Late entrants onto the mobile market do not have an easy life! Competition is fierce: existing providers are big, firmly established, well positioned, and have cash reserves for a rainy day. The users are generally happy with the offers available to them. A lot of marketing tools are already being used. How, then, can late entrants achieve the growth that they need?

Telenor, Telefonica, and Vodafone have led the way, Orascom, Telmex, and Etisalat are diligent and successful copycats. Their strategy is amazingly simple: concentrate on mobile and invest in countries with high populations and low penetration rates. By anticipating the growth potential in emerging and ­developing countries, this strategy has been pulled off successfully. The only trouble is that it is no longer a secret. And the number of countries which still fulfill the criterion of having ­unexploited potential has faded to insignificance. Anyone searching now will ­either have to acquire an established mobile operator at a ­premium price or look for an opportunity as a late entrant in one of the more exotic countries.  

How successful are the late entrants? Is it possible to balance out the disadvantages of a delayed market entry? Figure 1 shows the relative performance – i.e., the market share achieved as a function of time in the market – of third GSM mobile operators in various countries around the world. South American providers have been excluded due to their specific TDMA-GSM network migration situation, and operators in markets with extremely large geographic areas and strong regional differences – such as India, China, and Russia – have also been excluded.  

Late entrants often have limited success 

The figure shows a number of successful mobile operators in their sixth or seventh year of operation with market shares of around 30 percent.

 

Particularly well-known examples of late entrants are Kyivstar in the Ukraine and Cosmote in Greece, both of which had reached market shares of over 40 percent by the end of 2007. 

The success enjoyed by Kyivstar and other high-performing third mobile operators can be partially attributed to the first or second operators’ weaknesses. This was, however, certainly not the case for Cosmote, the mobile division of the Greek ­ex-monopolist OTE. Their background has given the operator a number of advantages for market entry: positive regulatory conditions along with economies of scale and infrastructure, reach, personnel and sales advantages. Less success would have been more surprising.   

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