Mobile World of opportunity for Israeli start-ups

Operators are seeking results, not ideas.

The world's largest cellular exhibition, the 2010 Mobile World Congress opens in Barcelona today, presenting Israeli mobile technology companies an extraordinary opportunity to present their achievements and advantages in this rapidly developing market, which is becoming a dominant market in the global economy.

Hundreds of Israeli companies already operate in the global mobile market, many of them start-ups. However, as a growing and dynamic market, it offers a plethora of possibilities and business opportunities for more companies. Nonetheless, we must not forget that the mobile market is not isolated from global economic realities, and the use of mobile telephones is affected, and will continue to be affected, by the global recession. The supply of capital for investment in technology ventures in the mobile market is also in decline.

Recent economic analyses and forecasts by Gartner Group predict that average revenue per user (ARPU) for mobile telephones will decline under the impact of the global economic crisis, due to rising unemployment and falling private incomes in developed economies. At the same time, pressure is being applied on operators by regulators in some emerging markets to lower the cost of calls.

Nevertheless, in growing markets, such as India, China, and Brazil, we will continue to see growth in the number of mobile network users. But this growth has a sting to it: as penetration rates increase, competition intensifies, and user prices fall, as subscribers switch to fixed-rate plans. Another channel for operators' revenue growth is the increase in data transmission, mobile surfing, and other added value services, especially given the spread of smartphones. In fact, development in this market focuses on the expanded use of smartphones, which will boost data transmission.

The business model of the Israeli mobile industry is based on combining unique Israeli technologies with the needs of large operators, on the basis of use trends and future consumption patterns of end-users.

The concept behind the product is that appearance is no longer everything. Maturity, simplicity, applicability, and adoption by customers are the operators' milestones for the launch of a new service.

The great opportunity for Israeli companies lies in their proven advantages and experience in developing successful and applicable solutions that combine telecommunications and software. High-tech entrepreneurs and ideas pacesetters in telecommunications should take care to invest wisely in creating clear concrete and applicable (technologically and economically) milestones for a product to show how a telecommunications operator can reach tens of millions of customers.

Avi Hefetz is the director general of the Israel Export and International Cooperation Institute, which is organizing the Israeli pavilion at the World Mobile Congress

Published by Globes [online], Israel business news - - on February 15, 2010

© Copyright of Globes Publisher Itonut (1983) Ltd. 2010

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