Sri Lanka will soon see a slowdown in mobile growth due to declining affordability, an industry expert says.“The growth seen during the last few years will slow down possibly next year due to the question of affordability,” Prem Chand, General Manager of Nokia Emerging Asia told The Sunday Times FT on the sidelines of the Nokia World 2008 in Barcelona, Spain early last week.
Prem Chand, General Manager |
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He said that Sri Lanka needs to extend its mobile services to the tier 2 and tier 3 groups. “In this case it will be the rural villages. We need to work with the operators on two fronts in order to accomplish this – expand the mobile network coverage and increase affordability in these areas,” he explained.
He said that with such an initiative the growth opportunities in the country are in abundance though a temporary downward hunch is visible due to macroeconomic conditions.
Sri Lankan industry analysts in Colombo say the telecom sector was a high growth industry with a 25 % growth rate in 2007. In addition, over 20% was contributed to the GDP of the country by this sector.
Mr. Chand says that Nokia together with the government and the operators need to work on the coverages while there should also be affordability to the financially constrained section at the bottom of the pyramid.
On the affordability point, he said, “In Sri Lanka (or any other South Asian market) the duty rate and the tariff structure are deterrents in this regard.” He noted that Sri Lanka’s duty rates at 13 % on mobile handset handsets are quite high.
“The government needs to recognize that increased penetration grows the GDP while improving employment. Our cheapest handset (in any market) is at US$ 22, but with a 13 % duty there is US$ 3 – 4 that gets added on. If the prospective subscribers are earning less than a dollar this additional cost burdens them,” he said, adding that the government needs to re-look at the duty structure.
He said that on behalf of Nokia he has made representations to the Telecom Regulatory Authority (TRC) and the Treasury with regard to the tariffs. “Right now Sri Lanka is trying to control its foreign reserves by increasing the tax rates on imported items. But I feel that the recent increase of tax by 3 % to 13 % is counter productive as the grey markets in turn will be more active as a result.”
Nokia Messaging
Picture shows Olli-Pekka Kallasvuo at the opening ceremony. |
The ability to work away from the office and on the move is a defining feature of modern business.
No enterprise hoping to stay competitive can ignore the fact that we live in an increasingly mobile world. From the globetrotting CEO to the roving field engineer, portable devices such as mobile phones, laptop computers, and business devices have radically changed the way people work.
In this respect at its annual event Nokia World 2008, the company announced the launch of Nokia Messaging, which mobilizes consumer email and consumer instant messaging (IM) solutions on Nokia devices.
“Nokia Messaging will give millions of consumers access to email and IM accounts from Yahoo! Mail® and Yahoo! Messenger®, Windows Live Hotmail, Gmail and Google Talk, and AOL Mail as well as email solutions from thousands of ISPs around the world on the majority of Nokia devices,” President and CEO Olli-Pekka Kallasvuo said.
At this event the company also introduced the online portal for Mail on Ovi, which will enable PC users to create and access Ovi email accounts as well as gain cross access to other Ovi services with just a single sign-on account. "We believe everybody should have mobile messaging – it is not a privilege service that is meant only for a certain segment of the market.
With Nokia Messaging, our customers can simply and affordably gain mobile access to the world's most popular email and IM accounts,” said Tom Furlong, Senior Vice President, Consumer Messaging, Services and Software, Nokia.
He said that the company is making mobile messaging an affordable experience for everyone, not just for those with specialized phones designed for messaging, but for everyone with a Nokia device. He also noted that Nokia has responded with solutions to bring messaging to the broadest range of devices and to ensure the service works with the most popular messaging services in the market. He said that Nokia Messaging will launch commercially in the first quarter of 2009 in Australia, Finland, Germany, the Netherlands, Singapore, Spain, the UK and Venezuela, and in select countries later in the year. |
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