Risks and Rewards in High-Growth Emerging Markets

Deployment strategies for developed markets do not translate well for high-growth emerging markets, which is the primary reason that ARPU rates in emerging markets do not apply. Understanding local nuances, culture, customer expectations and dynamic market conditions is essential for an opportunity to evolve into a success. For example, a centralized and dedicated retail outlet is often not desirable in emerging markets because of operational costs or various location issues. This affects support services and customer care, and creates a near-absence of branding and marketing material for new services. However, retailing products and services can be launched and supported at smaller venues, such as dedicated kiosks and carts, or other non-telecoms businesses. This distributed physical presence reduces overhead that would be required in a developed market.

Survival in emerging markets requires highly automated and efficient operations and management for low maintenance and staff costs. Automation is especially important for remote management systems that have global reach, as support staff may not be fluent in a customer's native language. Speed is critical for any venture, but streamlined automation systems can realize faster deployments and time-to-market for necessary services. This speed lets service providers maximize profits in the shortest time possible.

Deployment costs must remain relatively low. Whereas larger companies in developed markets provide platinum-level customer service with higher account servicing costs, new entrants in emerging markets can create state-of-the-art services for a fraction of that cost. That reduction comes from leveraging many variables, including automation, complexity reduction, local partnerships and economic conditions, reduced point-of-presence requirements, and technology. Teaming with a ready, experienced and trustworthy partner can help manage and benefit from using these factors.

Infrastructure requirements for an emerging market also must be evaluated. Old or existing infrastructure may not meet market demands, entailing a total replacement or an upgrade. In environments with new infrastructure, appropriate scaling and interoperability with regional and international standards is usually necessary.

With any market, there is at least one established service provider that has been around since the formation of the market. In emerging markets open to competition, a variety of service providers define the market. New entrants need to make appropriate partnerships and agreements with backbone providers for the region, carefully evaluating the present and future needs for service deployment and management. The value of this approach must be compared with building additional backbones or with a strategy that mixes new and established routes.

There also are technology issues to consider. Staff shortages for customer service and operations can put additional requirements on reliable automation. The right technology and service choices can mitigate geographic and staffing issues. Selecting the proper combination of service enabler, software and reliable backbone technology will enable companies to realize fast time-to-market for operations, new services and promotions. Ongoing management and maintenance costs also must be controlled. The ability to remotely support, upgrade and deploy new services is critical for success in this regard.