1. As mobile expands into new regions and new population segments in emerging markets, digital inclusion — the adoption of the mobile internet and the wider socio-economic benefits associated with this — will grow. However, the pace at which this happens will be dependent on overcoming a number of barriers. Infrastructure and affordability of devices and tariffs are well recognised. Less widely apparent — but of crucial importance — is the availability of locally relevant content. It is this factor and the dynamics driving it that we focus on in this report.
Despite a nearly 20-fold increase in mobile data traffic since 2009, many individuals in emerging markets are yet to fully embrace the mobile and digital revolution because they lack sufficient ‘local content’ that is accessible, useful and relevant to their livelihoods, wants and needs. The availability of locally relevant content, defined for the purpose of this report as content or information that has a direct impact on the everyday lives of people throughout the developing world, is key to bringing the benefits of the internet to a wider user base (particularly mid and low income individuals). Content can be localised — or made locally relevant — in different ways, such as translating international content into local languages, customising it for local relevance, or by the local population contributing directly to content creation. In the end though, the most important criterion that defines localisation is its relevance for local consumers. The local population will best understand what is relevant, and giving the power of content creation into their hands – both individuals as well as developers – will help grow the local content industry.
In emerging markets, customer engagement in the mobile content ecosystem has been dominated by social media services, which rely heavily on user input and user-generated content. These services are an important way to increase communication, engagement and ultimately digital inclusion, acting as another layer to traditional mobile voice and SMS. But making the content and services relevant, accessible, and available to the users in their own language is essential in bringing the full benefits of the mobile internet to the next billion users.
2. There is much more to making content relevant to local people than simply translating it. For one, there are infrastructure challenges including network coverage, content hosting availability and device compatibility. But there are also more nuanced challenges around payment limitations, cultural factors and government or third party support.
Unlike in the developed world, mobile internet penetration has a long way to go in most emerging countries. While 2G coverage extends to about 85% of the population on average, 3G networks currently cover between 50% and 70% compared to over 80% in the developed world. Moreover, the majority of people in emerging markets currently own feature phones, not smartphones. Smartphone penetration will rise (driven by falling handset prices, rising incomes and improved literacy), but we believe it will be another 3-4 years before actual human users surpass the number of people on the ground using feature phones. This makes it essential to balance the focus of local content generation for both smartphone and feature phone users. Language and literacy barriers, as well as other barriers such as lack of local hosting and payment limitations (a high proportion of the population do not have access to formal financial services), make achieving scale with and GSMA Intelligence Local world — content for the next wave of growth 4 monetising content difficult. In addition, challenges such as a lack of understanding of the target market, and government interference in information flow also need to be overcome to drive creation and consumption of local content. It is important to be mindful of these challenges while developing content for emerging market users.
3. Ultimately, these challenges (and the opportunity cost of not addressing them) merit a collection of efforts from key players across the mobile ecosystem. For emerging markets in particular, mobile operators are well placed to effect change given their network assets, local presence and increasing involvement with entrepreneurial hubs, and trusted relationship with consumers. However, there is no one stakeholder at the nexus, with handset makers, content developers, internet players and NGOs also key.
Relevant content gives people added impetus for mobile internet and value added services (VAS) use, and increases digital empowerment of users on all rungs of the socioeconomic ladder — a key objective for industry and government alike. As for the wider mobile ecosystem, we believe an increase in the amount of relevant local content would unfurl a virtuous circle of raised awareness, attracting developers, increasing innovation, and increasing interest in generating more relevant content. Additionally, operators can benefit from an increase in subscriptions, customer loyalty, and revenue through data services.
Realising the benefits of local content, though, is largely dependent on a commitment from the industry as a whole. While operators are best placed to use their own assets such as tools, platforms and hosting technology to help content developers achieve scale without having to reinvent the wheel, developers can improve the local relevance of services by creating specific content where required, adapting existing content where necessary, and ensuring their content is accessible for users across the mobile spectrum by optimising certain content to work on feature phones via slower data connections. Device manufacturers can similarly contribute by ensuring that devices offer the best and most intuitive user experience possible for mobile owners in emerging markets, facilitating the consumption as well as generation of local content. Internet players can build on their existing services and expand into new markets, creating a platform for local content to reach the widest audience possible. The wider ICT industry can look to establish local internet exchange points (IXPs) within the country to cut costs, and expand local hosting to improve visibility for content developers. Finally, regulatory, financial and operational support from government and non-government organisations (NGOs) can help target content towards consumer use cases that market-based approaches would perhaps not — particularly in the areas of financial services, health, agriculture, education and employment.