GSM chiefs ponder path to the remaining 2.8b users

19 Oct 2006

GSM operator CEOs urged delegates at the 3GSM World Congress Asia event on Wednesday to think beyond the next billion subscribers and look toward a time when GSM covers over 90% of the world's population.

During a keynote panel on the final day of the congress - the last to be held in Singapore before the event relocates to Macau next year - Smart Communications' president and CEO Napoleon Nazareno described how his company looked beyond the more heavily populated urban areas and into rural communities.

"When we reached 25% penetration the analysts said we were hitting the wall, but we wanted to push the wall back," Nazareno said. "So we looked at making the service more affordable [via micro-payments]. In the Philippines people have daily earnings, so they have daily spending patterns. But when you sell smaller units, it is not necessarily lower margins."

Alexander Izosimov, CEO of Russian operator VimpelCom, said his company managed to drive up subscriber numbers thanks not just to lower prices, but also a lack of over-regulation on the part of his country's government. "There are no excessive taxes in Russia. None on any part of the operation, none on SIMs," he said.

The Russian government is, however, planning to introduce a universal access fund - a move that Izosimov and Arve Johansen, CEO of Telenor (which is an investor in VimpelCom), agreed is not necessarily the best method of achieving improved telecommunications coverage.

"If I am honest I have seen very little benefits of the universal access funds," said Johansen, whose company has operations in Pakistan, Thailand and Malaysia "” all countries in which the governments have introduced such funds. "Governments take the money, but they don't know what to spend it on. There is a tendency to spend on fixed, but mobile is more efficient."

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