Beyond North America

North American cellular telecom expense management is the heart of our business. Nevertheless, we keep abreast of trends beyond our primary market. There are compelling reasons for doing so – three “Ps.”

1) Products

One of the simplest reasons is that other markets are testing grounds for phones and devices that could be bound for the North American market. As I mentioned in our last article, the Blackberry Bold rolled out in test markets first – including Chile. You have to do more than just observe whether or not a product is hot in one country or another. Look at the relationship between the product, consumer and infrastructure.

Example: Developing nations’ explosive wireless growth and need for inexpensive handsets is a function of wireless infrastructures being simpler to install, and carriers’ commitments to volume sales that overcome low margins. Lesson: Economy handset fleets should be more attractive in rural areas here, too, especially in businesses that rely on personal mobility (on site technicians, for example). Low land line density for phone and internet makes it easier to get things done through a handset, and while carriers have no motivation to make handsets cheaper here, high market penetration in North America means they have to offer them if they want to compete.

2) Policies

Foreign markets provide an array of “What if?” scenarios that tell us what might happen if policies or government regulations change. Mobile communications is probably the most varied field in telecom. Every market has its own government-mandated quirks and unique carrier policies.You could write (and analysts have written) giant volumes about SIM card policies alone.

Example: In the UK, “box breaking” occurs when a consumer unlocks the SIM cards of phones and resells them at a profit in another market. Carriers dislike the practice, but it’s legal. Lesson: Thanks to box breaking, UK dealers are conservative with subsidies and have begun incorporating various policies to limit the practice, including mandatory minutes and detailed tracking procedures to follow the phone’s status. If unlocking SIM cards becomes a mainstream North American practice, carriers here will have to use the same methods.

3) Penetration

Other markets are an excellent way to look at various penetration levels. Europe and Asia are the primary focus here because they include regions with higher penetration levels than North America. Parts of Europe are saturated to over 100% market because many consumers own more than one active handset.

Example: Some European markets have reached the apex of linear growth, so carriers increasingly emphasize new features and higher-end hardware. Mobile banking and purchases are just the tip of the iceberg; converged multifunction devices will be the rule, and not status symbols. Lesson:Â North American providers will have to follow their European counterparts when it comes to attracting business from people who mostly already own cell phones and need a further inducement to switch carriers.