Making 3G more affordable
Journalists flocked around Arve Johansen, Head of Telenor's Asia region, as he stepped down from the centre stage at the 3GSM Asia congress after yesterday's panel discussion on how to offer mobile communication to those not yet connected.
The 3GSM Asia conference 2006 is coming to a close, and the Telenor Group contribution has left its mark on the attendants and co-performers. "We are number one in Bangladesh, number two in Thailand, number three in Malaysia and see-sawing between third and fourth place in Pakistan just one and a half years after launch," Johansen announced in his opening lines during the morning Keynote interview session on Tuesday. It is no great surprise that the Telenor Group's constellation of Asian operations attracts attention.
Telenor is the second largest mobile operator in Asia with operations in more than one country. We are also the only European operator with a significant presence in Asia.
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| In an exclusive worldwide interview on CNBC on Wednesday, Arve Johansen on explained how Telenor is planning to provide mobile data services in emerging markets. |
GrameenPhone, DTAC, DiGi and Telenor Pakistan are well positioned to tackle the challenge of generating growth in low ARPU segments. In his interview on Tuesday, Johansen stressed three main factors which have secured the strong positions and healthy futures of these companies: 1) local skills in understanding the domestic markets and the needs of the people, 2) utilising the power of the Telenor Group at large and 3) comprehensive infrastructure cost cutting measures and efficient network deployment. "All costs must be cut to the bone and we must exploit network efficiency to the full," Johansen claimed.
Impact on GDP
The session opened with World Bank Group Director, Mohsen Khalil, in charge of all the World Bank Group activities in the area of telecom and information technologies worldwide. His message was clear: Mobile communication has a considerable impact on the economies of developing countries. His message was also implicitly directed at the decision-making bodies of these countries. With the operators doing all they can to connect the low and no profit customers, the regulators must in turn support the telecom players as best they can and allow market forces to drive the progress.
The Keynote chair and moderator, Andrew Dymond, Managing Director of Intelecon research is an expert on developing markets and regulatory issues. Intelecon has just published a report on Universal Access, a hot topic for regulators and operators in developing markets. Dymond's questions to the high profile panel echoed some of the main issues in this report.
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| From left: VimpelCom CEO Alexander Isozimov, Arve Johansen, Napoleon Nazareno, CEO of Smart Communications and World Bank Group Director, Mohsen Khalil. |
In many of these markets, the authorities have implemented Universal Service Funds. Operators pay a significant percentage of revenues to a fund, which may then be tapped by those who provide coverage in remote and unprofitable areas. In practice these funds have not accomplished what they were set to do, few mobile operators have been given funding and market forces have in essence proved the most efficient driver towards Universal access.
The buzz
Arve Johansen was joined on stage by VimpelCom CEO Alexander Isozimov, who explained that VimpelCom will not yield to price war and differentiation but instead concentrate on quality and simplicity. Isozimov also boldly stated that with Universal Service Funds basically only cashing out to fixed operators, not mobile operators, this is in essence "a cross subsidy from efficient companies [mobile operators] to less efficient companies [fixed line operators]."
Also on stage was Napoleon Nazareno, CEO of Smart Communications, a company renowned for the micro top-up philosophy which basically means that people can buy airtime in small volumes instead of having to cash out in bulk. Smart's main focus is on meeting people's daily needs and bridging their purchasing power, an initiative which is now widespread in most developing markets.
"Connecting the unconnected" has become a buzz phrase across Asia and Africa, and the management of the Telenor Group's Asian operations are considered experts in the field. Erik Aas, Tore Johnsen and Arve Johansen have been stepping on and off various podiums this week. Johansen started his day with a breakfast press conference for a group of journalists from Bangladesh. Later in the evening, after a packed programme of meetings, he stopped off at CNBC's studios for a live interview before catching the last flight back home to Bangkok.
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| Erik Aas, CEO GrameenPhone. |