Viewpoint, Digital Divide, Emerging Markets, Global: Change is the theme of one of the leading candidates for the US presidency and it was the strongest trend in relation to emerging markets ICT development at the recent Mobile World Congress in Barcelona. Even the event name has changed…

3GSM is, of course, now Mobile World Congress, or MWC as the TLA* obsessed telecoms industry had dubbed it well before the doors opened on this year’s annual Barcelona comm fest. It’s the third time the event has been in the Catalan capital and it seems well bedded down now. The new name reflects the growing confidence of the event as much as of the industry it serves.

Even Hamadoun Touré of the ITU turned up to endorse the GSMA’s admirable Alliance Against Child Sex Abuse program and, incidentally, to demonstrate how far from the action the ITU now seems. For Touré must feel pretty sick when he sees the 55,000 Barcelona delegates flooding through the eight exhibition halls and wonders how many will turn up to the next World Telecom in Geneva. And the GSMA do this every year, not one in three or four.

Whether by coincidence or design, ITU announced the next World Telecom event to the media a week before MWC. It’s back to Geneva in October 2009 in an attempt to re-establish the event’s global credentials following the questionable move to Hong Kong in 2006.

What’s in a name?

MWC is not, of course, specifically focussed on emerging markets. Indeed it seems you now have to be careful who you use the term ‘emerging market’ with. There was a definite backlash in evidence in some sectors of the industry over its almost exclusive recent use to mean countries such as Brazil, Russia, India and China – the so called BRIC economies. Aren’t HSPA, IMS or LTE (those TLAs again) emerging markets, the argument goes. Well yes but... we’ve tried ‘high growth’ and ‘developing’ (still the best in our view!); perhaps we’ll end up changing back to the now decidedly un-politically correct ‘third-world’. After all, the third-age is now something to look forward to.

The ITU no doubt believes that its global Telecom event provides a more comprehensive forum, particularly in respect of emerging markets, than MWC, as it incorporates fixed networks. But it is unarguable that the technology which is transforming lives in emerging markets by delivering ICT services is overwhelmingly wireless. Emerging markets languished in the minor leagues of communications for over 50 years when fixed networking was seen as the only solution to digital inclusion. Monopoly operators and expensive proprietary technology solutions resulted in a business model based mainly on aid not trade.

Call us red blooded capitalists at DevelopingTelecoms, but what we observe is that it is the commercial sector which is now delivering the greatest transformation ever seen to the prospects of millions, if not billions of people in developing and emerging countries, with wireless technology which has broken through the old incumbent monopolies.

And its not just about putting a mobile phone in everyone’s hand. According to a recent survey from Deloitte, every ten percentage point increase in mobile penetration level in developing countries results in a 1.2% increase in overall GDP. People communicating more efficiently enables markets to work better which in turn enables people to use their time and energy more effectively to enrich themselves more. This is the fundamental equation now driving the unprecedented mass ICT development in emerging markets.

The GSMA’s round table on emerging markets, in which Developing Telecoms participated, addressed these issues, looking at projects in India and Pakistan run by Idea Cellular and Mobilink. But in contrast to two years ago when emerging markets seemed to hold the centre stage at the conference keynote, this year they seemed more peripheral. The truth is that no one doubts anymore the scale of the challenge and opportunity presented by emerging markets.

And yet for all this, the market has become more polarised with those companies which are committed to emerging markets taking centre stage – names like Zain, Bharti Airtel and China Mobile spring to mind. That leaves some of the others looking less relevant then ever. You feel like saying don’t miss the boat, chaps.

Vendors

The same polarisation could be said to be visible amongst vendors. By tradition (all of three years old) the ‘big boys’ are located in hall 8. The aisles there were as full as ever and the outward show of commitment to emerging markets from most was clearly visible. But the most innovative new technology for emerging markets, such as Spice Mobile’s new screenless US$20 People’s Phone, seemed to be found elsewhere.

It is easy to dismiss a mobile phone without an SMS capability, such as the Spice device, particularly when it is up against Apple’s i-phone - conspicuously absent from MWC - and innovative phones such as the Modu. The Modu is a phone about the size of your current phone’s battery which slides into a series of 'jackets' to take on, chameleon like, the properties of any number of phones.

Much hyped to the media – even the BBC featured it – I’m still struggling to find its relevance to emerging markets, priced at US$150.00 plus. And I’m not sure either how good the concept will look when sand and dirt get in the slots. Many of the people I know in emerging markets have their phones shrink wrapped to make them dirt proof.

The development of Spice’s People’s Phone has been driven entirely from one of the world’s largest emerging markets. They should know their customers, and in particular what they can afford, better than anyone. And they will also, crucially, be aware that today’s purchaser of a US$20.00 voice only handset is next year’s upgrade to a phone with SMS capability.

The focus of business for emerging markets seems to have changed, and not just from one MWC exhibit hall to another. Many of the biggest emerging market deals were from companies most of us had not heard of two or three years ago: RedKnee, C-BOSS, Brightstar, Synchronica, TJAT, MiPay. Deals are in areas like optimisation and revenue assurance at the network level; mobile search, geo-location and cash transmission in the services sector. Everything is open standards and with upstart Tier 2 and 3 MNOs and MVNOs. Another buzz was about 3G network infrastructure sharing. Not popular with some more traditional vendors, but inevitable given the economics of emerging markets service provision and a reflection of the changing balance of power in ICT development.

Convergence

One thing that seems like it is not going to change is the ever growing use of wireless to provide services in developing countries. WiMAX had the slight feel of being yesterday’s shiny new toy which has failed to keep its appeal at the show. But the fact is that no one now seriously believes that copper and fibre fixed networks are going to be of more than limited significance in emerging markets and it is wireless technologies like WiMAX which will deliver the next level of services.

Does it matter that services are now being delivered wirelessly? Convergence – whether fixed-mobile or any of several other convergence trends, makes the distinction less relevant. Service is all that matters to customers. How it is delivered and which parts of the network are wired or wireless has never been less important. The fact that fixed wire line operators, particularly in emerging markets, are turning increasingly to wireless based technologies to deliver their backhaul merely emphasises the point.

According to the GSMA’s latest figures, investment in communications in Africa alone over the next five years will be US$50 billion. That is more than the total spend during the preceding fifty years. That more than anything shows the scale of the change.

* TLA - Three Letter Acronyms. LTE was this year's new kid on the block, standing for Long Term Evolution, in case you didn’t know. Several vendors are already running trials of 'LTE Systems' and talking about it as if it was a specific technology rather than a description of something which happens over time. If something is available now it sounds suspiciously like the short term and not so much evolution as a quick fix.  Perhaps STQF can be next year's new buzz technology. I'm going to trade mark it!