What's next for Asia's mobile operators

Telecom Asia staff writers and industry analysts
21 Dec 2010
00:00
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Go into the white-box handset business

Handset capability is the biggest hurdle to the adoption of data services, particularly in emerging markets in Asia where more than 50% of the handset base has no GPRS capability, although this is set to shrink to 36% by 2013. 

One major factor helping transform the handset market is the success of "white-box" handsets - typically standard modules from companies like MediaTek that are assembled by Chinese companies and branded/distributed by local entities in their markets (e.g. Nexian in Indonesia and Micromax in India). These handsets already make up 30% of the installed base in several markets. In India, they constitute 55% of new handset sales. 

The phenomenal growth of these products has been driven by product innovation (dual SIMs, QWERTY keypads) at price points 30% lower than international branded phones of a similar specification. However, the rapid growth of white-box handsets is leading to fragmentation of handset platforms and making it technically challenging for operators to deliver data services.

An increase in the number of operators entering the handset business in 2011 will provide a catalyst for enabling services in the data market - as well as drive new revenues through handset sales. Enabling data services will be driven through one-click services (such as integrated Facebook/Yahoo! as done by Nexian/XL in Indonesia and Tata DoCoMo/Yahoo!/Alcatel in India) and the launch of application-specific phones (e.g. Bakrie's Hidayah and Music phones, and Aircel Peek email device). 

Operators are also adopting different business branding and distribution models for handset sales. Companies like Bakrie Telecom (Indonesia) have their own branded/own distribution approach. Joint or partner branded/distribution reduces brand risk. Partner branded/partner distribution lowers risk for the operator but also reduces differentiation.

- Amrish Kacker, partner for strategy consulting, Analysys Mason

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