In new research, Forrester Research, Inc. (NASDAQ: FORR) advises mobile operators and handset manufacturers to develop business models that allow them to profitably sell mobile phones and communications services to the mass market in emerging countries, stripped of unnecessary bells and whistles like mobile multimedia and with reliable service that doesn¿t require extensive, costly support.

There are 1.5 billion mobile telecom users today ¿ a quarter of the world¿s population. A further 3.5 billion people live within the coverage area of a mobile cellular network. To grow their base by a further 1.5 billion mobile users, handset manufacturers and mobile operators need to turn to emerging nations and provide cheap phones and services for low-income consumers, according to Forrester Research.

Michelle de Lussanet, Principal Analyst at Forrester Research, says: ¿In emerging markets like the Philippines and Iran, the per capita GDP is barely a fortieth of that in most Western European countries and the US. To make mobile affordable for the next billion users, three factors need to change. First, handset manufacturers should not focus on producing high-end devices with fatter margins alone, but look to lower phone prices and learn to do this profitably. Also, governments of emerging markets need to curb the mostly excessive taxation and legislation that raise mobile operators¿ costs prohibitively. Finally, mobile operators should develop basic calling plans with all premium services stripped out to make them as cheap as possible.¿

Where Mobile Communications Stands Today
Mobile communications is undoubtedly one of ICT¿s great success stories. Globally, here¿s where this technology stands today:

  • Mobile networks cover 80% of the world¿s population. Some 5 billion people are within range of a public cellular network.
  • Mobile users comprise a quarter of the world¿s people. One and a half billion people use mobile services.
  • GSM is the leading standard. Seventy-eight percent of mobile users connect via GSM networks, followed by 14% that use CDMA technology and 6% on TDMA networks.
  • Developed nations have the largest mobile user base . . . Not surprisingly, the European, Asia Pacific, and North American regions account for more than half of all mobile users, although they have just 20% of the world¿s population.
  • . . . but the lowest growth opportunities. Markets like Italy and the UK are at near-saturation levels. In Japan and the US, two-thirds of the population already uses a mobile phone.

The GSM Association Is Poised To Address The Demand From Emerging Markets
To address the demand from emerging markets for more affordable mobile communications, the GSM Association (GSMA) recently selected Motorola as the lead vendor in an initiative to forge the way toward a new “Ultra-Low Cost” mobile handset market segment (aimed initially at a price point from US$40 ex-factory) and to ¿connect the unconnected.¿ Furthermore, by educating emerging countries¿ statesmen about the economic and social benefits of communication services that extend to low-income groups, the GSMA hopes to spark changes to local taxation and legislation, which in turn should lower mobile operator costs.

According to de Lussanet: ¿The GSMA¿s efforts to give developing nations¿ mobile a push in the back will not only open real growth opportunities for mobile operators and handset manufacturers. It will also set standards for emerging-market phones and pave the way for the 3 billionth mobile user. With commitments from mobile operators, governments, and handset manufacturers like Motorola, the 2 billionth mobile user will sign up within two years and will live in a developing nation. As this first growth wave builds economies of scale, expect the mobile industry to reach the 3 billionth mobile subscriber milestone before the end of the decade.¿