A proposal on business modeling for mobile operators that wants to reach the growing emerging market middle class with mobile internet

Kasper Erbo Mortensen & Kasper Andersen

Student thesis: Master thesis


Outline of the subject: The objective with the thesis at hand is to provide mobile operators with a business model proposal for mobile internet in emerging markets. To achieve this goal we have carried out an end user analysis on the consumer needs and demands in emerging markets. Here we have mapped out the requirements that end users have to mobile internet. Next, we have conducted a marketing analysis to identify the marketing aspects of mobile internet for mobile operators. The findings from our end user analysis and marketing analysis have been combined into our business model discussion. Herein, we have discussed what a mobile internet business model can include. Based on this discussion, we have proposed a business model. The business model proposal that close this paper is put forward with the aim to support mobile operators in emerging markets reaching the middle class consumers with access to affordable mobile internet. Theories and concepts applied: To conduct the end user analysis and the marketing analysis, we have used consumer behavior theory, theory on disruptive technologies, pricing theory, competition theory, and transaction cost theory. The theories have been applied in this thesis in order to provide a set of basic premises‟ that functions as the academic base in our analysis. For the business model proposal we have made use of the concept of “The 9 Building Blocks”. This concept has also guided us in structuring the discussion leading up to the proposal. Main findings: Our analysis shows that we basically see two different user segments in emerging markets. First, we have discovered that the lower middle class consumers earn 2-12 USD/day, most often living in rural areas. This segment makes up around 87% of the emerging market middle class. Second, we have found that the medium-to-upper middle class consumers earn 12-50 USD/day, often living in urban areas. This segment comprises around 13% of the middle class. In the discussion, we have calculated that total ICT services must not be priced higher than 10.83 USD/month on average for the lower middle class and 46.85 USD/month for the higher middle class. The first segment can only afford a basic handset with browser access, while the other middle class segment has higher income power and an IT literacy level necessary to smartphones. In the business model proposal, we suggest IT learning activities for the lower segment to beat the IT literacy lack. We also suggest services to be tailored to local contexts. The higher segment speaks English and will as such demand international services like Facebook.

EducationsMSc in International Business, (Graduate Programme) Final Thesis
Publication date2010
Number of pages108