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SWOT Analysis of Mobile Phones in Four Countries:

Comparing India, Ethiopia, Kuwait, and the United States


Kenneth R. Fleischmann Taverekere (Kanti) Srikantaiah
University of Maryland University of Maryland
4105 Hornbake Building, South Wing 4105 Hornbake Building, South Wing
College Park, MD 20742-4345 College Park, MD 20742-4345
kfleisch@umd.edu tsrikant@umd.edu

ABSTRACT 2002).
This study explores the relationship between mobile
technologies and economic and social development in four BACKGROUND
countries, two developed (USA and Kuwait) and two The gap in the technological capabilities between the
developing countries (Ethiopia and India) using SWOT colonizing nations that have primarily become the
(strengths, weaknesses, opportunities, and threats) analysis. developed nations of today and the colonized nations that
Mobile technologies are a significant part of ICT have primarily become the developing nations of today
investment around the world and they play an increasing played a tremendous role in geopolitics during the fifteenth
role in sectors such as education, agriculture, industry, and century and beyond. European explorers treated
health sciences. This investment and development applies technological development as an indication of the level of
not only to the urban environment but also extends to rural sophistication of a society, and such evaluations played a
areas. This paper discusses the economic and social impact significant role in the colonization efforts (Adas, 1989).
in those sectors and outlines the benefits. The analysis also Specifically, as information and communication
considers the commitment of the government and industry technologies have evolved, their adoption occurred at
in influencing product and process areas of mobile significantly different rates in developed and developing
technologies and the innovative approaches carried out to nations. For example, in the 1970s, developed nations made
meet the needs of the market environment. use of computer applications for electronic information
processing and information access in the business sector
Keywords and government sector that provided competitive
SWOT analysis, cross-cultural comparative analysis, ICTs, advantages over developing nations with less access to
mobile phones ICTs (Fong, 2009). At that time, because of the
unsupportive economic environment, most developing
INTRODUCTION countries could not benefit from computer technology. The
Information and communication technologies (ICTs) are digital divide has caused considerable differences in
transforming society. Specifically, mobile phones are economic development. Much more recently, however,
revolutionizing access to computational resources and to with the help of national governments, NGOs, Industries,
the Internet in developing countries. The mobile industry in and international assistance, many developing countries
many countries has a positive impact on economic growth have made some progress in beginning to close this gap to
and development. The mobile industry enables direct some extent, particularly in the case of mobile devices,
foreign investment, and multi-national corporations are which do not require a wired infrastructure and are
more likely to establish headquarters and factories in generally fairly user-friendly and easy to use (Heeks, 2009).
countries that offer better ICT access including mobile
phones. The benefits of the mobile phone industry in ICTs enable communication and the electronic capture,
various sectors have been discussed with reference to processing, and transmission of information through many
education, health, and manufacturing (Demeke & Biru, technology applications. They may include, in addition to
earlier technologies such as radio, TV and Print media, the
recent prominent ones such as Internet, mobile phone,
This is the space reserved for copyright notices. pager, and personal computer (Fong, 2009). Our research
study focuses on the use of mobile devices such as smart
ASIST 2011, October 913, 2011, New Orleans, LA, USA. phones in developing nations. These new technological
Copyright notice continues right here.
developments have become available to growing numbers
in developing nations helping to bridge the digital divide.
A World Bank report in 2009 points out that there are
positive relationships between ICTs and economic growth
in developing countries ICTs are crucial to achieve What are the negative characteristics and
poverty reduction promoting economic and social welfare. disadvantages? What are the weaknesses perceived by
ICTs have helped citizens in many developing nations to the country?
access information on education, health services,
What do outsiders consider weaknesses of the country?
employment and to compete in the global marketplace.
ICTs are also increasingly seen as an enabler in other
External Analysis
development needs. Research studies point out that the
Here, we address research questions such as:
national culture and policies play a dominant role in the
planning and implementing ICT in developing countries. What opportunities exist for these countries to make
There needs to be a match between ICTs and national the mobile phone industry a success in their own
culture, particularly in historically technologically environment as well as in the outside environment?
underserved developing nations (Heeks, 2009). Our
What opportunities exist for the country to grow and
research study focuses on the analysis of this aspect in
sustain?
understanding ICT promotion and use in developing
countries. What areas exist as opportunities?
What factors block the opportunities and progress?
METHODS
Strengths, Weaknesses, Opportunities, Threats (SWOT) What external elements could cause problems in these
analysis can be used to study relationships between the countries for the mobile phone industry?
planning aspects in a country and internal and external
environmental factors. Through SWOT analysis, we can What factors are beyond the control of the country?
assess the value of mobile phones in the context of existing How is the ICT sector influencing the mobile phone
policy, regulatory and legal framework, particularly in the subsector?
areas of information sharing and work towards
strengthening the capacity to regulate the sector (World RESULTS
Bank, 2004). Mobile technology can increase connectivity
India
and provide access to communications throughout a
Indias mobile market is making strong strides with the
country. International experience suggests that the
improvement of economy and consumer sentiment. The
expansion of communications (through mobile phones)
total market for ICT products and services in India is
networks is strongly correlated with economic growth, and
expected to increase from $16.3 billion in 2010 to $34.3
the access in rural areas diminishes the urban/rural
billion in 2014, which will influence the mobile industry in
economic disparities, provide access to market information,
the country. In spite of excessive government regulations,
and facilitates service delivery in health, education, and
mobile industry growth continues to be strong. As of
others, reinforcing poverty reduction (World Bank, 2004).
December 2010, India had 791,381,574 mobile phones,
Through this paper, we seek to develop a better equating to roughly 66.36% of the population (Business
understanding of the mobile phone industry within four Monitor International, 2010). The ratio of landlines and
different national contexts: India, Ethiopia, Kuwait, and the mobile phones is significant (35.77 million landlines when
United States. We apply SWOT analysis to these four compared with 791 million) considering that the GNI of the
countries using both internal (strengths and weaknesses) country in 2008 was only $1,040 (Business Monitor
and external (opportunities and threats) analysis. International, 2010a).
In terms of strengths, the Indian market has a large number
Internal Analysis
Here, we address research questions such as: of mobile phone users. The Indian cell phone market has
benefited from competition. The market plays host to a
What strengths do these countries have as an advantage large number of strategic investors including Singapores
in the mobile phone industry? SingTel, Vodafone of UK, Telekom of Malaysia, Norways
Telenor, Etisalat of UAE, Japans NTT and DoCoMo, and
What are the tangible and intangible attributes within
Russias Sistema. Demand for mobile value-added services
the control of the country?
is strong and expected to grow. Finally, there is also an
How does the country perceive strengths internally? abundant availability of skilled and technically qualified
workforce with English language proficiency (Business
How do outsiders perceive strengths of the country?
Monitor International, 2010a).
What are the disadvantages for mobile phone industry
In terms of weaknesses, the mobile market is still highly
in these countries relative to others?
skewed towards prepaid users as such, high inactivity
What are the distractions, from the countrys levels may be brining down revenue. There are some delays
perspective, to attain the desired goal? in 3G licensing due to conflicts between government
bodies. The mobile network infrastructure in rural areas
remain limited. Multinationals dominate, which has local staff. Investment in mobile industry might lead to
significantly hampered the development of successful local increased social and economic returns. Finally, there is the
ICT hardware and software manufacturers. India occupies chance to expand mobile services to other areas, especially
seventh place in regional ranking. Indias infrastructure is rural areas, to cover the entire nation.
overall inadequate to support the large population and
In terms of threats, one important consideration is political
number of ICT users. There is weak ICT patent protection
instability. Further, another important threat to consider is
and high piracy and patent violation rates. The government
friction between the government sector and the private
has been slow to enact regulations and guidelines for the
sector.
mobile sector. Finally, security issues increasingly weigh
on the minds of investors (Business Monitor International,
Kuwait
2010a).
According to 2009 figures, Kuwait had 553,500 landlines,
In terms of opportunities, there is a great push to expand and 3,876 mobile phones, which is surprisingly low,
and upgrade to 3G. Government license fees will be cut by especially considering that the GNI of the country in 2009
33% to cover wider areas, which is encouraging for the was $43,930 (Business Monitor International, 2011).
industry. Finally, the government could enhance the
In terms of strengths, Kuwait boasts relatively high IT
competitiveness of the mobile industry through further
penetration. Kuwait boasts liberal market access policies.
liberalization and deregulation (Business Monitor
Kuwait is one of the most advanced states in the Gulf
International, 2010a).
region. The government has invested heavily in
In terms of threats, the governments conservative measures infrastructure. Finally, Kuwait is arguably the most
may inhibit 3G and other licensing processes. Network democratic state in the Gulf area (Business Monitor
capacity could struggle to keep up with demand. If International, 2011).
migration were made easier, it would add pressure on
In terms of weaknesses, there is a small domestic market
operators to retain existing customers. Finally, the global
with a low level of subscribers. Services are expensive,
economic slowdown and rising costs could slow growth
reflecting on the limited degree of competition. For now,
(Business Monitor International, 2010a).
mobile phone services remain under the monopoly control
of the state with strict government controls. Finally, the
Ethiopia
economic dependence on oil has slowed other sectors of the
In terms of phone industry, in 2009, Ethiopia had 915,000
economy (Business Monitor International, 2011).
landlines, and 50,369 mobile subscribers (World Bank,
2006), a significantly lower ratio for mobile phones than In terms of opportunities, the rising price of oil worldwide
India. The GNI has a strong bearing on this aspect, which in will only further drive the economy. There is a major
2009 was $330. emphasis on e-government. Kuwait is a major player in
regional trade. Finally, the privatization of Kuwait Public
In terms of strengths, Ethiopia is eager to absorb new
Telecom could bring increased investment and arrival of
technology, and the government is making aggressive
new skills (Business Monitor International, 2011).
plans. The Ethiopian Telecommunications Corporation
(ETC) in charge of ICT industry is providing incentives to In terms of threats, there is significant regional instability,
push the mobile industry. As a result, there is significant especially during the recent Arab spring. There are also
growth in both government and non-government some effects of the global economic slowdown.
entrepreneurship for the development of mobile Government restrictions could undermine long term
applications. Specifically, there is strong development in development. Divisions within the government are
the capital of Addis Ababa as well as the nearby towns hampering policy making on the way to reform mobile
Debre Zeit and Nazreth. Promoting e-commerce will have a industry. Finally, a lack of protection of intellectual
positive impact on the mobile industry (Demeke & Biru, property is hindering development (Business Monitor
2002). International, 2011).
In terms of weaknesses, there is a significant absence of
The United States
resources for development. Customs regulations are too
In terms of communication, in 2009 figures, the USA had
rigid. Hackers and contraband goods are not addressed.
141 million land telephones and 286 mobile telephones.
There is a lack of training for technical staff. Finally, most
Strong growth in the U.S. mobile market is in part to the
of the focus is on Addis Ababa and the surrounding towns,
increasing data-centric mobile phones, especially smart
which ignores other areas (Demeke & Biru, 2002).
phones. Verizon is the market leader with 35.7% of
In terms of opportunities, Ethiopia can become a big player wireless revenues. AT&T was second with 34.8%. Sprint
in the Sub-Saharan belt. Collaborating with external and T-Mobile are the next two companies contributing to
vendors would help the mobile industry grow. Inviting the mobile market (Business Monitor International, 2010b).
investors from abroad would enhance resources. There is
also the potential for capacity building through training of
In terms of strengths, the mobile market in the USA is Contrastingly, Ethiopia has not yet caught up with India in
dominated by postpaid subscribers, generating high average this regard, but its telecommunications development may
revenue per user. There is strong healthy competition with eventually follow that of India given similarities in their
four national operators and several smaller regional players. economies and the distributions of their populations
Smart phones such as the iPhone and various Android (however, in Ethiopia, given the concentration of economic
phones have helped to boost 3G and 4G service usage, and political power in Addis Ababa, it is probably not too
especially including data in addition to voice (Business surprising that more geographically compact landlines still
Monitor International, 2010b). dominate over mobile phones, indicating that people in
rural areas are being largely left behind in the information
In terms of weaknesses, national operators grow stronger
age). Thus, there are important lessons to be gained from
with little room for regional players. Further, the market is
each of these national contexts.
split between two technologies: CDMA and GSM
(Business Monitor International, 2010b).
CONCLUSION
In terms of opportunities, the expansion of mobile In this research, the impact of mobile technology for
networks, particularly for 3G services and 4G services, economic and social development was explored. The
presents significant growth opportunities. Mobile phone analysis showed varying degrees of impact in sectors such
growth showed a significant increase in recent years as education, agriculture, industry, and health sciences in
pointing out further growth, while fixed line phones have the four countries, two from developed and two from
declined substantially. The USA boasts the Worlds largest developing environments selected for the study. The
economy with an impressive record of entrepreneurial differences exist not only in the context of countries but
dynamism, innovation, and high R&D. The legal system is also in sectors reflecting on consumer and trade policies.
friendly to business and supports entrepreneurial activities The application of SWOT analysis proved beneficial in
(Business Monitor International, 2010b). understanding these complex relationships. Investment in
ICTs, especially in mobile technologies, thus plays an
In terms of threats, there is intensified competition from important role in the overall economic development of
China and other low-wage economies. The global economic developed and developing nations.
slowdown has significantly impacted the economy,
especially in terms of job growth. Problems in the USAs REFERENCES
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DISCUSSION
Comparing across these four SWOT analyses, we can see Demeke, M., & Biru, T. (2002). ICT Penetration and
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