By Monica Zlotogorski, Editor of TM Forum’s Inside Latin America and Vice Chair of TM Forum’s Latin America Advisory Board
When my grandfatheremigrated from Europe to Latin America in the early 1930s, he had verylimited means to communicate with the family he left behind. It tookhim 30 years to reunite with his mother and sisters living in theUnited States. Two generations later, we are still a family ofimmigrants, but thanks to progress in technology, I have had thewonderful opportunity to be part of my 5 ½-year-old niece’s life and“witnessed” (although virtually), my nephew’s birth this past April.
ThroughSkype, e-mail, SMS and many other ways to stay connected, I've beenable to stay close, despite the physical distance, with long-timefriends or develop new business relationships across the globethroughout the years.
The development of social networks hashelped people and companies in emerging markets to stay connected to agreater degree. More than eight out of 10 Internet users in LatinAmerica use online social networks. Social networks like Facebook, Hi5 and Orkut are rapidly growing in Latin America.Sometimes social networks used in emerging markets are home-grown.Moreover, according to Qzone (the leading Chinese social network),neither Facebook nor MySpace nor any other international socialnetworks can claim to be the single largest one in the world. Theworld's largest online social network: Qzone.
Social Networks Open Opportunities
While in developed markets we care about how to send pictures to our“BFF” or download the latest music hits or mobile games via our mobilephones or broadband connection, in emerging markets there’s anotheraspect to it that has more to do with social importance. For example,mobile data services can facilitate access to agricultural information,health care and money transfers (mobile banking).
A Pyramid Research report(the research arm of Light Reading Communications Network), “HealthcarePrograms in Emerging Markets: Opportunities for Mobile Operators,”concludes that “mobile technology's low cost and ease of use make itideal for improving the delivery of healthcare, education and othersocial services in emerging markets, opening up opportunities formobile operators and vendors.” The report suggests that “Africa andIndia are particularly prominent in the use of mobile technology forsuch causes, and there are encouraging results that suggest that theseprograms are having a substantial impact… The supporting roles ofmobile operators and vendors enabling various applications are alsocreating new opportunities.”
In a recent special report issued by The Economist(“The Power of Mobile Money: A Special Report on Telecoms in EmergingMarkets,” September 24, 2009), the importance of mobile penetration andits social impact is apparent. “… at current rates of growth it seemslikely that within five years, and certainly within 10, everyone in theworld who wants a mobile phone will probably have one.” The next stepis to enable Internet access, and thanks to the combination oflower-cost of laptops and cheap netbooks and mobile broadband (and alsothanks to the development of pre-paid billing systems), the connectedeconomy will become a global experience (according to Informa, therecould be 1.4 billion mobile-broadband subscribers five years from now).Still, the cost of access devices is too high for the purchasing powerthat some emerging markets can afford, but we appear to be on the rightpath.
According toa recent study, the addition of 10 mobile phones per 100 inhabitants indeveloping countries can contribute to an increase in GDP perindividual of 0.8 percent. The same report by The Economistreminds us that “in 2000 the developing countries accounted for aroundone-quarter of the world’s 700 million or so mobile phones. By thebeginning of 2009, their share had grown to three-quarters of thetotal, which by then had risen to over 4 billion.”
Thepower coming out of emerging economies goes beyond having more peopleconnected to mobile devices. The appearance of powerful enterprisesborn in those markets continues to develop. China’s two leading telecomequipment makers, Huawei and ZTE, are no longer viewed as low-cost,low-quality manufacturers anymore and have started to expand beyondemerging markets. Furthermore, ZTE already stated at the Telecom World2009 trade show that it intends to rank among the four biggesttelecommunications equipment manufacturers in the next three years, andwithin the next five to six years, its target is to get to at leastnumber three. Another example is the Egyptian Orascom Telecom that isnow providing services in Italy, Greece and Canada, or perhaps ChinaMobile, which has already established a presence in Pakistan and islooking into other markets in Asia.
With more and more peopleconnected to mobile networks and many home-grown corporations comingout of emerging markets and going global, can we predict what the worldwill look like in 10 years? Maybe not, but one thing I know for sure,the communications industry had a lot to do with how the world has beenshaping up in the past few years. “In the grand scheme of telecomshistory, mobile phones have made a bigger difference to the lives ofmore people, more quickly, than any previous technology… Mobile phoneswill have done more than anything else to advance the democratizationof telecoms, and all the advantages that come with it.”
I didn’t say this; it was The Economist.
Thetruth is social networking has the potential to create numerousopportunities within emerging markets for mobile service providers,application and software developers and other players within the valuechain. In future articles, we'll explore these opportunities in greaterdetail and shine a light on the innovative and original strategiesbeing played out in regions all over the world.