A considerable and growing pool of research shows that access to telecommunications – and mobile telecommunications in particular – has the potential to change people's lives for the better by promoting economic development.
Our strategic business goal to achieve strong growth in emerging markets is closely linked to our CR objective to improve access to communications. Emerging markets offer enormous business opportunities for Vodafone and are increasingly significant to our business.
We already have established local operating companies in Albania, Egypt, Romania and Turkey, a presence in Kenya, South Africa and other African countries through our affiliates and joint ventures, and a new local operating company in India.
The number of mobile connections is increasing at a rate of 29% year-on-year in the Asia Pacific region according to data released by Wireless Intelligence in December 2007, and at a rate of 38% in Africa – compared with a worldwide average growth rate of 23%, and the Western Europe average of 10%.
Establishing an operating company in India
India is the fastest growing mobile market in the world. Indians use their mobiles more than any other nationality – some 469 minutes per subscriber each month on average. But around 77% of the population of over 1.1 billion does not yet own a mobile phone. This offers enormous potential for our business to significantly improve access to communications as well as strong future growth opportunities for Vodafone.
We acquired control of Vodafone Essar in May 2007. Vodafone Essar provides mobile services to 44.1 million people. This is an 18% share of the mobile phone market in India, which currently reaches 23% of the Indian population. Our networks already cover 16 of the country’s 23 circles (telecom zones), including four of its largest cities – Mumbai, Delhi, Kolkata and Chennai. In 2008, we will extend our services to the remaining seven zones. Vodafone Essar’s planned expansion, which includes a network-sharing project, will extend access in rural areas and help the Indian government meet its target of 500 million mobile subscribers by 2010.
Adapting our services to emerging markets
To explore business opportunities effectively in emerging markets, we need to understand the needs of customers in those markets. Our research on the socio-economic impact of mobiles in Africa found that mobile technology stimulates economic growth and social development. This impact is most significant in developing economies where there is little or no existing infrastructure. See more on our research findings.
We are encouraging economic growth by tailoring our services to emerging markets.
Our main focus areas are:
- Developing low-cost handsets to make mobile phones more affordable
- Implementing new business models tailored to local conditions
- Introducing mobile transactions services that allow people to use their mobile phone as a bank or cash machine in markets with poor banking infrastructure
- Offering access to internet through mobile, overcoming the lack of fixed-line infrastructure
- Undertaking research on our socio-economic impact
Contributing to the debate of affordability: total cost of ownership
The affordability of communications in developing countries not only depends on the price of handsets and mobile services but also on other factors governed by local regulations and taxes. The Taxation and Digital Divide report, produced by Deloitte for the GSM Association (GSMA), found that, on average, tax accounts for nearly a quarter of total handset costs.
We have contributed to the debate on the total cost of mobile ownership, working through the GSMA Association to publish reports on the following topics:
- Universal Access – how mobile can bring communications to all
- Taxation and the Digital Divide
- Regulation and the Digital Divide
For more information, see the GSMA website.