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S i2i: Leading The Switch Revolution To A Digital Lifestyle
Corporate Digest | 26 August 2011
By: Xavier Lim
Articles (51) Profile
By: Louis Kent Lee
Articles (199) Profile

In the 21st century that we live in, it is not uncommon for people to be glued to their mobile devices as they surf their favourite websites, check their stocks, or even log in to any messenger services to chat with their friends. With the world embracing a digitally connected lifestyle, we have officially moved into the era of a new kind of internet, Mobile Internet.

Moving its chess pieces with absolute finesse and careful planning, S i2i, formerly known as Spice i2i has been making significant progress in targeting key markets around the world to tap on and provide the service of “Mobile Internet” at an affordable price. Its expansion footprints marked by its “i2i belt” (Ivory Coast to Indonesia) sees S i2i’s presence in a total of 41 countries such as Indonesia, United Arab Emirates, Thailand and Singapore.

Silver Lining In Developing Markets

“The world that we live in right now is actually separated into two; namely the developed world and the developing world,” remarked Dr. Bhupendra Kumar Modi, Chairman of S i2i, during an exclusive interview with Shares Investment (Singapore).

Dr. Modi further explained that the developed countries, no doubt being fast and well-connected, are very limited by the heavy problems surrounding it. Examples like the U.S. downgrade and Eurozone crisis are putting a serious bottleneck which limits growth potential of developed countries.

“Developing countries are, however, on the different side of the pitch. Although it’s not as fast or well-connected as compared to the developed countries, the growth potential, especially that of internet usage, is one that is limitless. This is why we chose to expand S i2i’s footprints in these developing markets,” Dr. Modi said.

A compelling issue many of such developing countries are facing pertaining to setting up internet infrastructures is the high costs involved in the installation of the fibre wires. Therefore youths, whom are generally the targeted crowd for the internet wave to kick start might not even have the capability to own a PC at home, let alone having internet access. However, Dr. Modi does not see this as a bottleneck and views this as a disguised opportunity instead.

“It is not uncommon for youths in the developing countries to have their first exposure to the internet via mobile phones, because the costs of owning a PC (excluding the infrastructure costs of having good enough fibre wires to support the usage) clearly outweigh the cost of owning a mobile phone that could do the exact same thing,” Dr. Modi pointed out.

Elaborating further, Dr. Modi commented that the price of owning a computer, exclusive of internet data is about $200-$400, while a mobile phone that supports basic internet data usage of 2.5-2.75G could very well cost only $40-$50.

“This stark difference will evidently make mobile internet the more economical choice and also eradicate the need to migrate users who are accessing the internet via their computers to their mobile phones.” said Dr. Modi confidently.

Dr. Modi pledges .3 million donation to the Lee Kuan Yew School of Public Policy
Dr. Modi pledges .3 million donation to the Lee Kuan Yew School of Public Policy

Developing Low Cost Applications For The Masses

As developing markets are in the infancy stage pertaining to mobile internet, most phones run on 2.5-2.75G instead of the commonly seen 3G here. Thus, applications which are commonly supported by 3G phones may not be supported by the lower tiered bandwidth phones at all.

Having envisaged this issue beforehand, S i2i has mitigated this by working closely with Chinese developers to pre-load 50 most commonly used applications ranging from banking, shopping to movies onto its mobile handsets.

“We want to be on the side of users, why limit them to only 3G apps when the infrastructure for 3G is obviously not ready in these developing markets yet?” explained Dr. Modi.

Having the same foresight, developers of said applications are seeing the same potential in developing markets and are flocking to S i2i, effectively putting S i2i in a position where it could not only select the best application for its mobile handsets, but work on concessionary deals like profit sharing.

Sourcing Local Champions

Adhering to the basic rule of “When in Rome, be like the Romans”, S i2i has been successful in establishing a foothold in these developing markets by acquiring each country’s local leading brand, or in their coined terms, local champions. Some local champions S i2i have acquired are ‘Wellcom’ in Thailand and the Greater Mekong Sub-region, ‘CSL’ in Malaysia and ‘Nexian’ in Indonesia.

The recent acquisition of ‘Nexian’ from Affinity Group is one that is of strategic importance. The ‘Nexian’ brand name is one that is loudly heard in Indonesia. It has the second largest market share with around 25% of mobile phones supplied in Indonesia, and the said acquisition will allow S i2i to leverage upon Nexian’s substantial presence in Indonesia and penetrate the mobile internet market there.

While preserving the brand equity built up in those emerging markets, S i2i is also looking to combine all its acquisitions under one umbrella S brand. Meaning consumers in the region will soon be able to get their hands on S-Nexian, S-CSL and S-Wellcom branded phones as they make the switch to the mobile internet. S i2i also plans to launch its range of phones into the Singapore market shortly. This will allow S i2i to greater recognise the synergistic benefits of its acquisitions through an expanded retail reach and lower procurement costs from integrating its supply chain.

“Although Nokia, S i2i’s biggest competitor, has a comparatively large market share of approximately 40 percent in Indonesia, S i2i is still reaching out to its target audience without much resistance,” commented Dr. Modi.

He explained that this is because Nokia is now in the middle of a war with the big boys like Blackberry, Apple, HTC and Samsung to claw back market share in the developed markets.

“With the big players and Nokia fighting so fiercely, Nokia doesn’t really have much room to regard S i2i as an immediate threat to their market share, and this is also one of the reasons why our progress has been without much hiccups.” Dr. Modi stressed.

S i2i has also taken decisive steps to build up its technological capabilities, having entered into a strategic partnership with Mediatek Inc. through its sister company “Spice Digital”. Mediatek is a leading fabless semiconductor company for wireless communications and digital multimedia solutions with sales of US$3.9 billion in FY2010. The partnership allows S i2i to tap onto Mediatek’s chipset technologies which are currently used by top mobile phone brands across the globe.

On top of that, it is only a matter of time before the entire world moves in full gear into the era of mobile internet and ensuing digital lifestyle. Coupling this with the fact that developing markets, which i2i belt mostly consists of, will eventually match up to the same level of playing field of developed markets, S i2i looks set to lead the switch to the digital lifestyle comfortably.

This is a co-written article of Shares Investment, which lays out the analytical ideas and thoughts of the authors, who are well versed in investments and market concepts.

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