Online Accessibility in Emerging Markets
No one can ignore the movement of labor and technology across oceans and continents as globalization marches forward. For better or for worse, previously closed economies are now open for trade with the rest of the world. Just as the proliferation of cellular communication networks in developing countries continues, it is only natural for the Internet to follow.
Increasingly Affordable Access
I spent five years as a child living in a small village in Northern Thailand in the mid 1980’s. The only means of personal communication to the outside world for a majority of the people living there was either the postal service or “local” telephone service. Local meaning a building with two telephone lines. Having your own telephone line was still very expensive in those days. If I needed to speak to anyone out of town or abroad, I had to walk roughly 2 KM and then get in queue to make my call. If someone called in, a messenger would promptly show up at your doorstep and notify you who called in and tell you when the next attempt will be so you can be there to receive the call.
Fast forward to 2004. It’s been 14 years since I visited the village surrounded by rice paddies, with the reflection of the cloudy blue sky that is nestled between jungle covered hills. It was mostly the same, except for a couple of things. Everyone had a private land line telephone in their home and almost everyone had a cellular phone. The most notable juxtaposition that I observed was a farmer riding on an ox cart, talking on the phone.
Today, the cost of a computer is still out of reach for most people in rural Thailand and other developing countries and internet connections are sporadic. However, as globalization continues to drive down material and labor costs, it is foreseeable that the current situation will change with the introduction of cheaper computers such as netbooks and less expensive mobile phones with Internet access.
Global Trends
In March of this year, the United Nations reported that over 4 billion people have mobile phone service and approximately 1.7 billion people have access to the Internet. The existing cellular network in developing countries is constantly being upgraded to allow for more data traffic, making Internet access possible where it wasn’t before. This opens up an enormous untapped market in Africa, Asia Pacific, and Latin America. In addition, adaptation of fixed or mobile broadband users is sky rocketing. In Brazil alone, the number of broadband connections grew 30.5% between 2006 and 2008.
Nokia Siemens, a big player in the telecommunication arena is focused on bringing mobile broadband networks to developing countries now that the cost of broadband devices are rapidly declining. Just this summer, two Brazilian cellular companies awarded the broadband satellite company, Hughes Network Systems, LLC with contracts to provide broadband operations to their existing cellular networks. Key players in telecommunications are fully aware of the global trend and are investing in these new markets.
Creating a Motivation
A major challenge ahead for those planning Internet-based services for emerging markets will be to figure out what people in both rural and urban areas want. From my own experience, it is hard to find relevant content that is tied to a geographical area–for example, an event calendar listing upcoming festivals in my rural village in Thailand. A major infrastructure investment enabling Internet access would be wasted if there is no perceived value that motivates users to get online.
Initially, the most desired services are most likely to be the ones that serve peoples’ basic every day needs. In Africa, financial services over mobile phones are hugely popular, allowing easy access to banking and the ability to make purchases in remote locations. But sophisticated solutions should not be overlooked either. Maybe that farmer on the ox cart needs an online service that provides satellite data to see what needs to be done to his fields to increase his yield.
