Emerging Market Opps (presented by Raj Singh at Over The Air)

1. Emerging Markets
Over The Air (London)
Sep, 2010
Raj Singh
www.rajansingh.com
@mobileraj

2. Agenda
• Market data
• Case studies
• Your input!
Let’s make this a discussion

3. What the Telecom Analysts Think?

4. Where Are the Subs?
55K
200M
78M
270M 110M
747M
488M
174M
45M

5. Population ≠ Money

6. PCs Versus SIM Cards

7. Maybe Start With Youths?

8. Average Selling Price

9. Interesting Correlation

10. Smartphones Versus Featurephones

11. The Role of Mobile in Emerging
Markets

12. ME & Africa Wins

13. App Retention

14. Mobile Advertising

15. Many Business Models
Advanced Markets Emerging Markets
Premium Apps
Virtual Goods
Free
Mobile Ads
Branded
Operator
Licensing
OEM Licensing
Gift Cards

16. Common Misconceptions
• Low price, high volume?
– iPhone users :)
• Data is expensive?
– Nigeria charges $1-2 / month for unlimited data
• 3G isn’t there?
– Parts of Africa are deploying 4G; not stymied by
backward support of 2G
• Ad dollars are low?
– In India, ad dollars on mobile are higher than on PC

17. Case Study: Nokia Music
• Music publishers do not make
money outside of the top 5
countries (piracy!)
• Nokia launches Come With Music
– All you can eat full-track download
when you buy the phone
– Nokia adds $50 to the BOM and pays
$30 to the publishers/labels
(estimated)
• Available in 10+ emerging countries
and growing
Biz Model: Consumer pays, music publishers get rev-share

18. Case Study: Mig33
• Mobile social network
• 40M registered user
predominantly in SE Asia
• Revenue model driven through
the exchange of virtual goods
via operator billing
• WAP and J2ME lead!
Biz Model: Consumer pays, operator rev-share

19. Case Study: Mobile Retail (China)
• Operators are the bank
– China Mobile bills through national bank
– Vivo links with Caixa (Brazil national bank)
• mCommerce in emerging countries first?
Biz Model: Consumer pays, operator (and retail?) rev-share

20. Case Study: Micro-Prenuer
• Mobile devices were too expensive
in villages in parts of Bangladesh
• Govts in partnership with Grameen
Phone give females, subsidized
mobile devices
• Female micro-prenuers would rent
use of the phone to other villagers
(eg one phone roped to a pole in the
middle of the village)
• Enabled wealth amongst poorer
female population
• Brought mobile phone access to the
village
Biz Model: New local economies

21. Case Study: Mobile Health (Turk
Telekom)
Ministry of
Pharmaceuticals Health Hospitals
Physicians
Turk Telekom
Patients
Public
Biz Model: Consumer, Operator pay

22. Case Study: Opera Mini / Vodafone
• Opera Mini’s proxy based
approach compresses data
before it’s sent to the device
• Significant benefits for low-
speed networks and/or prepaid
markets
• Of Mini’s 60M+ subs, a majority
are in emerging markets
representing 25B+ pageviews
• Vodafone has launched Opera
Mini on it’s emerging market
handsets
Biz Model: Operator pays or Free; Search/Advertising

23. Case Study: Mobile Browsing
• Mobile is primary browsing device
• Not everyone can afford internet on
their phone so it is often shared
amongst family members
• Some emerging market phones have
integrated projectors so the screen
can be projected onto a wall (to make
a more enjoyable browsing
experience)
• Phone can be used with a Bluetooth
keyboard and mouse to simulate a
desktop PC experience
Biz Model: OEM; Operator data revenue

24. Case Study: Mobile Payments and Banking
• Much of the emerging market lacks
banking infrastructure
• Operator stores could facilitate banking
transactions through a partnership with a
real bank in Kenya (powered by M-Pesa)
• Consumers have more trust for the
operator than their bank since it is a
brand they use daily and they are already
used to depositing money onto their SIM
card
• M-Pesa has 10M registered users and
claims to manage almost 50% of all
commerce in Kenya
• 17K M-Pesa agents compared to 840
banks and 150 ATMs
Biz Model: Free, Operator rev-share

25. Case Study: Microsoft OneApp (South
Africa)
• Feature-phone app targeted at
data-cost sensitive markets
(prepaid markets)
• Similar to “SMS browsers” but
does use highly compressed
data for transport
• Access most popular services
(eg Facebook) like Opera Mini
but with even more
compression; uses server-side
rendering (Microsoft DeepFish)
Biz Model: Consumer pays data, operator rev-share

26. Case Study: Nokia Life Tools (India)
• Suite of services /
information targeted at
India’s farmers
• Real-time prices for
subsidies (eg fruit, wheat)
• Real-time prices for
farmer’s needs (eg
pesticides)
• Weather reports for farm
planning
Biz Model: Consumer pays data, operator rev-share

27. Case Study: USSD (Brazil)
• 2G networks and prepaid data
make browsing the internet
expensive
• Mobile-XL, Shorthand Mobile,
Eyeline.mobi offer J2ME apps
that effectively create a UI using
SMS for transport (instead of
data)
• Think front-end UI to SMS
services like Google Search
• Great success in 2G countries –
drives cheaper SMS volume
Biz Model: Consumer pays SMS, operator rev-share

28. Case Study: Facebook Zero (And Friendster)
• Philippines and others charge for 1-
day of data access (50 cents est.) for
unlimited access to a service (eg
Friendster)
• Significant revenue stream for
Friendster and other popular services
(represents more than even the
desktop website in advanced
markets)
• Operator drives data subs with longer
term goal of moving to post-paid and
de-commoditizing (with dual-SIM
phones)
• Facebook offers same promotion (like
Friendster) but forgoes the rev-share
• Facebook Zero takes it a step further;
use FB to get subs hooked to data!
Biz Model: Free!

29. Case Study: Blackberry Messenger (Colombia)
• Even SMS can get
expensive
• Use BBM and I can message
my friends for free
• Offered via operators for a
monthly tariff
• Has had great success and
why BB is the #1
smartphone in much of SA
Biz Model: Consumer pays for BBM plan, operator rev-share

30. Case Study: SMS GupShup (India)
• SMS driven social network
launched in the past 2 yrs
(when Facebook, Orkut and
others were already present)
• Represents 7-8% of all SMS
volume in India
• Revenue generated via SMS
group sponsored ads

31. Other Case Studies
• Dual-SIM phones (commoditize operator) with
flash lights
• Youth journalism in Kenya
• Send email via SMS in the Philippines
• Bicycle charge kit to recharge your phone
• Mobile banking in South Africa with MTN
• Telemedicine in India
• China to be Android’s #1 country
Biz Model: Consumer pays, operator rev-share

32. Why Go Emerging?
• Younger and larger audience = larger social
graph
• Very high mobile engagement
• Less competitive
• Cheaper data (no phone subsidies), and
fast(er) networks coming!