According to research from Deloitte, 78% of consumers in developed markets look at their phone within an hour or less of waking up, compared to 93% in emerging markets.
While the latter points to the scale of opportunity available in emerging markets for communication service providers (CSPs), there are three main drivers for mobile growth.
Firstly, the population in emerging markets is often fast growing. Take Indonesia, for example, whose young and vibrant population exhibits favourable characteristics for growth. The country recently saw its strongest economic growth in more than three years. Secondly, for vast, rural areas within emerging markets, mobile is the only option due to low coverage of fix line. Thirdly, flexible regulation allows CSPs to implement monetization options without the red tape requirements synonymous with developed markets.
To make the most of these opportunities, mobile operators must, first of all, be in tune with the specific needs of these markets. Along with this, they must have monetisation strategies that make use of pricing, bundling and connectivity needs.
Charging for applications
The cost of creating fixed broadband connections is prohibitively expensive in some areas. Instead, money is being spent on more cost effective mobile infrastructure. As a result, mobile devices have become the primary method for accessing the internet in many emerging markets.
Mobile customers in these markets predominantly use internet connectivity to access social media sites such as Facebook, Whatsapp and Snapchat. A report from the Pew Research Center suggests that the largest percentage of users accessing social media sites came from emerging regions with the Middle East (86), Latin America (82) and Africa (76) topping the list.
The heavy use of such applications, combined with very low contract rates necessary to attract customers, has meant that operators have had to charge small amounts for application-specific data. However, pre-paid customers often avoid these charges preferring instead to use limited, zero-rated services, denying operators a valuable income stream.
To combat this, operators in developing markets, such as Vodacom (South Africa) and Tigo (Latin America), are offering attractive application bundles to migrate zero-rated pre-paid customers to fully-pay pre-paid and even post paid packages. These bundles can be grouped around any aspect of a customer’s life. Globe Philippines, for instance, offers digital lifestyle packages as an add-on.
Through offering applications bundles, operators have the opportunity to not only improve profit margins, but also build their brands and customer bases.
Preventing mobile data fraud
The application-based-charging approach means operators are even more susceptible to mobile data fraud created by DNS tunnelling or domain forging, because the incentive is high – as is the cost of data. There are often fewer safeguards in place to combat fraud. Operators need to protect their assets and make sure that offering new and innovative packages that include zero-rating of apps or domains will not create a revenue leakage.
Operators can use solutions that protect their investments and make sure only the specific expected usage of free or zero-rated packages is used by legitimate customers - and only by them.
Keeping a network operating effectively
Effectively managing cell congestion enhances the overall customer experience as well as allowing providers to create new revenue streams in emerging markets by offering priority bandwidth packages.
A Gartner survey found that sales in all emerging markets, except Latin America, saw an average increase in smartphone sales of almost 10 per cent. With such exceptional growth, cell congestion is likely to become a significant issue as providers attempt to build sufficient network capacity.
According to telecom trends analysis firm Heavy Reading, congested cells are the number one cause of network outages. Users unable to access their mobile network are likely to let their dissatisfaction with a provider be known, resulting in a damage to both reputation and customer base.
To counter this situation, providers need granular network knowledge and control to be able to accurately monitor congestion, identify those responsible, and act accordingly. These actions include having the ability to re-distribute bandwidth or increase it for customers who are prepared to pay a premium.
The lack of and/or cost of fixed line broadband connectivity in emerging markets means that many businesses in these countries rely on mobile networks for their internet and email. This presents a great opportunity for mobile operators to provide additional services to enhance their own profits.
Operators in emerging markets are starting to offer services that prioritise traffic to key business applications - such as Skype - improve bandwidths and speeds, and block apps that could reduce protection and productivity.
The Internet of Things
With a study by McKinsey highlighting that developing countries will represent around 40% of the value of the Internet of Things by 2020, there are huge opportunities for mobile operators in this market. These opportunities go far beyond simple connectivity, extending to device identification, access control and SLAs.
Although IoT is still in its infancy in emerging markets, network providers should look to get a jump on their competitors by implementing value-added services, including increased visibility, usage analytics and device functionality monitoring now.
Security-as-a-Service for consumers
Consumers and businesses in developing countries are just as likely to be targets of cybercrime as those in the developed world. According to recent research, one in every thirty mobile browsing transactions poses a security threat and one in every seven mobile app sessions is potentially risky.
A "Safe Surfing" option can protect subscribers against unwanted content and unsolicited adverts. These ads, often video, can consume large portion of quota data and can expose subscribers to unnecessary security risks in the form of "malvertising". With Security as a Service offering, operators can generate new recurring revenue, and strengthen customer loyalty by protecting users and optimizing their mobile data use.
Vodafone, for example, has taken a very proactive approach on securing the internet for their subscribers and have already launched Security-as-a-Service for consumers in Portugal, Italy, Germany, Romania, Ireland, Greece, Spain, Turkey and Albania.
Mobile data customers in emerging markets have their own unique set of characteristics and preferences. Combining these tendencies with best practices established in mature markets, it becomes clear that there is real and present opportunity for operators in emerging markets to further monetize mobile data.
Operators that move quickly to take advantage of these opportunities may well benefit from the first mover advantage and retain it for some time to come.
Maya Canetti is the Product Marketing Director at Allot Communications.