Mobile Internet Revolution for South Asia

Mobile application developers and high-bandwidth wireless data network operators are being dramatically boosted by latest innovations, growing popularity and rising demand of smartphones such as iPhone, Blackberry, Palm Treo and other mobile platforms. Some 10 percent of phones shipped worldwide — and some 19 percent of phones sold at retail in the United States — are smart-phones. Taiwanese smartphone maker High Tech Computer Corp. (HTC) expects its sales in India to double in 2008, from 100,000 in 2007 to 200,000 in 2008. Although reliable figures are not available, Blackberry is finding traction in Pakistan and HTC is promoting its low-cost smartphones. Overall, there is room for substantial growth. In terms of wireless voice and data, markets with large populations and relatively low penetration rates, such as India, China, Philippines, Pakistan, Vietnam and Indonesia, will continue to grow at a rapid rate, according to an Aug 2008 report by Paul Budde Communication Pty Ltd.

Each platform provider is vying for greater developer mindshare and faster wireless networks to add value to its device and gain market share to become the standard in mobile computing and communication. These developments are pulling together all of the necessary ingredients for explosive growth of mobile internet business in the coming decades. Though it's early, this ongoing mobile platform revolution could easily eclipse the PC and Internet revolutions of the 1980s and 1990s. The reason is simple: The cost and convenience of mobile devices makes them much more affordable and useful to a much larger population of the world today.

In an earlier post titled Mobile Internet for Pakistan, I wrote as follows: With the personal computers and the Internet penetration in Pakistan in single digit percentages and the mobile phone penetration approaching 50%, should Pakistanis still aspire primarily for the Western style PC/Internet access model? The answer to this question is clearly a resounding NO. Here is an opportunity for a strategic leapfrog to ubiquitous Internet connectivity via the most prevalent device owned by the largest number of people--the mobile phone. It makes sense from many perspectives: Device cost, connectivity options, electricity availability, usefulness for the vast majority of people, etc.

So what would the mobile internet do for people? Many consumers already use programs that come with their phones to send text messages, browse the web or take and email pictures. In addition to standard widgets like time, temperature, stock prices, and maps, Apple is offering an iTunes like online store called AppsStore that lets users download and install applications. iPhone owners can install programs that let them tune into Internet radio stations or get directions to the nearest gas station.

In future, phones will be able to do a lot more. For example, San Jose Mercury quotes analysts as saying:

1. By simply using your phone's camera to take a picture of a bar code, you will find out instantly whether the store across the street or one online is selling a coffee maker at a lower price than the store you are at.

2. Whenever your bank account dips below a certain balance, your phone will notify you — and allow you with one click to instantly move more money into the account.

3. If you have a medical device implant, you will be able to use your phone to instantly and automatically alert your doctor to any troubling conditions.

4. Your phone will be able to tell you when you need to leave your house or office to make an appointment on time, given existing traffic conditions along your route.

As PC-like standards emerge in the mobile space and all-you-can-eat data services become inexpensive , the natural progression toward cloning and commoditization will happen, thereby making highly useful and multi-functional mobile platforms more affordable and ubiquitous in emerging markets such as India and Pakistan.

Mobile Internet in South Asia

When Intel puts its weight behind an initiative, it automatically gets a boost. But when Google and Intel together join forces, no one in their right mind can bet against such a combined force. Mobile Internet with broadband access has achieved that inevitability with Google backing a Wimax joint venture between wireless veteran Craig McCaw's Clearwire and Sprint-Nextel. In addition to Intel and Google, this venture is also supported by Comcast and Time-Warner.

As the world goes mobile, Intel's objective is to extend its leadership position in platforms used to access the Internet. Google is aiming at capturing the huge market for mobile advertising that is likely to grab a increasingly larger share of online advertising revenue.

The wireless carriers such as Verizon and AT&T have long been busy building walled gardens and controlling the distribution and content of mobile platforms. On the other hand, Intel and Google have long been arguing for an open model similar to the Internet access by PCs where the consumer is in charge. Such a model would obviously benefit both Intel and Google to extend their current dominance in the desktop/laptop user market into the mobile Internet space. Now the two giants appear to be succeeding with the roll-out of the Wimax network and Sprint-Nextel's willingness to work with them to beat Verizon and ATT Wireless as the incumbent carriers.

According to Wall Street Journal, the WiMax venture will create a network that potentially covers 120 million to 140 million people in the U.S. by 2010, the companies said. The venture, valued at more than $12 billion, will have a two-year head-start on rivals Verizon Wireless and AT&T Inc., which are just beginning to sketch out plans for their next-generation wireless networks.

While the potential for Wimax in the US market looks very good, I believe the really big opportunity is in the emerging markets, such as India and Pakistan, where the mobile phone has achieved greater than 50% penetration and the PC/Internet penetration remains in single digits. South Asia is witnessing some of biggest deployments of Wimax with a lot of consumer interest in both fixed and mobile broadband.

According to Juniper Research, South Asia will be the driving force behind the growth of Mobile WiMax, or the 802.16e standard. The Asia and Australia regions are expected to account for more than 50% of the total WiMax deployments by 2013.

Pakistan, being among the first countries in the world to roll-out a functional WiMax service, is experiencing tremendous growth in demand after Wateen Telecom’s launch of its WiMax service and roll-out plans announced by Mobilink.

India's state-owned Bharat Sanchar Nigam Limited is rolling out a Wimax network for broadband access in response to government requirement that 20 million broadband lines be in service by 2010.

Given the pent-up demand for the Internet access and the ubiquity of mobile phones, Wimax roll-out will likely spur the largest adoption of mobile Internet in South Asia first.

Related Link:

State of Telecom Industry in Pakistan