Category Archives: mobile

Mobiles – luxury or basic good?

Just a few days ago I posted a few links to interesting numbers about the growth of the mobile phone industry.  According to the ITU, we are expected to finish the 2008 with 4 billion mobile cellular subscribers, which supposedly represents over 60% of the world population and indicates growth rates of 25% annually for the past 8 years.  Even though i don’t know the details of how the ITU collects its statistics and how it addresses issues such as multiple subscriptions owned by a single individual (there are countries with over 100% penetration of mobile, primarily due to the billing models applied in those countries), the numbers are certainly impressive.

Probably even more interesting, Millicom, a Luxembourg based mobile provider that operates in South Africa, Africa, and Asia, has released numbers indicating “92% year-on-year increase to 7.58 million subscribers from its seven African operations as at 30 June 2008″ (source).  On average, the emerging economies where Millicom is operating showed a very impressive, and consistent with the ITU statistics, growth of 58% within a year.  These and other similar numbers can be found in numerous reports published in the recent years (you need paid subscription to get most of them though, here is a snippet of a free one) and the forecasts are rather optimistic.

Such an overwhelming penetration rate generated a fare amount of discourse that would picture mobile phone as a basic, almost necessity, good.  Indeed, communication is a very fundamental human activity and a device enhancing it to such extend as the mobile phone does, can easily be pictured as similarly fundamental.  For example, the ITU report mentioned above links the mobile phone penetration with achieving the MDG goals, thus linking it to socioeconomic development (without describing an exact mechanism though).

However, as of a few weeks ago the world has entered a financial turmoil.  Just a few days ago, the Washington Post published the following article suggesting that the growth estimates for the mobile phone industry will have to be adjusted:

While industry executives often say mobile phones are the last thing consumers will give up to save money, analysts are now citing lengthening phone replacement cycles and weakening economies around the world for their weaker sales estimates.

UBS analyst Maynard Um halved his forecast for 2009 global handset growth to 3 percent from 6 percent, pointing to particular weakness in Europe and North America.


Handset market leader Nokia warned early last month that the mobile phone market would be hurt by weakening consumer confidence in many markets in 2008 and the company itself would lose market share in the third quarter.

All this got me thinkingthat my initial intuition a few years ago was correct.  In 2005 I spoke at an industry conference dedicated to the “future” of telecom industry.  Back then I was surprised to hear the executives debating the next killer app, which will bring them the next stream of revenues focusing on, what i viewed at the time, margins – the very technologically advanced users in developed countries.  The point I tried to make in that presentation was that there is enormous business potential in the developing countries (and apparently I was right).  Moreover, I was trying to make a case for cheap, durable, and simple technology as opposed to expansive, gentle, and (many times unnecessarily) sophisticated one.  Now I understand that I was trying to explain a dissonance between the rhetoric of mobile communication as a basic good and developing handhelds and applications that were in fact luxury.

I think now it all falls in places.  Now, it seems that the market is highlighting this dissonance.  People are not going to stop communicating and it will be difficult for them to give up the convenience of mobile communication.  However, as people start viewing mobile communicaiton as a basic good, they start treating it as such and start voting with their wallets for cheaper, simpler, and more durable technology that would answer their basic need first.  And the economic environment, particularly in the developed countries, is currently enhancing this process.  All the extra functionality is becoming a luxury and there is only so much space for competition in the luxury market compared to the market for basic goods.  It will be definitely interesting to see how this situation unfolds.

Eyes on Africa

Some time ago I shared my thoughts about Africa’s potential as the next Asia in terms of socioeconomic development, particularly when it comes to the MICT related issues.  Recently I have encountered a couple of observations that support this intuition.

First, it seems that mobile equipment manufacturers and service providers discover more interest in the African market.  Here are a number of examples: MTN, the South Africa based telecom was recently voted as the most preferred place to work for in Uganda; originally Kuwaiti Zain group has announced that is going to invest “$1bn per annum in Nigeria till 2011″; Nokia is about to ship 3G enabled phone with Amharic interface to Ethiopia; and Telecom Kenya is about to start selling iPhones in the country under the Orange brand.  Some of these moves can be of course viewed as political, but nevertheless, i think they indicate a development in the African telecom market.

Second, I am noticing that a number of countries in the region are taking off in terms of their activity in the field of telecom.  For example, Egypt is becoming a major telecom hub in the region.  Here is an article suggesting that it is becoming Africa’s leading market.  But not only that.  It is also becoming a major venue for international telecom policy debates.  Just a few months ago it hosted ITU Telecom Africa, later this year it is going to host a major ICANN meeting, and it has a record of hosting other internainal telecom related events in recent past.  Also, South Africa, a more veteran leader on this scene, has been hosting telecom related venues with global impact such as the upcoming World Telecommunication Standartization Assembly (WTSA).  Again, I realize that the processes in Egypt are probably due to the efforts of the Mubarak family, which seems to be in a not very stable political situation.  Nevertheless, it is bringing more of the global policy debates to the continent, which contributes to my argument of Africa starting to play a more prominent role.

Have you had any observations like that?  Do they make sense?  Or have you encountered information that supports/chllanges my observations?  Please share.

Going mobile…

The “Pew Internet and American Life” project just published an interesting report about the use of mobile access to data and information. According to this report over 40% of the adult Americans have used mobile Internet access and almost 60% used non-voice services on their mobiles.

They show some interesting trends in people’s readiness to give up information technologies. If in 2002 only 38% said it would be very hard to give their mobile phone, in 2007 this number jumped to 58%. At the same time the percentage of people who find it very hard to give up television went from 47% in 2002 down to 43% in 2007. Even more interesting is the percentage of people who think that it would very hard to give up a land-line. That went down from 63% in 2002 to 40% in 2007, which actually is consistent with notions that more and more people are giving up land-lines. Also interesting is the willingness to give up email. The percentage of those finding it very hard to give up their email went from from 35% in 2002, to 34% in 2006, to 37% in 2007. Although there is no clear trend here, it seems like email is keeping a rather stable position in the communication lives of adult Americans using email. I wonder thought, if the situation with young Americans is any different though. The Pew report does not survey people younger that the age 18, yet, there are some trends noticeable even in the available data. The summaries presented in the report clearly show that the younger people are more willing to experiment with technology. For example the difficulty to give up internet and mobile phones grows as the age goes down, while the difficulty to give up land-line and television is growing with the age. I find this fascinating!

The interesting aspect of this increasing mobility however, is the actual type of activity. According to the report text messaging is leading the way with 31% of the users performing this activity on a typical day. The next most popular activity is picture taking with 15% of the users reporting doing so. To me, the latter point is particularly interesting in light of my recent post on digital photography. Pew data shows that 58% of the users tried taking a picture with their mobile device (same percentage as that of people who tried sending a text message), but only 15 view that as part of their typical day (as opposed to 31% mentioned above). It seems to me that my intuition about mobile photography was right.

When it comes to the types of activity, the younger people are really standing out. As i mentioned earlier, they are more willing to experiment with technology. Yet, they are also using more technology in general. Here again, text messaging is the leading activity (60% of 18-29 years old reported it to be part of their typical day) with taking pictures (31%), playing music, playing games (both 16%), and consuming news (14%). I find the last point particularly interesting from the societal point of view and also because this activity seems to be really distinct for this age group (only 7% of 30-49 years old, 3% of 50-64 years old, and 1% of 65+ years old reported that kind of activity as part of their typical day).

There is more demographic and especially racial specifics discussed in the report. Very interested and rather concise read.