Since Russia’s brutal invasion of Ukraine in February, companies with a history of operating in complex and challenging markets have been weighing the difficult realities of their responsibilities to the people they serve. Those that supply essential goods and services, such as internet connectivity, pharmaceuticals, food and consumer products have confronted difficult choices. The war has highlighted which companies must choose between providing essential services and managing the reputational and regulatory risks of operating as usual in Russia.
The risks that telecom companies operate in are evident. This month, telecommunications company VEON — the owner of Ukraine’s largest mobile company, Kyivstar, and Russia’s third-largest mobile company, Beeline — announced it would start selling its operations in Russia. This is a significant announcement because Beeline is a company providing essential internet connectivity service to the Russian population and because it represents a noticeable turning point.
Telecom companies are beginning to make these tough decisions regarding where to diversify beyond Russia and expand into new emerging markets. Their attention reflects an increasing focus on other countries, such as those in Central and Southern Asia. This is reflected as the European Union pivots toward closer strategic ties with Central Asian countries. EU High Representative for Foreign Policy Josep Borrell noted recently that the EU would seek to increase ties with these countries, stating that “they are asking Russia to respect their independence and we’ll have to increase our relationship with them.”
Looking beyond Russia, there are promising opportunities in other markets for growth. For example, in the telecommunications sector, people living in emerging markets are seeing the transformative effect of improved access to connectivity and key digital services. This is particularly so for those living outside cities. In the Commonwealth of Independent States region, according to the International Telecommunication Union, 4G coverage is 100 percent in urban areas but only 73 percent in rural areas. These underserved Central Asian regions understandably are key areas for investment in internet connectivity.
Central Asia is a strategically important place to counteract China’s influence by connecting the region’s countries and people within them to the West. Western countries can and should get ahead in the race to capitalize on the digital vacuum in the region to form a prosperous digital future together before China’s footprint expands.
Basic services that we often take for granted in North America and the EU can have a life-changing effect on those who do not yet benefit from them. Internet connectivity also will foster growth in these economies. For example, individuals and small and medium-size companies will have critical easy access to mobile banking, online education and public services.
Without this connectivity, people miss out on access to education, jobs and social activities, while micro, small and medium businesses lose their competitive edge. In this context, the president and CEO of Ericsson, Börje Ekholm, who co-chairs the B20 Digitalization Taskforce, underscored that the task force’s focus at the recently concluded conclave of G20 leaders at the Bali Summit was focused on universal connectivity, digital skills and the digitalization of businesses of all sizes.
Telecom companies such as VEON, MTN and the M1 Group operate in areas where they face political challenges. They also are confronted with natural disasters and economic and social instability. The United States and its allies should do more to support telecom companies that are courageous enough to operate in difficult geographic markets and help open these societies to the world. This would help promote internet access, which the United Nations deems to be a human right, while also advancing the strategic national interests of the United States.
The opportunities for growth and economic development are clear, and telecom companies and governments are beginning to seize them. With an unwavering commitment from the public and private sectors to connect West and East, the people in these underserved, emerging markets are poised to be the biggest winners in the long run.