Making 3G More Affordable

Press release
5 minute read
At the 2006 3GSM Asia congress, Telenor clarified its intentions on how to offer mobile communication to those not yet connected.

The Telenor Group contribution 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," said the head of the Asia region at Telenor, Arve Johansen in his opening lines during the morning Keynote interview session. It is no great surprise that the Telenor Group's constellation of Asian operations attracts attention.

Generating growth in low-income countries

Telenor is the second largest mobile operator in Asia. We are also the only European operator with a significant presence in Asia.

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, i.e. countries with low average revenue per user. 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.

Strong impact on the economies of developing countries

The session opened with World Bank Group Director, Mohsen Khalil, whose 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.

Universal access?

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.

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.