How Emerging Markets Are Getting The

(Text) Message
SAPVoice

RUN SIMPLE

By Anirvan Ghosh, Global Corporate Affairs Intern, SAP

For years, farmers in Maharashtra, India struggled to receive a fair price for their produce.
Unaware of locations that offer higher prices, shrewd middlemen coaxed farmers to sell for less
and sold to buyers at a higher price. The farmers gained little from India's economic growth and
remained poor. In 2007, the introduction of a mobile messaging service called Reuters Mobile
Light Service (RML) changed everything.

Encouraged by government policies, the RML service spread quickly. In 2010, a grape grower in
the state began exporting to Russia where prices were higher. A maize grower received
information about the spread of bird flu in parts of India where most of his customers were
located. He stored his produce and waited until he could sell for a higher profit.
Photo: Shutterstock

As a result, RML reached over 1.3 million subscribers across 50,000 villages in 13 states. It
delivers customized and localized information such as weather forecasts, local crop prices,
agricultural news, and other relevant data. Individual farmers have earned over $4,000 in
additional profit based on information they received through RML.

Getting the global message

In China, the telecommunications industry grew 40%, a rate other traditional industries can only
wish for. In Africa, mobile phones changed the way people bank, shop and transfer money. In
Kenya, where daytime robbery was a common occurrence in the capital of capital Nairobi,
mobile payments proved to be an effective solution. Today, one quarter of Kenya's GNP flows
through the M-Pesa mobile money system. In South Africa, 33 percent of the population does not
have access to a bank account yet nearly all own a mobile phone. SAP developed a mobile
banking app for Standard Bank to bring banking to the people of South Africa. Over one million
new customers have signed up for the app since its launch last year.

Studies indicate that introducing 10 new mobile phones per 100 people in the developing world
can add between one half to one percent to a country's GDP growth rate. Operators have offered
innovative services as they bid to retain high-spending customers who use profitable 3G/4G
services and consume far more data than those on 2G networks.

People in far-flung rural areas use mobile phones to gain access to reliable information. Voice
and messaging services are usually adequate but operators have adapted modern technology to be
used in places with poor internet connectivity, or in regions where apps like Twitter are restricted.
For example, when social media was banned during protests in Istanbul, mobile networks made it
possible for people to voice their opinion on Twitter through SMS. In Kenya, people transact
money through M-Pesa, which does not require broadband.

As the U.S. and Western Europe reach saturation, developing nations have quickly emerged as
growth drivers. Last year, North America grew less than 1 percent, while Latin America grew at
5 percent. Broadband mobile data, or 3G and 4G LTE networks, will spread wider around the
world as governments invest in mobile technologies to spur growth. Operators can turn a profit
and offer better services, which will attract more users.

In Colombia for example, broadband allowed people to watch TV programs with a higher level
of customization not possible with a regular cable connection. Operators are also offering shared
data plans, freeing customers to be online on multiple devices under the same payment plan.

We can expect more choices to explode in popularity in emerging economies as they become
richer, services become cheaper and citizens demand more from their leaders. As one politician
said during India's recently concluded general elections, "Good times are ahead."

Stay one step ahead of mobile innovations by tuning into SAPPHIRE NOW Live, June 3-5.

This story originally appeared on SAP Business Trends.