 It's no secret emerging markets have provided the bulk of new wireless phone
users in recent years and will again in 2008.
What is less known is that plenty of mobile phone users are coming from
countries such as Chad and the Democratic Republic of Congo in Africa or
Colombia in South America. Those smaller markets, not big ones like India or
China, are the bread and butter of Millicom International Cellular.
"I'm very optimistic for the outlook in the 16 markets where we operate,"
Millicom Chief Executive Marc Beuls said. "What I see is very strong GDP growth,
which should continue in 2008. These countries are inviting in foreign
investors, opening up their economies."
For many developing countries, having wireless phone services available is a
key part of modernizing economies, some analysts say. Beuls agrees.
"By us building a wireless network we help create economic infrastructure,
allowing people to communicate -- to communicate doing bus iness -- and that
helps create growth in the market," he said.
In November, Millicom upped its guidance for capital spending in 2007 to $1
billion from $800 million. It expects to spend at least another $1 billion in
2008.
Much of that spending is in Africa. Millicom operates in Chad, Congo, Ghana,
Tanzania, Senegal and Sierra Leone.
One of Millicom's challenges is that much bigger telecom firms are now eyeing
small developing countries where wireless usage is still low.
"Africa is very much the flavor of the year, a lot of newcomers are coming
into the market," Beuls said. "But some companies underestimate what it means to
operate mobile businesses there. It's a much different environment, and you need
to adjust your business model."
Luxembourg-based Millicom sells prepaid calling cards through street vendors.
"With us, people buy minutes on a daily basis, on the way home, almost like
going to Starbucks in North America," Beuls said.
To make wireless services more affordable, Millicom charges customers on a
per-second rather than per-minute basis.
It introduced e-PIN to enable customers to add minutes without buying a
prepaid card. Beuls says Millicom is testing mobile payment services as an
offshoot of e-PIN.
Millicom's retailing strategy has paid off in very different markets like Sri
Lanka, Laos, Bolivia and Paraguay. In some of its Central American markets,
wireless usage is higher, with about 60% of the population now having mobile
phones.
Accountability
Central: Latin America, Africa Offer Most Growth; MILLICOM
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