial team of Filipinos and has tapped on respected bloggers. It has also partnered with handset manufacturers including Nokia.

At the Global Mobile Internet Conference in Beijing last year, focus was laid on the need to keep the internet relevant to the emerging market. Online usage varies per country, economic class, culture and education level.

Rama Mamuaya of in Indonesia cited its strong culture of connection, for example, the popularity of Facebook: “Through Facebook people in remote areas in Indonesia can now stay in contact with people in their village or even worldwide,” Rama said.

The same culture of connection prevails in Vietnam, panelist Daniel Morton, CFO, Skunkworks, said. “The government didn’t officially ban Facebook but they pressured telcos to (do so).” Even in countries where Facebook has been blocked by the government, people are still accessing it through a variety of online technologies, such as Virtual Private Networks.

Now, with the inclusion of internet applications in mobile phones, this emerging market will be entering the digital age for the first time, leveling the playing field in online information access. The business possibilities for the mobile phone industry are huge. By 2015 phone sales are expected to multiply, mostly from this emerging market.

With the rise of the mobile internet industry in this emerging market, a concurrent rise in educational level is foreseen. Governments must recognize that facilitated access to information can enhance educational possibilities. This huge, potential market, with an enhanced educational level, can help millions of people out of poverty and give way for even more business opportunities in the internet industry. As the emerging market gains literacy, they will go beyond connection, music and games in their internet usage.

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