Developing countries gain mindshare

08 Jan 2007

There were plenty of interesting news developments at the recent ITU Telecom World 2006 event in Hong Kong, but one of the most intriguing was also one of the most subtle: the emergence of the developing world as a significant market force.

Sure, there were plenty of new electronic devices to examine, numerous new technologies to evaluate and lots of deals being discussed among the major players in Asia, Europe and the Americas. But there was also an undercurrent of realization that emerging markets in Asia and Africa hold the key to future industry growth - and that major telecoms vendors should position themselves to embrace these markets, not ignore them.

In part, this is a reflection of market maturation: as developed markets become saturated, it only makes sense to search for new opportunities in the less-developed world. But it also reflects an interesting dose of realism. Many rural telecom markets in Africa and Latin America, for example, lack the legacy systems in place in Asia, Western Europe and the US, so it's actually easier to wipe the slate clean (there being no slate at all in some circumstances) and move forward with wireless installations and next-generation network development.

However, at ITU World there also seemed to be a growing consensus among top industry executives that focusing on the needs of developing nations and markets doesn't just make good business sense, but that it's also a social responsibility. The notion that even the world's most economically deprived citizens have a right to the education al and social benefits high-speed broadband can bring is a refreshing notion, and one that is not often expressed in free-market bastions like the US.

Cisco's CEO John Chambers, for example, devoted part of his keynote address (as well as part of a follow-up press conference and part of his talk at a swanky evening cocktail party) to noting that business growth in 160 emerging markets is outpacing developed markets. Chambers added that his top priorities are bringing Cisco's TelePresence solution (basically seamless, bug-free videoconferencing for corporations) into the mainstream and focusing on emerging markets, partly by investing in these markets.

'Corporate social responsibility and good business go hand-in-hand,' Chambers said, adding that companies need to do a better job of balancing their social responsibilities with their need to turn a profit. 'I've always believed it's the right thing to do,' he added.

But even as attention shifts to emerging markets, questions persist about the affordability of equipment and the growing gap between the connected and unconnected.

Dr Sofyan A Djalil, Indonesia's Minister for Communication and Information Technology, said during a forum session that global equipment makers should adopt a different business model and lower their prices in developing economies or the digital divide will never be closed. He stressed that the current business model was creating a 'one-sided dependency' that risked trapping developing economies into a 'vicious cycle of greater and deeper' dependence.

'It is not a kind of sustainable information society if developing and least-developed economies keep being net-consumers of pricey telecommunication equipment or exorbitantly expensive application software,' Dr Djalil said.

It's interesting and significant that an industry luminary like Chambers senses the shifting winds and is willing to focus attention and resources on the less-developed parts of the world. This might well be the beginning of a major and worthwhile trend, and it will be interesting to see if developing countries with government leaders and service providers that 'get it' will be able to use telecom to leapfrog their more affluent neighbors.

Al Senia is editor of America's Network

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