The characteristics that nascent development imbues, such as increased population mobility, a burgeoning middle class with high disposable income, and a large low-income population, can create tremendous demands upon telecom services.

In many developing countries large-scale population mobility results from regional economic imbalances. Some operators have derived commercial opportunities from the demographic phenomenon and gained market success.

Population mobility: the opportunities

Chinese New Year sees an annual mass exodus of over 2 million people as a relatively high percentage of the city's inhabitant return home for family reunion in around 10 days. Accordingly, operators offer roaming service discounts and ensure that local subscribers can still enjoy services and use their minutes without changing SIM cards in New Year. 

In some countries multinational telecom traffic and services are generated via large-scale activities and travel to popular tourist destinations. For example, Ramadan and Hajj are two of the most important events in the Muslim calendar, and the latter sees about four million pilgrims gather in Mecca annually. An operator in Saudi Arabia launches telecom service promotions for each Hajj festival and, thanks to the equipment configured by Huawei, subscribers can obtain a local number after roaming to their own networks, meaning SIM card changes are unnecessary to enjoy usual phone services charged at local rates. Subscribers benefit from user-friendly prepaid services for telecom and recharging services, and no multinational settlement fee is required since local numbers are used.

Population dividend benefits

A population dividend occurs when the percentage of working age individuals rises while the birth rate falls faster than aging rate. It is characterized by relatively rich labor-force resources and a light burden from senior citizens, and represents a golden period for a country's economic development. Many developing countries are currently benefiting from a population dividend which is spurring both consumption and progress.

China, for example, has about 300 million people under 30 years old who form both the catalyst for economic development and its main beneficiary group. During the past three years, the average income for 20-29 year olds has increased by 34%. Youthful vitality combined with a high disposable income and intrinsic optimism creates a demographic group with the largest consumption potential in China. In terms of the telecom market, this group are not only trend setters, but more readily acceptant of new telecom services - especially data - and are thus the key consumers responsible for promoting innovation and development in the communications field.

Middle class strength

Though developing countries possess low average GDPs, they have large populations and rapid GDP growth which is swiftly expanding their middle classes. According to an approximate calculation regarding purchase power parity (PPP), around 1.7 billion people globally earn an average income exceeding US$7,000, and nearly half of these live in developing countries, with more than 240 million in China alone.

New technology gain

Telecom solutions for developing countries should differ from those in developed countries. It is unnecessary to deploy the most advanced technologies firstly in developed countries' markets since the existence of a complete networking infrastructure brings with it an overweight historical burden that renders the application of new technologies costly and difficult. Conversely, developing countries benefit from relatively less legacy network features, and it is more viable to smoothly and cheaply apply the latest technologies.

An international telecom operator in Africa, for instance, has deployed WiMAX on a large scale, covering numerous countries including Namibia, Botswana, and Angola since 2006. The market has reacted favorably to WiMAX Internet access, and WiMAX subscribers now greatly outnumber fixed network ADSL subscribers. Operators in countries such as South Africa, Nigeria, Uganda, and Russia have adopted EV-DO data cards for Internet surfing through wireless broadband. Their ARPU values remain over US$60, with some reaching US$100. According to Huawei's 2006 research in Namibia, over 30% of broadband users shopped online, second only in volume to web browsing.

Emerging markets are replete with challenges. The two major concerns involve retaining subscribers in an aggressively competitive environment while generating profits in a low ARPU level. Thus operators are in great need of a long-term partner to assist their future growth.

Based on our rich experience accumulated in emerging markets and underpinned by continuous investment in the GSM and CDMA, we are ready to help operators to lower TCO and garner profits in a low ARPU setting via scientific business planning, innovative product implementation, and holistic end-to-end solutions.

"The success of it shows Huawei's strong commitment to customer and strong delivery and implementation capability for huge mobile network. It also reinforced our partnership with VIVO." -- Mr. Alex Ping-an Zhang, the President of Huawei Brazil.