For Mobile Web, "Developed" and "Developing" Markets Are the Same

Is “Developing Market” a meaningless term where it comes to use of the mobile Web? Declan Lonergan, Yankee Group analyst, thinks so. That doesn't mean the markets are identical. Developing markets rely on handsets whose monthly cost is $5, developed market users often pay $40 to $80 a month.

Despite those differences, consumers everywhere want access to the mobile Web. When they get it, their usage profiles are surprisingly consistent, Longergan says.

The top 10 countries for Opera Mini usage during June 2009 were Russia, Indonesia, India, China, Ukraine, South Africa, U.S., U.K., Poland and Nigeria. India continued to move up the rankings, overtaking China for third place, Opera reports. These results demonstrate the huge appetite for access to the mobile Web in developing markets.

Yankee Group in 2008 found use of the top-10 most popular mobile phone services were almost identical in developed and developing regions.

Penetration of mobile Web browsing in the Gulf (11 percent) and in Europe (14 percent) was also very close.

América Móvil (AMX) as a point of reference. AMX is a leading provider of mobile services in Latin America, with subsidiaries in 18 countries including Brazil, Argentina and Colombia. As of June 30, 2009, it had more than 190 million mobile customers and three million land lines in the Americas. In most countries, AMX targets primarily low-ARPU prepaid customers. It has 42 percent mobile customer market share in Latin America. Its closest challenger is Telefonica with 29 percent.

The differences between developed and developing markets are small, Lonergan says. The most successful services are consistently messaging (dominated by SMS), mobile broadband, personalization (ringtones) and mobile Web. Mobile Web use is being driven by consumers accessing social networking sites like Facebook.

AMX is emphasizing mobile social networking by providing access to brands like Facebook, MySpace and Orkut (Google) in Brazil. It also offers branded chat, photo and video blog services. AMX’s subsidiaries Telcel and Comcel provide public photo- and video-sharing sites.

Telcel offers a B2C interface that allows amateur contributions to be uploaded and purchased.

The most frequently visited sites by customers using Vodafone’s mobile Internet service are Facebook, Google, BBC, YouTube, Windows Live, Bebo and eBay "We can conclude, therefore, that operators in developing and developed markets are offering broadly similar MI service portfolios," says Lonergan.

But some differences will persist, particularly when we focus on the least advanced markets. The use of SMS is one example. In sub-Saharan Africa, SMS remains a critical platform for service innovation and will continue to be the focal point for local entrepreneurial initiatives.

Mobile data services account for 15 percent of AMX’s revenue today while European operators typically achieve 20 to 30 percent.

"In our conversations with various players throughout developing regions, we have heard evidence of average consumption of up to 1.5 GB per month per user," says Lonergan. "This is close to levels generally seen among low-end users on land line connections."