Wednesday, 22 June 2011

Telenor seeks opportunities outside of Europe

Interesting story from Total Telecom about Telenor's expansion plans in Asia. A couple of points particularly chimed with me.

Firstly, transferring a lot of its learnings from Europe to its A-P territories is a sensible move for Telenor. Few other operators in India, Pakistan, Bangladesh, Malaysia or Thailand can draw upon such a wealth of expertise.

Secondly, where Telenor doesn't have footprint it represents a good opportunity as the region is a few years behind Europe. Once these non-footprint markets get more sophisticated, competition kicks in and prices come down, roaming is not a viable strategy. You need to be an incumbent or have some sort of special low-cost partnership deal. Otherwise you can't compete on price. Telenor has found this in Europe, so it's switching its attention to Asia. It may, however, only have a few years in non-footprint markets to grab market share before competition drives down prices.

Thirdly they have correctly identified that smart metering is a big opportunity in Asia due to the need to reduce "non-technical losses", i.e. theft and fraud. For utilities in Asia the need for smart metering is real and the return-on-investment is substantial. No need for mandates here as we have in the EU. Some of the largest implementations of smart metering so far are in emerging markets. According to Machina Research's Machine-to-Machine (M2M) Communication in the Utilities Sector 2010-20, Telenor's 5 Asian markets will have over 50 million smart meters by 2020, representing an annual revenue opportunity of over EUR1.5 billion. For more details on this report, contact me.

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