Orange will pull out of emerging markets if it misses top-two targets

BARCELONA, SPAIN: As MWC starts to wind down, so will the number of insightful comments from Ovum.

Eden Zoller, principal analyst at Ovum has the following comment: “At an MWC round table attended by Ovum, Marc Rennard, Orange's Executive Vice President for Africa, Middle East and Asia, said that Orange is looking to increase revenues from its emerging markets to €7 billion by 2015 compared with €3.4 billion today. But Rennard added that if Orange cannot be the number one or two operator in its emerging markets then it will pull out.

“The challenge facing Orange is how to build out network infrastructure cost economically, particularly in larger African markets. Rennard said network sharing will help with this.

“The other challenge is moving users beyond voice and SMS to more advanced data services. Rennard said that Orange would be interested in joining forces with other operators to collectively source phones for emerging markets, using their collective buying power to pass cost benefits onto consumers.

“However, the pricing of data services beyond SMS to price sensitive consumers is an issue that needs to be addressed and this is problematic. Rennard did not have any easy answers but said part of the answer lies in new business models for mobile broadband. Exactly what these business models should be was not clear, particularly as Rennard had reservations about how far mobile advertising can help in this context.”

Foursquare’s efforts to increase user relevance must avoid pitfalls
Eden Zoller, principal analyst at Ovum has the following comment: “With 15 million users having checked in over 1.5 billion times and with support from 750,000 merchants, Foursquare is now looking to the next level of contextual personalization to drive its business. Certainly the location-based social network has a lot of user data to leverage and it now plans to use that data to pro-actively suggest things that Foursquare users can do and see in a their vicinity.

“This would function in a similar way to the old Microsoft Clippy “office assistant” service for its desktop applications, creating what co-founder Dennis Crowley describes as a contextually personalized "buzz in your pocket."

“But what Foursquare needs to remember is that the Clippy prompts often got suggestions wrong, which was annoying and unwelcome. Foursquare will have to ensure its vision of push services is genuinely useful. It has the depth of customer data to do this, but another challenge for Foursquare is leveraging that data in a way that is respectful of user privacy. Any mistakes here will hit Foursquare hard.”

Connected cars get a little smarter
Jeremy Green, principal analyst at Ovum has the following comment: “The automotive sector is clearly more important in operators’ M2M strategies than it has been for the last few years. So who better to close the first day of MWC’s speech sessions than Bill Ford, an executive with eponymous motor company and great-grandson of the old famous car company founder.

“As well as launching a “Blueprint for Mobility” and a new model car (the first to be announced at MWC) Ford said some surprisingly sensible things, including the suggestion that connected cars should be about making journeys more efficient by providing alternative transportation options if congestion is unavoidable. In the future pedestrian, bicycle, private car and commercial and public transportation traffic will be “woven together into a single mobile network to save time, conserve resources, lower emissions and improve safety."

“Meanwhile, Ericsson took advantage of MWC to publicize its own project with Volvo, Göteborg Energi, and the Viktoria Institute, which enables an altogether smarter paradigm for the charging of electric cars. The system uses M2M connectivity to enable the cars’ charging profile to be controlled by the owner even when they are plugged into an ordinary dumb power point. This means that, as with a smart grid point, they charge their batteries when electricity is cheapest – with a clear payoff in terms of sustainability, since this ought to ensure that the load on the grid is spread more evenly.”

Six ICT ministers offer bold visions for the future; but can they make it work?
Emeka Obiodu, senior analyst at Ovum has the following comment: “Recognition by emerging market that the telecommunications infrastructure is of strategic importance for national development isn’t new. But six government representatives speaking at an Alcatel- Lucent event at MWC all proclaimed that they are prepared to shape their regulatory and fiscal agendas around this.

“Brazil, Colombia, Kenya, Lebanon, Mexico and Nigeria all set out a robust and coherent approach including special purpose financial vehicles, tax regimes and legislative frameworks.

“In the end, it all comes down to innovation in processes and approach. While the moderator’s poser whether public sector innovation is an oxymoron raised chuckles, the preparedness of the ministers to go against established convention in the pursuit of their laudable goals must be commended.

“Ovum’s two forthcoming reports, Next Generation Networks investment strategies and Neutral Host/Open Access model for ICT infrastructure rollout, will explore the notion of innovative approaches to infrastructure rollout deeper.

“Innovation in the public sector is never an easy journey, as both emerging and developed economy governments can testify. But we are impressed by the vision and the determination of these administrations in confronting the task ahead of them.”