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Emerging Internet, playing the online growth of emerging markets

|Includes: Tencent Holding Ltd. ADR (TCEHY), TLK

We have been talking about how crucial data services are to emerging markets cell networks, but media companies and fixed line telecom players are also in the game.

Recent numbers reveal that the BRIC countries plus Indonesia collectively have about 600 million of their people online -- roughly twice the population of the United States and Japan put together -- and ramping up to double over the next five years. It is true that a lot of these people primarily access the Internet via their cell phones, but keep in mind that there are still a staggering 450 million personal computers in those five countries as well. These computers are not going away.

If anything, the technology gurus at the Boston Consulting Group expect to see all the smartphones lead people to buy more computers in order to get a richer, faster Web experience. Computers are most prevalent in Brazil and Russia, where about 1 in 3 people own one.

Still, the fact that 20% of Chinese own computers -- and not just cell phones -- will impress many investors with not only the size of the current opportunity (comparable to the United States) but the amount of growth left in the market. Numbers like that make China broadband plays like Tencent (TCEHY) very interesting in the long term.

Indonesia leads all four members of the BRIC group in terms of Internet use thanks to local people's love of wireless data. PT Telecommunications (TLK) is the big name to trade here.

Despite India's reputation as a technological center, Internet penetration there is relatively low at 7% of the population, who "only" use the Web an average of a half hour a day. India is still largely virgin territory for investors and data vendors alike.


Disclosure: no positions