The changing game of wireless

25 Jun 2009

It has been a common notion in the wireless industry that developed markets in the region - for instance Japan, Singapore and Hong Kong - are ones most primed for innovation. As their economies grew, incomes increased subsequently and hence consumption patterns evolved through the years.

We have, in the past, observed that consumers in developed markets generally spend more on higher-end devices such as smartphones and PDAs. More importantly, there has been an understanding that usage patterns of 3G and wireless tend to be more "advanced" among these consumers, as they leverage the efficiencies of 3G wireless technology to access not only voice and SMS, but also accessing Internet and various services.

While such observations are certainly valid, they negate another important consideration - that similar consumer preferences in devices, and the demand for data-centric wireless services are similar in "emerging" markets as well. And, it is this aspiration that is spearheading much of the growth in 3G globally, which is the general view among most research organizations.

So, what does this all mean to our industry‾ The truth is, in an age where mobile devices have become a personal statement, consumers in all markets still aspire to the latest trendy devices. Whether a country is a developed or emerging market, consumers and businesses still have that burning desire to be connected through voice, email and the Internet. Needless to say, this obviously generates significant opportunities for operators to grow their business - beyond mere aggregation of subscribers.

Currently, much of the competition among operators in the region revolves around simple voice and SMS offerings. While this has, in the past, provided significant revenue for operators, new paradigm shifts in how information and services are accessed will redefine how our industry makes money. In fact, this is already becoming an issue -- Ovum cited recently that ARPU will decline at the same time subscriber growth and usage increases .

There is a need for service providers to look beyond competitive voice and data pricing to ensure longer-term survival and prosperity. Rather than perceiving customers as one uniform entity, it is increasingly necessary for operators to look at segmenting their device and service offerings to ensure that the needs of each customer demographic are addressed.

Additionally, given the exponential business opportunities brought about by 3G wireless technology, it is also important for operators to explore new paths to profitability. In an age where non-technological companies are leveraging wireless technology and become a mobile virtual network operator, to create new products and service for its users, it is necessary for operators to assess its relationship with the customer - or risk becoming a wholesaler of bandwidth. Increased involvement in the selection of devices and applications will be key, as it would enable greater operator engagement with their customers and solidifying their loyalty to the brand. Ultimately, this will ensure that the operator maintains the current high level of relevance with subscribers, delivering greater returns in the long term.

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