Telecom Trends in Brazil, Russia, India and China Examined
Telecom acquisitions and mobile expansion will be major trends in Brazil, Russia, India and China (BRIC), among the world’s largest telecom markets, speakers said Thursday at a BRIC Opportunities forum. For U.S. investors and telecom companies, speakers see uncertainties in policy changes in those countries, but also opportunities. The conference, part of the Emerging Telecom Market Forums series, was sponsored by Information Gatekeepers (IGI) and the Paul, Hastings, Janofsky & Walker law firm.
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Telecom mergers and acquisitions have been a major trend in the four nations, especially China and India. China and Russia recently announced major reorganizations of their state-owned industries. Chinese consolidation of its six telecom companies into three will speed its 3G roll-out, leading to “large” investment, said IGI Chief Economist Hui Pan. China’s reshuffling aims to create two more “robust rivals” for China Mobile, at 400 million subscribers the country’s largest operator, he said. Chinese analysts saw China Unicom as the main beneficiary, since the company is selling its unprofitable CDMA network to China Telecom, Pan added.
Russia’s revamping is in the regulatory realm. The Ministry of IT and Communications, its telecom regulator, has been reorganized as the Ministry of Communications & Mass Media. Meanwhile, media content and infotainment continued to drive Russia’s value-added service and 3G market, said Andrey Gidaspov, program manager of the Global Scholars and U.S.-China Programs. Asian expansion and broadband penetration also ranked high on Russia’s agenda, he added.
Indian telecom companies, on the other hand, are “scouting” for acquisitions worldwide in an “ambitious attempt” at global expansion, said Michael Taylor, director of government affairs of the U.S.-India Business Alliance. Mobile communications is the revenue engine in the four countries, especially India, panelists said. India’s mobile market remains the telecom growth driver, with wireless now the “preferred” service format, Taylor said. “Progressive” regulation, “intensifying” competition and more affordability are helping to propel the Indian mobile market, he said.
Domestic telecom policy and import and export regulations greatly affect U.S. telecom partners in the four countries, speakers said. In Brazil, major challenges for U.S. companies include product certification, non-tariff barriers, import regulations and taxes, including federal and state levies. That makes picking a reliable local partner “important,” said U.S. Department of Commerce Senior Analyst Paulette Hernandez. As part of its focus on making India a regional telecom manufacturing hub, the government has raised the foreign investment limit from 49 percent to 74 percent, Taylor said. “Comprehensive” spectrum policy and 3G policy are on the Indian legislative agenda, he added. In China, despite policy uncertainty, IPTV is on the rise, said Pan.