The after-shocks of the 4% contraction* in the global telecoms industry last year continue, producing ripples of consolidation led by the most ambitious BRIC (Brazil, Russia, India and China) mobile operators. As they get bigger, these operators are exerting greater influence on the development of the worldwide mobile market. But it is not yet clear to what extent a new telecoms world order will benefit or hinder the mobile ambitions of Google, Apple, Facebook, Skype and other major Internet players.

VimpelCom, Russia’s second largest mobile operator, is the latest BRIC operator to be expanding its horizons. VimpelCom is on the cusp of acquiring most of the assets of Orascom Telecom, and its affiliate Weather Investments, potentially taking the Russian operator into Algeria, Italy, Pakistan, Bangladesh and other new markets, according to the Financial Times. If that deal goes through, it will increase the pressure on other emerging market mobile operators, including VimpelCom’s Russian rivals, MTS and MegaFon, to go on the acquisition trail.

Bharti Airtel, India’s largest mobile operator, laid down the gauntlet earlier this year by buying Zain’s 17 operators in Sub-Saharan Africa. Already generating significant scale in their domestic market, China’s big three also appear to be looking for opportunities to buy abroad. Two of the largest players in Brazil belong to America Movil of Mexico City and Telefonica of Madrid, which already have sizeable international empires that bridge the developing and developed worlds.

To be sure, most of the BRIC operators are still much smaller than their European, American and Japanese counterparts on key financial metrics. In terms of revenue, China Mobile and America Movil are the only predominantly emerging market mobile operators in the global top 10, according to the latest ranking by Wireless Intelligence.

Exploiting an expansionist remit

But, unlike many of their European, American and Japanese peers, they are still growing organically and that means they can still attract growth-orientated, rather than dividend-orientated, investors who are more inclined to sanction expansionist business strategies. Another advantage they have is that the Internet giants, for the most part, are nowhere near as strong in the BRIC countries, as they are in Europe and North America. That gives these mobile operators a valuable window of opportunity to influence the development of the global Internet.

The strategic dilemma the BRIC operators face is whether to attempt to provide a broad portfolio of Internet-based services in competition with Google and Apple, or whether to focus on just defending their core communications services against Skype and other VOIP specialists. This is a tough call. Developing and selling a broad suite of Internet services is a major cultural, technical and marketing challenge for any telecoms company. That challenge is even greater if much of the organisation is focused on M&A, integration and subscriber growth.

But, without a broad suite of Internet services, they run the risk that their customers will soon make Facebook or Orkut (Google’s social network) their home page (or preferred app) and use these services for all their communications.

Much as they might like to park this strategic dilemma while they focus on international expansion, time is of the essence. Orkut is the leading social network in Brazil, while Facebook is now number one in India, according to comScore. At least one of the BRIC operators is going on the offensive – China Mobile is building a broad suite of Internet services fit to rival that of NTT DOCOMO, one of the few mobile operators anywhere in the world that can claim to be a major Internet services player in their home market.

Both China Mobile and NTT DOCOMO have shown how to use strong domestic brands, together with an in-depth cultural and linguistic understanding of their home markets, to produce competitive online services. While the BRIC operators lack these assets outside their home markets, the Internet giants have the same headache. In Africa, developing Asia and much of Latin America, the Internet is still wide open.

*Source: Infonetics Research