Eric and GVTucker: Do either of you know of any company(ies) that make solar chargers for cell phones? One month ago I posed this question to the, "Africa - Wireless Frontier," thread but no one replied (no solar technology followers over there).
I am very interested in the expansion of cellular service in developing areas of the world, but the one question I always have is: What good is a cell phone if the targeted customer base does not have access to electricity?
The other day I read this article, which I posted to the T thread. Again, my same question, rephrased: How can the customer base grow in many of these areas if people can not charge their phones?
Investor's Business Daily
Wireless Operators Tap Africa, Other New Markets For Growth
Friday December 7, 6:56 pm ET
Reinhardt Krause
In the dense forests of Papua New Guinea, hunters stalk their prey with the latest technology: cell phones.
Privately held Digicel expanded into the south Pacific island nation early this year. Mobile operators are rushing to expand in just-emerging markets where's there's still subscriber growth to be had.
Half the world's population now uses mobile phones. Even in some big emerging markets -- China, Russia and Brazil -- the days of big subscriber growth are over or winding down.
India, where 18% of the population uses mobile phones, is one exception. And wireless firms continue to flock there, including AT&T (NYSE:T - News).
Wireless penetration is still well below 30%, and in some cases 10%, in many parts of Africa, southeast Asia, central Asia and other remote areas of the globe.
In those markets, disposable incomes are low but growing.
By running lean networks, wireless firms have been churning out healthy profits where average per-customer revenues are $5 to $10 a month, analysts say.
There's a race to grab assets in still-developing markets where penetration rates are low, said Thomas Wehmeier, analyst at research firm Informa Telecoms & Media.
"The clamoring for emerging market assets has been driving prices for licenses and in acquisitions much higher, in some cases to ridiculous levels," said Wehmeier.
"Some of the acquiring companies have big war chests to go out there and seek assets."
The battle pits heavyweights such as Vodafone (NYSE:VOD - News), France Telecom (NYSE:FTE - News) and China Mobile (NYSE:CHL - News) against Millicom Cellular (NasdaqGS:MICC - News); newcomer Zain, formerly called MTC Kuwait; Russia's VimpelCom (NYSE:VIP - News) and Mobile TeleSystems (NYSE:MBT - News); America Movil (NYSE:AMX - News); Europe's TeliaSonera; India's Bharti; and other well-funded players.
Dozens of developing countries are expected to award wireless licenses in 2008, including "3G" licenses for high-speed networks.
Another route into emerging markets has been acquisitions. Valuations have jumped for small operators that already own airwaves.
Kuwait-based Zain has sent shock waves through the industry with its spending spree.
"There's been intense bidding in some areas of the world," said Kevin Roe, principal of Roe Equity Research. "Some of the bidding has seemed irrational. Zain has been involved in some crazy stuff."
In March, Zain agreed to pay $6.1 billion for the third wireless license in Saudi Arabia, beating out India's Bharti. Zain has spent some $9 billion since 2005 to expand in Africa.
With more stable governments and expanding economies, Africa has emerged as a key wireless battleground.
"Africa is very much the flavor of the year, a lot of newcomers are coming into the market," said Marc Buels, chief executive of Millicom. It operates in seven African markets as well as Latin America and Asia.
Paying By The Second
Luxembourg-based Millicom sells prepaid calling cards through a network of street vendors.
Millicom also charges per second, rather than per minute, to make wireless more affordable.
Rivals underestimate what's required to operate in Africa, Buels says. "It's a much different environment," he said. "It's not the same business model as Europe or even the Middle East."
France Telecom is aiming to double its subscriber base in Africa to 50 million in three years.
The company last month struck a deal to buy a majority stake in Kenya's No. 3 wireless firm. It's also the lead bidder for the majority of Ghana Telecom, say media reports.
In the Kenya deal, France Telecom paid more than $1,900 per subscriber, says Informa. That's double the $944 per user that Vodafone paid in India eight months earlier. In February, Vodafone bought a controlling stake in India's No. 4 wireless firm, Hutchison Essar, for $11 billion.
China Mobile backed off a deal to buy Millicom in mid-2006. But it still seems interested in Africa.
Reports surfaced in November that China Mobile has eyed a deal to take a stake in MTN Group, which operates in Africa and the Middle East. MTN denied the reports but could be a target, analysts say.
"MTN has operations in markets with over 500 million people with combined penetration of less than 30%," said Philip Kendall, analyst at Strategy Analytics. "There's significant room for growth there."
China Mobile expanded into Pakistan in 2006. It's prowling for more deals in Asia, analysts say.
Russian Expansion
VimpelCom and Mobile TeleSystems have expanded into Ukraine, Kazakhstan, Uzbekistan and other neighboring countries. Kendall says the Russian wireless giants seem to have the inside track in acquiring wireless assets in central Asia. However Swedish operator TeliaSonera in July bought MCT, which has stakes in operators in Uzbekistan and other countries.
Vimpel is now targeting southeast Asia. It's in talks to create a joint venture in Vietnam, a country that's of interest to Millicom as well.
The Vietnam deal would give VimpelCom a stake in the country's No. 4 wireless firm.
About 30% of Vietnam's 85 million people use mobile phones. Plenty of potential customers are left, despite rising competition, says Vimpel CEO Alexander Izosimov.
"Market share is usually determined during the fat part of the S-curve," Izosimov said.
"Later in the penetration curve it is more difficult to redistribute market share from one play to another." He adds that VimpelCom still has a big opportunity to grow share in Ukraine and other markets.
Izosimov says VimpelCom plans to stick with a strategy of forming joint ventures rather than competing in costly auctions for licenses.
Roe says public companies need to be cautious amid the emerging market spending spree.
"Prices have been going up significantly," he said. "The challenge is to be a disciplined bidder for new license opportunities. Some of these operators are going to be hard-pressed to show a positive return on their investments."
Specialists Face Challenges
With nearly all big wireless firms eyeing tiny markets for growth, it's going to be harder for emerging market specialists, like Millicom, said Roe.
"Millicom has been able to pull a few rabbits out of the hat, like Congo and Colombia," Roe said. "But now it's much harder for them to fly under the radar and get assets on the cheap."
Millicom won't overpay, says Buels.
"Unlike the Vodafones, the France Telecoms of the world, who might be in a slow-growth situation in their home markets, we are in a position to be picky," he said. "We don't need to add assets at any price. We have plenty of growth coming from the 16 markets we are already in."
biz.yahoo.com
Lynn
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