Emerging Market Opportunities

For the world’s emerging economies, more than 65% of total ICT expenditure went into communications between 2003 and 2007. In 2007, Brazil’s communications expenditure as a percentage of total ICT expenditure was the highest at 76,8%.  This was followed by China 75,2%, India 73,9% and Russia 73,6%.  Except for India and Brazil, IT services accounted for a higher percentage of total expenditure comparing 2000 to 2007. For China, IT services accounted for 4,5% in 2003 and rose to 8,4% in 2007.

Demand for ICT services in these economies is strong. The United Nations forecast that in 2050, 54,5% of the world’s population will be in Asia, 27,2% in Africa, 7,6% in Latin America and the Carribean and only 4,2% in developed economies like North America.

Emerging markets also represent significant growth opportunities in respect of telecommunications services as evidenced by the expected African growth in the GSM operator community.  The leading vendor, Cisco estimates that the entire network market will in the next five years experience a 75 fold increase in bandwidth demand as a result of rich media and video-enabled applications.

From the operators’ point of view, the Mobile Telecommunication market in the Middle East and Africa (MEA) is expected to grow (CAGR) by 8% from 2008 to 2013 or 62% over the period, and will reach US$105-billion by 2013. According to the same study conducted by Goldman Sachs and the IMF, the penetration of mobile services will grow from an average of 48% to an average of 88% over this period.

In spite of the current general global economic conditions, emerging markets are still growing.  As a result of Government infrastructure spending, we believe that growth will continue albeit not as robust as in the past few years. Nevertheless we expect the demand for our solutions, products and services to be strong.

Considering several drivers such as Mobile Commucations, Internet and Bandwidth growth, we are certain that more opportunities will continue to materialise. ConvergeNet remains focused on enhancing its competitive strengths and improving the company’s presence in several fast-growing markets.