When investors try to get a head start on the next big technology wave, the first markets they normally turn to are the traditional powers and the trendy emerging markets; Brazil, China, India, and so on.
However, as we get deeper into 2016, the markets investors should draw closer to are actually the true emerging markets, or what APTelecom refers to as MAVIN markets: Mexico, Angola, Vietnam, Indonesia, and Nigeria.
Here are five trends coming out of the MAVIN markets, and how they are paving the way to make a transformational impact across the technology sector.
Storage and Network Criticality
Storage is becoming more and more important. Cloud solutions and local caching mean moving things to the edge of the network closer to the eyeballs. Given that, investors should keep a close eye on Angola. Why? In Angola, Angola Cables Internet Exchange has seen an 80 percent increase in traffic in the last year alone and is carrying more than 4Gig of local traffic to service West Africa. Large colocation providers are seeking M&A opportunities to break into these markets or partnering to support growth for their own international needs and domestic core requirements.
MAVIN Equals Mobile
Mobile devices remain the dominant tool to access the internet, and that’s not going away anytime soon. Exponential growth will only continue in the MAVIN markets relative to traditional markets. Inexpensive Chinese smartphones are starting to flood the market, aiding the growth of internet penetration in MAVIN markets that previously were underserved as a result of cost prohibition. For example, Indonesia has seen an increase in smartphone penetration of 15 percent in the past year alone. This is largely driven by the affordability of less expensive options in the handset market. Along with adoption comes innovation, so keep a close eye on MAVIN when it comes to mobile.
Investing in Fiber
Fiber remains essential to supporting user growth. Submarine cable capacity and terrestrial capacity are critical for accessing content. Cloud solutions, IoT needs, and expansion of existing infrastructure all require continued capital expenditure to maintain and support the growth in teledensity and broadband access. Unlike Western Europe and the U.S., where submarine cable capacity have been largely neglected over the past few years, MAVIN markets are investing and seeing a positive increase in user experience – and the resulting reduced latency and lower pricing are having a direct impact on economic growth and GDP in these countries. According to our latest predictions, more than a half billion dollars in submarine cable capacity will be built in the next 24 months from a handful of our providers alone in the MAVIN markets. Fiber will be key toward driving growth and innovation, and these markets already have a head start.
MAVIN is Electric
Access to power remains a challenge in certain developing markets and is a barrier to growth in the context of internet access. Rates of power and availability are a challenge. Local infrastructure needs to catch up to support the digital divide, making the jump to the connected world. If there’s no power, there’s no service. While this issue has long plagued MAVIN markets and created barriers for investors, tremendous strides have been made over the past few years, and access to power in MAVIN markets is no longer an insurmountable hurdle. This sets the stage perfectly for new technology innovation and investment in next-generation companies that wouldn’t have previously succeeded.
MAVIN is ‘Local’
Many users in markets such as Africa, Brazil, and Southeast Asia prefer to use local apps such as WeiChat instead of WhatsApp, as regional developers offer different security needs and cater to local tastes and preferences of consumers in non-traditional emerging markets. And there’s no better place to turn to than the MAVIN market when it comes to adoption and innovation in the local app space. For example, mobile money apps in Africa dominate local payment processing and will undoubtedly cause a threat to the traditional banking structure as we know it. It’s coming sooner rather than later, and investors should take notice.
Eric Handa is Co-Founder and CEO of APTelecom, a telecom and fiber consulting company.
Edited by Maurice Nagle