Tuesday, January 18, 2011

Slowly but surely, mobile banking is entrenching itself

If the bets of banks and mobile operators pay off, before long you should be able to walk into an Airtel or a Vodafone store and open a bank account, deposit or withdraw money from your account.
Besides getting India villages, with its increasing disposable incomes thanks to rural employment guarantee schemes, into the banking fold, mobile banking will also free us from the hassle of carrying cash or cards to pay your driver’s salary or to pay the cabbie or for your grocery.
All that, however, may still be some time away. Not because technology is not available, as leading technology players in the field like mCheck’s president Suresh Anantpurkar will tell you. More because of the inertia related to embracing new modes of payment and security concerns.
“I pay my driver using mobile phone,” says Anantpurkar. “However, until there is a large scale implementation and the population covered by banks expand, it is difficult to say how much time it will take before mobile becomes the preferred mode of payment.”
For now, mobile banking is seeking to take banking beyond cities and towns into Indian villages.
“The current banking system needs to benefit from services like telecom, which is spread across the country with more than 1.5 million retail outlets, covering 85% of the country’s population, and hugely present in the villages,” said a spokesperson for Bharti Airtel, country’s largest mobile operator with over 130 million subscribers.
With only limited number of branches in rural India, banks are now looking to mobile operators for help. At over 60% penetration, mobile telephony has nearly double the reach of banking.
To make things easier, in September RBI allowed for-profit organisations to act as banking correspondents, on behalf of a bank. Earlier only non-profit organisations or individuals were allowed to do this.
Earlier this week, State Bank of India, country’s largest bank and Airtel announced the setting up of a joint venture entity. The `100 crore investment that will go into the effort stands testimony to the stakeholders’ seriousness.
Close on the heels of that announcement came another one about ICICI Bank, nation’s largest private sector bank joining hands with Vodafone Essar Ltd, country’s third largest cellular operator by subscribers, for offering banking services.
“Such large names getting associated with mobile banking will lend more credibility to the possibilities and hopefully acceptance over a period of time,” said Deepak Chandani, chief executive of Obopay Inc, a technology player in the mobile payment space.
What mobile operators like Airtel or Vodafone bring to the table is scale and a means for banks to leverage that scale in an affordable manner.
The mobile operators also stand to gain as trust-based services like banking brings with it a certain customer stickiness that is otherwise hard to get and can be a tool for differentiation in an overcrowded telecom market.
“This also brings in more stickiness with the customer, as this is yet another lifestyle enhancing service that gets added on to our portfolio,” the Airtel spokesperson says.
Regulatory hurdles are also slowly getting removed.
In November, National Payments Corporation of India (NPCI) had launched Interbank Mobile Payment Service (IMPS), which would allow for money transfer on a 24/7 basis. NCPI functions under the Reserve Bank of India.
NCPI’s mobile payment service comes with limits though, at least for now. The limits are Rs50,000 per day for end-to-end encrypted transactions using a high-end phone, or `1,000 per day for unencrypted SMS-based transactions using entry-level phones with limited features.
Currently, nine banks including State Bank of India, ICICI Bank, HDFC Bank, Axis Bank, Union Bank of India, Yes Bank, Bank of India, Corporation Bank and Kotak Mahindra Bank are participating in the service.
How it works? The participating banks assign a unique seven digit Mobile Money Identifier (MMID) number for linking the mobile number and bank accounts of customers who request for mobile banking services.
According to NCPI, currently 40 lakh customers across India have been given MMID. From technology perspective, this is all that is required for enabling money transfer between two bank accounts using a mobile phone. Applications of which include paying the cabbie or your kirana store owner, provided they have a bank account.
Currently, such services are provided free but starting April 1, 2011, NPCI plans to charge 25 paise per transaction. The remitting banks may also start charging from April 1, but the charges are likely to be very nominal.
But an Airtel spokesperson said that it is still too early to talk about the revenue model that may be adopted by the banks and mobile operators.
But the scale is the clue to how even nominal charges can be significant revenue streams for mobile operators and thus an incentive to participate in such mobile banking initiatives. SBI typically opens about 2 million no-frills account every year. With the scale that Airtel brings in, it hopes to push this number to 5 million in the future.
The different sources of revenue that a mobile operator could tap include charges for opening an account, transaction fee for withdrawing or depositing money as well as for paying bills/products/services.
“For mobile banking to become successful, it should be used by the lowest stratas of the society like fishermen etc then only it will be a game changer,” Jaideep Iyer, president, financial management, Yes Bank. “Right now it will be only used by people who are tech-savvy.”
“Mobile banking will become incremental and due to more number of mobile phone users over a period of time the penetration will deepen,” Suresh Sethi, group president - transaction banking, Yes Bank.
Sethi, however, admitted that right now the inter-bank transfers of funds are limited in number. And security is a major concern among users, another bank executive said.
“People will use mobile banking for making small payments. Mobile banking network is not very secure,” TR Chawla, general manager, information technology, Dena Bank.
"Internet banking is more secure and it has been tested.”source

Mobile VAS Summit 2011

Date: 26th - 27th April 2011
Venue: Novotel Singapore, Clarke Quay, Singapore
Organiser: IQPC
Delivering desired VAS offerings to maximise monetisation and customer loyalty in a rapidly evolving VAS paradigm.
Up to 60% of revenue growth will be driven by data services and VAS in 2011. With diminishing voice revenue and the entrance of non traditional competitors vying for your pie of your subscriber spending, what can you do to prevent yourself from becoming a dumb pipe?
Join your peers at the longest running and largest VAS Summit in Asia Pacific to find out how you can:
  • Move ahead with your subscriber usage trends: Integration of your VAS with the web
  • Evaluate the threats and opportunities of social media to VAS usage
  • Combat the loss of revenue to the Apple/Google/Android
  • Revolutionize location based services to double the revenue in this lucrative product
  • Tap into base of pyramid services to low end users to increase penetration in emerging markets
  • NEW! Intense discussions on enterprise applications e.g. mhealth, mpublishing to reach untapped revenues from enterprise services
  • Back by popular demand! Focus day sessions on mobile commerce and mobile advertising
  • More! First hand experiences insights shared by operators on how to effectively create subscriber awareness to increase the success rates of every of your VAS *20 operators case studies in 2011source

Airtel Digital TV announces a la carte pricing

Airtel Digital TV, the DTH service from Bharti Airtel, is offering all the 198 linear channels at an a la carte basis to meet the regulation prescribed by the Telecom Regulatory Authority of India (Trai).
The company has announced the pricing of all the channels available on its platform.

The cost of individual channels starts from Rs 3 onwards and in case the customer opts for the a la carte option, there would be a minimum charge of Rs 150 per month + service tax or actuals whichever is higher.
Bharti Airtel director and CEO, DTH services Ajai Puri said, “Content has always been central to our endeavours. The early introduction of our a la carte offerings enhances choice and convenience for our customers who can now either go in for either a la carte or choose from our wide range of monthly base packs or have a mix of additional packs on the base pack.”
Tata Sky has already introduced the a la carte option for its customers.

MNP can effect profitability of Telcos- ICRA

In ICRA’s opinion, with implementation of MNP, subscribers would get a wider choice and would be able to switch between service providers easily, thereby compelling service providers to offer competitive pricing plans and offer higher service quality to attract and retain subscribers.

Mobile Number Portability (MNP) was introduced in Haryana in December 2010 and thereafter will be introduced across India in January 2011, a move that is expected to further intensify competition in the already crowded mobile services market. In ICRA’s opinion, with implementation of MNP, subscribers would get a wider choice and would be able to switch between service providers easily, thereby compelling service providers to offer competitive pricing plans and offer higher service quality to attract and retain subscribers.

In ICRA’s view, direct fallout of implementation of MNP would be an increase in customer churn. Change in mobile number has been a major deterrent in switching service operators in the past, especially for high usage customers; however, with the implementation of MNP, customers would be able to easily switch from one service provider to another without changing their mobile number.

Moreover, ICRA expects, the low porting charges[1] (maximum of Rs. 19 per porting to be paid by the subscriber) and low porting time (7 days for all circles except Jammu & Kashmir, Assam and North East where the maximum time period for completing the porting process would be 15 days) to drive the adoption of MNP in India.

Increase in the churn is expected to increase the customer acquisition and retention costs of operators, which coupled with competitive tariff plans and falling average revenue per user (ARPUs) is expected to result in a decline in the operating margins of the telecom operators especially in the short term. Under such a scenario, telecom operators with stronger financial profile would be better placed to cope with the increasing competitive intensity.

In ICRA’s view, as all telecom operators in the market quickly react to match competitor pricing, tariff may not be a differentiating factor in the choice of operator. Hence, the quality of service and customer experience will play an important role in a customer’s choice for an operator rather than pricing. ICRA expects that customer retention, especially in the high paying post-paid segment, would become the focus area for operators, as these contribute significantly to revenues, even if they form a small portion of an operators overall subscriber base.

Operators would have to increasingly focus on offering differentiated services and improving quality of service (in terms of better customer care and improved network and coverage) in order to attract and retain customers. Offering differentiated services like third generation (3G) services would also be important for retention of high usage high ARPU customers.

The implementation of MNP would be beneficial for mobile subscribers, as it would provide them with a wider choice (in terms of pricing plans, services, etc.), flexibility to change service operators without losing their mobile number and most likely an improvement in the quality of services offered by operators.

However, for mobile service operators, the churn that invariably follows MNP implementation represents both a threat and an opportunity. Post the implementation of MNP, some carriers are likely to witness the erosion of their customer base and consequently a decline in profitability, however, for some other operators, MNP can provide an attractive opportunity to gain market share and target high ARPU customers.

Thus, MNP would result in higher competitive intensity that would be reflected in an increase in churn, pressure on ARPUs and margins in the short term and telecom operators would have to increase their focus on improving service quality and offering differentiated services in order to attract and retain subscribers in the long term. ICRA believes that, operators with superior quality of service would be the clear winners, while those with less than satisfactory service quality would stand to lose the maximum by way of subscriber churn. source

Wireless Generations

The telecommunication service in World had a great leap within a last few year.  About  6 billion people own a mobile phones so we are going to analyze the various generations of cellular systems as studied in the evolution of mobile communications from 1st generation to 5th generation. Now almost all the service providers as well as the customers seek for availing these 3G and 4G services. We can analyze that this could be due to increase in the telecoms customers day by day. In the present time, there are four generations in the mobile industry. These are respectively 1G the first generation, 2G the second generation, 3G the third generation, and then the 4G the fourth generation.
Wireless telephone started with what might be called as 0G. The great ancestor is the mobile telephone service that became available just after World War II. In those pre-cell days, we had a mobile operator to set up the calls and there were only a handful of channels available. In 1G, Narrow Band Analogue Wireless network is used, with this we can have the voice calls and can send text messages. These services are provided with circuit switching. Then in case of 2G Narrow Band Wireless Digital Network is used. It brings more clarity to the conversation. Wireless phone standards have a life of their own. You can tell, because they're spoken of reverently in terms of generations. There's great-granddad who's pioneering story pre-dates cellular, grandma and grandpa analog cellular, mom and dad digital cellular, 3G wireless just starting to make a place for itself in the world, with the new baby “4G” on the way, and “5G” is in thought process.
The big boom in mobile phone service really began with the introduction of analog cellular service called AMPS (Analog Mobile Phone Service) starting in 1981. This generation is 1G, the first for using cell technology that let users place their own calls and continue their conversations seamlessly as they moved from cell to cell. AMPS uses what is called FDM or frequency division multiplexing. Each phone call uses separate radio frequencies or channels. The next generation, quick on the heels of the first, is digital cellular. One standard uses a digital version of AMPS called D-AMPS using TDMA (Time division Multiple Access). A competing system also emerged using CDMA or Code Division Multiple Access.
Digital transmissions allow for more phone conversations in the same amount of spectrum. They also lay the groundwork for services beyond simple voice telephone calls. Data services such as Internet access, text messaging, sharing pictures and video are inherently digital. This is where the whole "G" thing got started. The original analog and digital cellular services were invented to cut the wire on landline phone service and give regular telephone service to move with.  As such, the bandwidth they offer for adding data services is pretty meager, in the low Kbps region. Now that a cell phone is not merely a cell phone, but also a PDA, a messaging system, a camera, an Internet browser, an email reader and soon to be a television set, true broadband data speeds are needed. That new generation of cell phone service has been dubbed 3G for 3rd generation.
Both the 1G and 2G deals with voice calls and has to utilize the maximum bandwidth. In 3G Wide Brand Wireless Network is used with which the clarity increases and gives the perfection as like that of a real conversation. The data are sent through the technology called Packet Switching. Voice calls are interpreted through Circuit Switching. 3G has proven to be a tough generation to launch. The demand for greater bandwidth right now has spawned intermediate generations called 2.5G and even 2.75G. One such standard is GPRS (General Packet Radio Services) which is an extension of the GSM digital cellular service popular in Europe. It offers download speeds up to 144 Kbps. 3G phones and services are just starting to come into their own. One service you'll find is called EVDO which stands for EVolution Data Only. EVDO has download speeds up to 2.4 Mbps, which is faster than T1, DSL or Cable broadband service. There is also an evolution that includes voice called EVDV which is in the works. While 3G is going to enable telephones to also become Internet computers, video phones and television receivers, its maturity phase will find it competing with wireless VoIP telephone services on WiFi, WiMAX, WiTV and the new wireless mobile standard 802.20, which doesn't seem to have a catchy name yet. The slug-fest between analog wireline phone service and wired VoIP seems likely to be continued on the wireless front.
There is also an emerging cellular standard we should be aware of called 4G. With the case of 4G in addition to that of the services of 3G some additional features such as Multi-Media Newspapers, also to watch T.V programs with the clarity as to that of an ordinary T.V. are available.  In addition, we can send Data much faster than that of the previous generations. The fourth generation being championed in Japan will boost the data rates to 20 Mbps. These speeds enable high quality video transmission and rapid download of large music files. The first 4G phones may soon and that means we better starting thinking about what to do with 5G if this generation thing is going to continue.source

TRAI braces up for 4G.....

Telecom Regulatory Authority of India (TRAI) has said that it will come out with a consultation paper on fourth generation mobile (4G) services by mid-2011.
4G aims to provide a wide range of data rates up to ultra-broadband (gigabit-speed) Internet access to mobile as well as stationary users. TRAI Chairman J S Sarma told reporters, "I expect 4G to come in India next year. TRAI will bring out a consultation paper on 4G in the middle of this year." source

Rel Comm draws USD 255 m for 3G

Rel Comm) has drawn down USD 255 million (Rs 1155 crore) by way of external commercial borrowing (ECB) to part refinance 3G Spectrum fee payment to the Department of Telecommunications (DoT).
This loan is funded by a consortium of banks led by Australian and New Zealand Banking Group Limited, BNP Paribas, Credit Agricole Corporate and Investment Bank, DBS Bank Limited and Intesa Sanpaolo.
Rel Comm will benefit from extension of maturity, and substantial savings in interest costs from this facility, says an official release.
Earlier in December, the company had signed a memorandum of understanding (MoU) with China Development Bank (CDB) to refinance USD 1.33 billion paid for 3G Spectrum to DOT. The MoU also covers financing of up to USD 600 million towards equipment and services to be procured fromChinese Vendors like ZTE Corporation and Huawei Technologies.
 “These facilities will be funded by CDB and other Chinese banks and financial institutions and their approval is expected soon,” the release adds.source

India could develop 3G standard in the same vein as China’s TD-SCDMA

India is apparently following in China’s footsteps in the field of network development, as its telecoms department has reportedly detailed swathes of 2G and 3G spectrum to be “exclusively used for developing indigenous telecommunications networks.”
A similar approach taken in China resulted in the development of China Mobile’s TD-SCDMA 3G technology, and India’s telecoms authorities are evidently hoping to recreate this success: the government has stated that the future economic impact of developing new tech will offset the short-term losses incurred by not selling the spectrum.
Ultimately, this strategy is aimed at increasing India’s independence; the development of indigenous network architecture will allow India to reduce not only its reliance on foreign vendors, but also its expenditure on imported telecoms equipment.
Whether India is aiming at directly emulating China’s approach – i.e. developing alternative 3G technology – or if it intends to adapt existing architecture is not yet apparent. Domestic development of new technology would certainly sit well with India’s government, which caused a stir among the international vendor community last year by calling for a crackdown on all imported network equipment.
However, taking an independent approach could stall the spread of 3G; China’s government in fact took action to prevent proven foreign 3G technologies from gaining ground in the country, with the result that 3G subscribers make up only around 5% of China’s total.
Wireless Intelligence figures indicate that China Mobile’s TD-SCDMA network is used by under 4% of its total 585 million subscribers, while China Unicom’s WCDMA network is used by 8% of its customers – somewhat underwhelming figures when compared to international markets.
Home-grown Indian 3G architecture could also face problems due to the greater competition in the Indian market; China Mobile’s significant subscriber numbers have allowed it to procure support for TD-SCDMA from foreign vendors.source

Mobile Banking for Rural India: SBI and Airtel Launch a JV, Vodafone and ICICI Team Up.

Last year, RBI (Reserve Bank of India) approved banks to appoint for-profit companies as BCs (Business Correspondents) and this has closed one of the most heated debates in the telecom space – Should Telco serve as a Bank (and vice versa).
State Bank of India, India’s largest commercial bank, and Bharti Airtel have entered into a joint Venture (JV) agreement to make available banking services to India’s unbanked millions.
The newly formed entity, will harness the power of state bank’s strengths and Airtel’s mobile telephony to add value to the banking and financial services sector and empower millions of financially excluded in the country to enhance their livelihood and quality of life. The Joint Venture will become the BC (i.e. Business Correspondent) of SBI and offer banking products and services at affordable cost to the citizens in unbanked and other areas.
The JV as Business Correspondent will engage Airtel’s retailers as Customer Service Points (CSP) all over India in a phased manner. With this, existing and new airtel mobile customers will be able to visit these outlets and open new SBI bank accounts and avail of other banking products and services available at the CSPs. Additionally, existing SBI customers will also get serviced at these outlets.

Vodafone and ICICI

Vodafone and ICICI have also teamed up (its not a JV) to offer mobile banking services in the country. Though the details aren’t yet out, this partnership is on the same lines as SBI/Airtel.
The biggest challenge in this business is to bring down one’s transaction cost and Airtel/SBI JV will *hopefully* bring the scale (plus network effect) that can potentially bring down the transaction cost in the long run.
Eko, a pioneer in this space recently raised funding and such JVs/partnerships between telecom operators and banks do validate their business proposition and help them grow the market.  The pressure is also on them to keep innovating and grow its network at a rapid pace.source
What’s your take on m-payment VAS services?

Infologic, Help Service sign MoU for bilingual mobile VAS push email 'Jaamun' for Yemen market

India's global IT and telecom solution provider Infologic Consultancy Services Pvt Ltd (ICSPL) today signed Memorandum of Understanding with Help Consultancy and Telecommunication Service to offer bilingual (Arabic & English) mobile VAS push email "Jaamun" to Yemen market developed by Infologic JV telecom technology partner Omnibytes Technologies.
Through the use of such kind of service, an ordinary phone works as a smart phone and allows the users to access their e-mails, compose, Forward, Reply and besides providing access to alerts from social networking websites (Facebook, Twitter) without the use of mobile internet connection/GPRS.

The goal of this MoU is to introduce mobile value added services (VAS) to Yemen market and Mena region as SMS is expected to contribute the bulk of messaging revenues in the Middle East up to $12.5bn in 2015 and mobile operators in Mena have an opportunity to drive massive growth in average revenue per user (ARPU) and traffic on their networks by offering VAS such as Push e-mail access to their customers as "SMS is the second-most-common mobile communications medium in the world, after voice. It continues to have a significant utility as a universal means of communications and connectivity and as an enabler for the delivery of content and services, for both the consumer and enterprise markets" said Mr. Khan, Director International Business, ICSPL Middle East.

Mr. Khan says that since we launched in Indian market we are greatly buoyed by a significant rise in the push email customer base across India and our expansion plan involves two simple elements: to ensure that our product is one of the best in the industry and to continue to liberate customers and be refreshingly different, by bringing in the best products and services into India and Mena market, and by innovating continuously.

Mr. Khan says that any VAS business can be extremely profitable for a mobile operator since there are no interconnection fees to eat into its revenues. In addition, operators benefit from gaining extra revenues without needing to make large investments in extra new hardware or support and sales staff. For launching the push email service as a VAS, we need to integrate with the mobile operator's SMS account. Subsequent to the integration, "Jaamun" would be responsible for activating and operating service for the end user.

Yemen is the one of the First Middle East country to effectively implement with the bilingual (Arabic & English) Mobile VAS Push Email "Jaamun" and added that under the MoU, ICSPL will provide the Value Added Services to all four local operators with approx. 10 million subscriber base through a local Alliance partner Help Consultancy and Telecommunication Service and the company is dedicated to produce quality products through the continuous technology enhancement and we are also negotiating quite intensely with a few other Mena regional operators to launch bilingual (Arabic & English) Mobile VAS Push Email "Jaamun" by the end of February 2011 Said Mr. Khan.

Mr. Atef, Director, Help Service, said, "It gives us great pleasure to announce the signing of MoU with Infologic Consultancy Services Pvt Ltd since it is aligned with our endeavor of bringing more and more services to common man through local operators." source

3G, MNP to define 2011 telecom story

It has been a momentous year for the telecom sector, with mobile subscribers hurtling towards the 800 million mark and gross revenues crossing $20 billion. Projections suggest that India will achieve 893 million wireless subscribers by 2012 & 1,243 million wireless subscribers by 2015.

This growth comes with economies of scale. India boasts of the lowest tariffs in the world leading to lowest ARPU's of $3/subscriber/month, combined with the highest minutes of usage. According to the Cellular Operators Association of India (COAI), every 10% increase in the mobile penetration rate leads to a 1.2% higher growth rate. A huge blip for the sector, however, was the can of worms, which popped out with the 2G scam being busted. It is said to have robbed the exchequer of Rs 1,76,000 crore by offering licences to telecom companies in 2008 at prices prevailing in 2001.

For subscribers, apart from the intense tariff war, Mobile Number Portability (MNP) and 3G were the most consumer-friendly introductions during the year. While MNP would enable a consumer to choose a service provider and thus put pressure on companies to deliver the best service, 3G would open up a new range of services, including data downloads at the shortest possible time.

The 3G/BWA auctions held this year helped the government raise $16 billion and boosted its fiscal situation. The spectrum has been allotted to the winners and services are expected to be launched shortly. MNP was first launched in the Haryana circle to begin with, with a pan-India launch scheduled by January 20. According to Rajan Mathews, director general, COAI, "The telecom sector has successfully withstood the challenges of global recession, an intense tariff war as a result of which tariffs fell to rock bottom levels, with some operators introducing paise per second rates as well as launch of service by new operators". However, Dunigan O'Keeffe, a Bain & Company partner in India, feels "2010 confirmed that India is now a highly-competitive and maturing market; the days of 30% plus revenue growth and 40%+ EBITDA margins are long gone and will not return."

According to O'Keeffe, overall, SIM growth has continued, but this no longer directly translates into revenue growth. "In metro areas, many have multiple SIMs. New subscribers are coming in rural areas where usage—and spending—is lower. Finally per minute pricing has dropped as challengers (Tata DoCoMo, Uninor) have competed for market share," he said. He adds that consolidation will be required to fundamentally change the profitability of the market and data revenue will become important and offset flattening voice growth.

Looking ahead into 2011, Mathews feels the launch of 3G services will not only lead to introduction of new VAS applications but also give a boost to initiatives such as e-education and telemedicine.

"With minimal fixed line broadband penetration in the country, 3G will be the quickest way for Indian consumers to experience Mobile Broadband and also help improve productivity in rural areas, catalyzing an overall improvement in the quality of life of the rural masses".

"While 3G will receive a lot of focus from operators in 2011, adoption is likely to be slow and the in-year financial impact minimal", cautions Keefe.

"By the end of 2011 we should have a good sense of who is winning and losing. We have seen in global markets that it takes a while for 3G to move from being a technology to an actual compelling customer proposition. Even the more recent rollout of 3G in China has seen only 4% adoption after two years of marketing and visible government support," he adds. Experts believe that in the first instance, 3G will be used by many operators to improve their overall network quality and retain voice customers.

One added challenge in India is the fractured mandate delivered by the 3G auction. Operators don't have national footprints. It is likely therefore that there could be partnerships across operators to knit together a national offering. "What we will see is a lot of innovation in terms of the offering, with mobile operators creating value-added data services – either in house or via partnership. This requires a new set of skills from the operator," Keefe predicts.

Mobile Number Portability (MNP) is not expected to cause a major disruption or significantly shift market shares. While established players have the most to lose given their large customer bases, they also have strong propositions and can benefit from lessons learned from global markets that have already transitioned to MNP. India has very high churn rates already. While MNP may have a one-time impact, it is likely that the winners will be those who are already winning the net acquisition battle.source

Airtel Bangladesh ties up with Comviva to enhance VAS growth

Seeking to increase low subscriber numbers, Airtel Bangladesh has tied up with Comviva to offer subscribers unique SMS facilities.
In a significant move to leverage VAS for the relatively low-penetration mobile market in Bangladesh, Airtel Bangladesh – a strategic arm of Bharti Airtel India, has tied up with Comviva to provide unique SMS facilities.
The messaging solutions that cover Unstructured Supplementary Service Data (USSD), Short Message Service Center (SMSC) and BMG (Bulk Messaging Gateway) portfolio will drastically reduce overall cost around Airtel Bangladesh's operator portal, and will also provide the operator with a single-window web-based environment to access, create, execute and manage services.
According to Chris Tobit, CEO & MD, Airtel Bangladesh, “With SMS traffic enjoying continued strong growth, we needed a proven solution to manage the increased load without making major investment. We selected Comviva's messaging solutions to efficiently route traffic over our existing network infrastructure and deliver an improved level of service to our customers.”
Aimed at increasing SMS usage by Airtel Bangladesh subscribers, the solution will optimally deliver messages with minimal latency during periods of intense continuous traffic. Rich SMS features such as SMS Upload, SMS Storage, SMS Forward, SMS Copy, Auto Reply, Email notification, SMS Signature and Web Portal, are also some of the unique offerings.
Says Manoranjan Mohapatra, CEO, Comviva, “Comviva is working with all the leading mobile operators in Bangladesh to provide them with end-to-end mobile solutions beyond VAS. We see our messaging solution supporting airtel as they extend their service to newer segments across the country.”
Bangladesh, which has a mobile penetration of just over 30%, is expected to reach a 100 mn subscriber mark by 2015.The country has ARPU's as low as $2-3 per month, and there has been a limited uptake on MVAS.
Talking about how such sms services could help in reversing these statistics, Parminder Kaur Saini, Program Manager, ICT Practice, Frost & Sullivan, South Asia & Middle East says, “Launching Value added SMS services in the region could help Airtel increase its subscriber share and generate higher revenues. While the complete bouquet of VAS services would be imperative with the launch of 3G expected early this year, this launch becomes essential and crucial.”
Bharti Airtel, which is the leading operator in India added over 3 mn mobile subscribers in October 2010, according to TRAI. MVAS has been one of the major drivers for its continued growth in this market as well.

The New Rage in Emerging Markets

Voice SMS, a worldwide hit with users, is a huge opportunity that can be tapped with better customization suited to Indian users
SMS has become a part and parcel of our daily communication. A phenomenon which started as just another form of communication and was an alternative to voice call, slowly crept into our lives. It has now become an integral part of the way we keep in touch with our social and professional network. Despite its massive usage, SMS is still 'puzzling' for a vast majority of users, who solely rely on voice as a communication medium. In India, almost 60% of the subscriber base has never sent an SMS.
As the technology evolved, voice SMS or 'an SMS with emotional touch' caught the imagination of the operators and subscribers alike in emerging markets across APAC, Middle East, and Africa. What are the reasons for popularity and the massive growth of voice SMS products in these markets? Why have similar services not seen an uptake in India despite the innovative marketing campaigns designed to attract subscribers to use voice SMS proactively?

Mobile penetration and awareness about the usage of sophisticated phones in emerging markets are low as compared to developed countries. Traditionally, the major chunk of the population resides in the suburban and rural areas, and relies on voice for communication. With limited written skills, they prefer not to type an SMS. The simplicity of a VAS service is the key to its success. Voice SMS is supposed to bridge these gaps, and plays an instrumental role in smooth and easy communication for this segment. Let us look at few of the success stories of voice SMS as a solution in some of the emerging markets. MTN Uganda, the leading African operator, saw a very impressive uptake of its voice SMS solution, and had to upgrade to triple the capacity of the voice SMS system within a few months of its launch. Within 3 months of its launch in November 2009, the service had seen an 11% penetration!
A Pyramid Research report rates voice SMS as the top next generation SMS based application that targets the low income subscribers in the Africa and Middle East region. Etisalat confirmed that out of its 7 mn subscribers in the UAE region, half a million voice SMSes were sent within 6 days of the launch of service. Analysts are of the opinion that the simplicity, cost-effective, and non-intrusive nature of the service will surely help in the uptake of the service with Nigerian operators like Visafone and Glo Mobile. Telenity has worked with operators in the Middle East and African region for making successful voice SMS deployments, and opened new VAS revenue streams.
Within the APAC region, 2008-09 saw various voice SMS deployments with operators across countries like Vietnam, Pakistan, Bangladesh, and Tajikistan. The success of the service in Africa and the socio-economic similarity in the regions clearly indicates that this service has a potential to be successful in these countries as well. Also, the operators have been promoting the service effectively by launching special campaigns like free voice SMS usage during festive seasons.

Why would a service like this be a 'good fit' for the Indian market? With English literacy levels low, a huge chunk of population struggles to communicate using SMS as a medium. SMS is complicated for this user segment. Handset manufacturers tried fixing the problem of English language by introducing SMSes in more languages than English, so that the users can send messages in Indian languages like Hindi and Tamil but that is a little complex. In addition, we also have a large chunk of literate users like senior citizens who are not very comfortable in using a mobile handset, and consider a voice call as the most convenient mode of communication.
Since the urban market for mobile phones in India is near saturation, the rural market will provide the next big wave of growth. Voice SMS, though was marketed by operators like Airtel and Vodafone as a product with a huge potential as it could address a need for subscribers in the suburban belts, has not seen the take rates that were expected.
One of the key reasons that voice SMS in India is still not so successful here because India is a price sensitive market. With call rates falling and the introduction of per second bill plans, subscribers would prefer making a call with the cost of a few paisa rather than spending money on SMS. Voice SMS is no different. As of now most of the operators have kept voice SMS at a price point of 75 paisa, and this need to become more competitive so that the operators can effectively exploit the full potential of the service.
The history of VAS application that have been a hit in a market like India shows that the Indian subscriber welcomes products and services that are simple to use and integrated in the call flow of making a regular call. CRBT-the killer VAS application in the last few years-is a case in point. This is the only service in India that has achieved a greater than 20% subscriber penetration across all the operators.
Going by this logic, the success of a high potential service like voice SMS also depends on the simplicity and ease of use from a subscriber perspective. The current voice SMS services being offered by the operators wherein the subscriber needs to dial * and a number and record the message, is still quite complex for the user segments that we are talking about. Telenity's solution, for instance, is based on an integrated technology where a subscriber is given the option to record a message in case a voice call is not completed (a person does not answer a call, is busy or out of coverage area). This integrates the service in a standard call flow of making a voice call and if priced competitively to a voice call as has been done by the operators in Africa, its penetration and usage will see a sharp rise. This also enables a much higher call completion by the operators and a big spike in their revenue.
Currently voice SMS as a service is not widely used in our country but the opportunity is huge. There is a massive suburban, rural subscriber base that uses only voice services. They use the phone only to make calls. This enables them to communicate and get their message across in all conditions. In a hyper competitive market like India with plummeting tariffs, the key question is not if this service will see mass adoption but by when will this happen.
The operators need to apply the learning from other emerging markets and price the service appropriately so that the non-VAS savvy subscriber segment can benefit from this service.
Telenity Voice SMS Solution
The above table showcases the revenue potential for operators through a voice SMS solution wherein a subscriber uses the service in case a call cannot be completed. It is an additional source of revenue for operators in case a voice call is not completed.source

The Future of Telecom

Mobile phones will be tools for wholesome entertainment as well as commerce in the near future India is a unique market with the largest number of operators in the world, 15, servicing 700 mn mobile phone connections with lowest mobile tariffs globally. With the upcoming 3G services, value added services (VAS) are expected to drive conspicuous consumption. Service providers are relying heavily on VAS such as high speed data applications and mobile entertainment options including 'TV everywhere'.
In the recent years, the Indian telecom industry has witnessed phenomenal growth. The last year, in fact, has been one of the most exciting years for the industry with the 3G auctions and MNP being launched. A conducive business environment, favorable policies, and political stability have spurred the growth of this sector (notwithstanding the telecom ministry woes). The number of people using mobile handsets currently to access the web is 5-10 times more than those using a PC. As the telecom revenues continue to grow aggressively, telecom service providers are now beginning to make all endeavors to enhance their profitability amid dropping ARPUs, low tarrifs and cut-throat competition.
The introduction of 3G and WiMax technologies along with Mobile Number Portability (MNP) will be game changers in the Indian market. As per Trai estimates, India will have 19 mn WiMax subscribers by 2012 and nearly half of current mobile users as 3G subscribers. In the near future, we will see powerful devices backed by huge databases of applications helping consumers (individuals/businesses or both) benefit from mobile broadband that will offer mobile computing experiences beyond imagination.
With the launch of 3G services by the private operators, post the successful conclusion of 3G auctions by the government, incumbent operators are spending huge sums of money to get their networks 3G ready. There are going to be exciting times ahead, though it remains to be seen how 3G will impact both enterprises and retail customers when all the service providers initiate 3G services next year. However, one cannot ignore the power of mass entertainment medium that a mobile is soon going to become.
In the 3G age, the services will be provided under 4 core areas of access, video, applications, and gaming. Mobile phones will become a one-stop-shop for your daily needs. It will be used as a gateway to Internet access, passkey for high security commercial transactions, and an entertainment and information keeper. M-commerce, m-banking, m-trading, m-wallet, location based offers and mobile TV, have become the most talked about trends in the industry today. For enterprises, big or small, smarter devices combined with third generation wireless networks and an increased demand for workforce mobility will make business applications more attractive and popular.
The last few months have seen the market for tablet devices warm up with several vendors launching smarter products to garner market share and mindshare. The market has seen traction since the launch of Apple's revolutionary iPad device. The much sleeker tablet allows surfing the net, sharing documents, reading e-books, exchanging emails and nearly all multimedia functions such as listening to music, watching videos, and making calls. In the future, 1 device (essentially mobile phone and/or tablet) will be taking care of all the daily chores. It will act as a credit card for the daily purchases, cash for online bill payment, and a bank for the banking needs.

With the newer and faster technologies coming on the horizon, the access technologies such as screen size becoming smaller, advanced and more efficient, gone are the days when a large sized screen was needed to access the Internet and download favorite entertainment content. Now customers have a plethora of options to choose from that is, mobile phones, tablet PCs, and netbooks, etc, for accessing the worldwide web and their favorite content (mobile entertainment content such as audio, video, etc).
Mobile entertainment services have come a long way with the operators today delivering huge gamut of services such as streaming audio and video, interesting multi-player games, and the hugely popular mobile gambling across high speed 2.5G networks on advanced handsets. According to a Portio Research report estimates, mobile entertainment services (including mobile music, mobile games, and mobile video services) would generate worldwide revenues of $47.2 bn by end of 2013.
Gartner predicts that more than 4.5 bn apps will be downloaded in 2010 across all platforms, generating $6.8 bn of sales. It estimates that this will increase to 21.6 bn downloads and $29.5 bn of revenues by 2013. However, another interesting trend would be that a quarter of these mobile app revenues will come from advertising in free apps, rather than paid downloads.
Leading Indian operators have launched their own version of app stores in the still nascent app market, just like the global telecom majors such as Nokia and Apple. This enables them to gain a small yet significant share of consumer's wallet. However, in India where the propensity to buy depends on the value addition that the app brings, future will see apps being sold as part of bundled package with handsets, and cost recovered by running ads within it. The mobile ad market in India is already estimated at $25 mn and predicted to be in vicinity of $100 mn in the next 2 years.
Now the next question arises that what kind of app will be most popular in the future? The emergence of mobile TV and mobile commerce applications would be seen as the single most important event in the future of telecom industry.
The broadcast industry is undergoing one of biggest transformations in its history. Over the next few years or may be less, the entire television industry will make the transition from analog broadcast to digital services. This will be a major leap ahead for the entire broadcast industry. Slowly and steadily consumers have started streaming shows, news and movies from the web not just to their television sets and laptops, but also to their smartphones and iPads.
Mobile TV will change the paradigms of mobile entertainment. Television will no longer be limited to households, and each individual will carry his own personal entertainment in his pocket. The day is not far when the mobile TV will become ubiquitous and revenues will be earned through personalized ads, thanks to the personal data (even likes, preferences, and needs) of the consumers available with the service provider. In the next couple of years, India will have more than 200 mn mobile TV users primarily because of anywhere, anytime entertainment capability.

The recently announced tablets with phone capabilities and 5 inch and 4.8 inch screen sizes by Dell and Acer, respectively suddenly mark the reappearance of a large enough personal screen to enjoy TV and video content. Given the propensity of Indian innovators to bring down price points on mobile phone advances, the widespread availability of such devices will be possible really soon.
Bandwidth is the other scarce resource in a mobile environment. With the new 3G networks coming up, this problem will be more or less solved. The only question is how soon the operators will deploy the additional spectrum for data services.
Mobile commerce or m-commerce-the conduct of business transactions over the Internet enabled wireless devices-is the other huge trend slowly becoming a dominant force in the business and society. M-commerce is one of the fastest growing mobile applications in recent history. M-commerce has become such a popular concept that a number of sub applications have been developed around the concept such as m-banking, m-trading, m-wallet among many. The enabling feature such as anytime, anywhere banking/payment flexibility, and ease of use have made it one of the most downloaded apps across the world.

Like every enabling technology, m-commerce is also not without issues. Information sharing especially in today's cybercriminal world is fraught with risks. Identity thefts are as common as mobiles today. Personal information such as credit card information location, personal details, and location details can easily be misused. Many countries strictly regulate the collection and use of personal data by business entities and government departments.
There is no doubt that m-commerce is the future of banking and all m-commerce applications have a very promising future. However, there are several limitations an m-commerce user faces. Small screens on wireless devices, limited processing power, modest memory, low speed data transmission, non-ubiquitous coverage, unproven security, and scarce bandwidth are some of them. We know by experience that many of these limitations are expected to diminish, if not being eliminated, over time.
With the upcoming 3G networks bestowed with higher security, higher speeds, higher capacity, and intelligent infrastructures, m-commerce applications will be unqualified success. With improved wireless security and privacy through data encryption and user education, m-commerce will become the most dominant method of doing business transactions.
The future of telecom will be to enable the applications and technologies developed by Independent Software Vendors (ISVs) or Telecom Service Providers (TSPs) to vastly improve our standard of living. Telecom will become the springboard to the future creation and expansion for an information society. Telecom will play a huge role in the society and will spur innovation, entrepreneurship, and growth.source