Why I need to look at Asia: BlackBerry’s Indonesian Phenomenon

I sent out the newsletter yesterday evening detailing my upcoming 7-day trip to Hong Kong. In the email and here on the site I asked for reader suggestions on some of the movers and shakers I should aim to connect with while I’m there.

I’ve had a fantastic response already. And here was me thinking most of you weren’t working at the weekend, especially given we’re already into the first week of December.

The Asian mobile marketplace is one that’s long fascinated me, but one that I’ve not ever managed to witness in person. I haven’t, for example, walked around a phone shop in downtown Hong Kong or pressed the flesh at an Asian mobile networking event. I’m sorry to say this is the same for most of the emerging markets too.

I did plan a world tour, back in 2009. My aim was to spend 3 weeks in most of the world’s big cities to get some kind of flavour for the worldwide mobile industry. It’s far, far too easy to bend to the will of the Western iPhone obsessives. Indeed, the inevitable narrow focus on the high end Western markets is one of the reasons Nokia gets one hell of a kicking from the media. Despite selling 110 million handsets in Q3, the company is effectively considered ‘dead’ by much of Silicon Valley. That viewpoint infects many of the European and British media too, and especially some of the key analyst and industry experts.

And although I do try to keep an eye open for the emerging markets, the fact is, I need to know more. Whether it’s Brazil or India, China, Indonesia or South Africa, these markets are absolutely booming. When we refer to ’emerging’ markets, I think there’s a temptation to imagine some farmer in the middle of a rice field renting access to the village’s 5-year old Nokia handset in 1-hour increments. And while the life-changing potential of mobile is in no doubt, I don’t think the ‘farmer-texting-for-grain-prices’ is the whole story. Not at all. Especially after the 30-odd briefings I had with an array of people working in the Latin American mobile economies. One chap I met — from Binbit — blew me away with one statistic: His company alone accounts for something like 80% of the Nicaraguan mobile content market.

Now I know nothing about Nicaragua. But I need to know more about this chap, his company and what they’re doing there. So I will shortly be popping over to Latin America and taking a tour around there. It’s time to get out and discover directly.

But it is to Indonesia that I turn to today.

Last week I was in Berlin with for the BlackBerry Alliance European Summit. I sat down with two chaps from RIM: Mike Kirkup and Rory O’Neill. Mike runs RIM’s developer relations programme and Rory is Director of Solutions and Alliances Marketing, EMEA. (Read my post from the event last week).

When I do ‘briefings’ with executives, I usually have a series of questions I’d like to ask in my mind and I ‘surface’ those questions as the conversation goes on. Then I like to end with a ‘so, what else is new‘ or ‘what should I have asked you‘ or ‘anything else I’ve missed?‘ This is a technique I learned from a chap who writes regularly for the Financial Times. It’s always good to give the interviewee the opportunity to either reiterate a point or introduce a new subject.

Rory used the opportunity to focus my attention closely on RIM’s achievements with their BlackBerry Alliance partnership programme — so much so that I actually generated this additional post as a result. Mike then took me in a different direction.

“I was recently in Indonesia,” he explained, “And what I saw there was fascinating.” .

It turns out that RIM is huge in Indonesia. Absolutely massive. Indeed IDC reckons that BlackBerry shipments to Indonesia rose 79% on-year in the second quarter of this year and that smartphone shipments to Indonesia will grow by 56.6% for the entire year.

Now then.

Here’s where it gets a little interesting.

Mobile operators are, it seems, prohibited by law from selling handsets in Indonesia. This task is instead handled by an array of distributors (much like, for example, the Carphone Warehouse in the UK).

So the Indonesian operators sell airtime. The distributors sell handsets. There is no linkage between them.

Just think about the dynamics that then creates across the industry.

Can you imagine the UK or American Governments legislating that? The effect would be quite phenomenal.

Indonesian operators are therefore utility service providers. There is no confusion, there is no messing around — the operators can focus on delivering excellent service.

Mike explained that the introduction of BlackBerry to the Indonesian marketplace has yielded fascinating results. Consumers are, he reports, routinely getting to the end of each month and deciding what operator to use for the next month. Because of BlackBerry, they are not wedded to their SIM card. Indeed, many simply discard their existing SIM card and go for the best pay-as-you-go deal available at the time.

Why? Because it’s not about the phone number as a means of identity. They all use BlackBerry Messenger instead. It’s super fast, super reliable and super cheap. And it’s operator independent. All you need is a data plan and you’re done. Those who use BBM don’t bother with SMS (why would you?) and rarely make phone calls.

What fascinates me about this concept is that the consumer has abstracted the operator from the mobile user model. The consumer now exists on the BlackBerry service layer and doesn’t need the usual fixed infrastructure that keeps them locked, at least in part, to a particular operator.  The phone number is the ultimate migration barrier — even in so called developed markets like the UK, migrating your phone number from one operator to another is still an absolute arse. But when that’s no longer a problem, it’s open season.

Phone numbers still serve as effective migration barriers for those in Indonesia without a BlackBerry — but Mike’s story highlights a rather interesting phenomenon. I think we’re going to see more and more of this kind of thing as the months and years progress.

My only issue is that I haven’t experienced this sort of thing first-hand. It was brilliant to get the tip from Mike, but I’d like to actually *go* to Indonesia and see what’s going on there. I’d like to talk to the operators in question, the distributors and some of the consumers. I wonder if this is a model that is also spreading to other similar emerging markets. Who knows? Well it’s time for me to stop sitting in Marlow and to get out to the world and see.

So thank you for the tip on this one Mike. All things being equal, I might see you and Rory in Bali for the BlackBerry DevCon Asia event in January!