Despite its apparent demolition by the likes of the Apple iPhone and the Samsung Galaxy series, and a series of less than sparking annual reports, Nokia is still the phone of choice in the United Arab Emirates – one of the markets normally associate with a high mobile broadband penetration – particularly as incumbent Etisalat was claiming 80 percent population coverage for its 4G LTE network as long ago as 2011.
This week’s issue of ‘Africa & Middle East Telecom-Week’ reported that the Telecommunications Regulatory Authority (TRA) has just completed a review of mobile phone handsets by manufacturer, model and operating system. And amazingly half of the handsets registered were manufactured by Nokia. This is followed by Blackberry (10.7 percent), Samsung (10.7 percent), Apple (8.4 percent) and Sony Ericsson (1.5 percent).
The report also shows that the most commonly used mobile handset models are the Nokia 1280 with a 3.08 percent market share, followed by the iPhone 4S (2.93 percent), Nokia X1-01 (2.9 percent), Nokia E5 (2.61 percent), iPhone 4 (2.58 percent) and the Samsung SIII (2.11 percent).
In terms of smartphones, iPhone 4S is the most popular smartphone, followed by iPhone 4, Samsung SIII, iPhone 5, Blackberry Bold 9900 and Blackberry Bold 9780.
The study also showed that the most commonly used mobile handset operating system is currently Symbian with 50 percent market share, followed by iOS (13.8 percent), Blackberry (10.7 percent) and Android (10.4 percent).
As a Nokia user myself, I am for once apparently in step with the majority. Although the UK regulator puts smartphone penetration at around 58 percent.
This has a relevance to this blog, as despite Ofcom’s best efforts to police the UK mobile phone sector, users are still subject to delayed text messages and the odd unintelligible voice call, and dare one say it, despite being on an island with five mobile operators, there’s a surprising number of urban locations still without mobile broadband.
It’s time that TelecomsMarketResearch carried out its own Quality of Service audit, and we’re now on a mission to acquire a set of mobile phones and SIM cards – enough to be able to do on- and off-network simultaneous test calls and texts for all 5 operators – and then over the coming weeks and months share some of the observations and data generated.
Given that many African and Middle East regulators have set up rigorous SIM-card registration programs – barring unregistered cards from the networks – it comes as no surprise to discover that one can buy off eBay a fully functioning, unlocked Nokia 6300 complete with active SIM-card for, err, just GBP 1.85 plus postage.
We’ll keep you posted as the TelecomsMarketResearch UK QoS audit progresses.
Telecom.Paper this morning has reported estimated retail revenues in the United Kingdom as generated by mobile telephony increased by 0.8 percent in 2012 to GBP 15.2 billion, though the 4Q 2012 figure declined 0.3 percent compared with 4Q 2011.
The two major areas of growth were ‘Access and bundled services’ and ‘Data services’: these increased by 5.8 percent and 16.8 percent respectively in 2012 in terms of full-year figures. From 3Q 2012 to 3Q 2012, the number of active mobile subscribers increased 0.7 percent to a record 82.67 million. The number of active mobile broadband subscribers decreased 1.8 percent from 3Q 2012 to 3Q 2012 to reach 4.92 million.
So a market worth following then, and one I’ll be looking at some of the consumer experiences in over the next few months. Like: how good is customer care? what happens to unused credit on pre-paid accounts that have timed out? how good is the network peering in the UK – if you send a text, when might you expect it to arrive? Why can you buy a shed load of SIM cards; but in many Middle Eastern and African nations now, you have to provide photo ID?
Some of these issues may seem small-scale in the grander scheme of things, but I have a marketing background and think there are some majors ‘own goals’ being scored by the likes of Vodafone, O2, T-Mobile, Orange and 3.
I’ll start this thread an anecdotal story.
The phone rang at home the other night. ‘Hello’ said the breezy, bouncy, highly charged salesman from Hutchison 3: ‘We’d like to reward your long term loyalty, as you’ve been a customer of 3 for over five years now and we’d like to reward your loyalty with some very special offers that we are running when you sign up for two or more years.”
“That’s very kind of you” I said, “Err, this wouldn’t be by any chance anything to do with T-Mobile and Orange pooling their spectrum and towers and offering 4G nationally in the very near future, or the fact that if you check out the GSMA coverage maps for the UK, they will already had better coverage than 3 in a lot of small towns, and now with the increased tower fleet, will be about to knock you into a cocked hat” (We still speak like that in Britain).
My new friend put the phone down.
I draw a number of conclusions from this. The EE4G offering appears to be unassailable, and I was genuinely surprised that there was no attempt to tell me about superior tariffs or potential TV interference.
Perhaps more tellingly, no attempt to thank me for being a loyal customer and the hope that I would stay with them regardless of 4G now knocking on the door.
It’s this stunning lack of decent customer service at the sharp end that worries me most about the mobile phone revolution, and this is a theme I will be returning to as this series develops.
Kenya’s telecommunications and broadband market is undergoing a revolution following the arrival of three fibre optic international submarine cables (Seacom, TEAMS and EASSy), ending its dependency on limited and expensive satellite bandwidth. The country’s international bandwidth increased more than eleven-fold in 2011. Prices had already fallen significantly following the liberalisation of international gateway and national backbone network provision in 2005, but they have now fallen by more than 90%, enabling cheaper tariffs for telephone calls and broadband Internet services. However, ISPs have only reluctantly passed on the cost savings to end-customers, which has prompted the industry regulator, the Communications Commission of Kenya (CCK) to consider price caps. In parallel, the regulator has mandated price cuts on interconnection tariffs and proposed new competition regulations.
Companies that started out as ISPs – such as AccessKenya, Kenya Data Networks (KDN) and Wananchi – are transforming themselves into second-tier telecom companies by…
The obvious notes about remote locations, difficult transport routes and unreliable electricity are just the tip of the iceberg. MNOs in many parts of Africa face other problems.
Broadly speaking, the problems that operators face in Africa are well documented: large distances to be covered, unreliable road and rail transport, low per-capita policing ratios, occasionally extreme weather conditions and socio-economic factors that drive high crime rates.
Whereas this looks like a toxic cocktail for high-tech operations, it can be – and has been – dealt with in very practical ways by all MNOs across the region. Beyond that, however, it raises a question regarding what was previously called “appropriate technology” for Africa and the answer to that question might well be a signpost for the future.
Setting up a network of towers in remote areas of Africa is more daunting than in developed countries. Maintaining those towers then proves an even greater challenge. Even in urban areas, there are issues that are proportionally heavier overhead than elsewhere in the world: electricity, fuel, weather damage and theft.
On a simple business level, this means the costings and risk analysis for projects in Africa are more carefully considered. Startup costs remain higher, despite possibly lower costs for labour and basic materials.
Maintenance costs are the devil in the detail. MTN, the South African operator that holds significant slices of the market in many countries on the continent – 21 in all, including Middle East operations – reports that a generator is stolen every day, on average. That does not even include other damage such as cable theft or weather events. Nor does this cover the high costs of diesel fuel supplies and the negative environmental impact.
While the inflated maintenance costs can be dealt with on paper by adjusting the ratio of capex to opex, the fact remains that increased costs anywhere in the books run counter to providing low-cost, mass-market GSM access for Africa’s huge and often widely distributed population.
This has driven innovative approaches that are in the nice-to-have category in other parts of the world but practically a priority in Africa.
Taking MTN as one example, that company has been running pilot projects to power base stations in remote parts of South Africa using both solar and wind power. Building on that experience, MTN Cameroon has a project running to equip its towers with solar panels provided by ZTE. Typical of Chinese leadership in green technologies and a cautious approach, these installations are mounted with “theft-proof” screws on frames that are 3.5 metres high. It’s not just generators that get stolen. There is a market somewhere for practically anything.
Cynics will note that even such provisions might not be enough. But the present reports indicate that there have not been any problems thus far and MTN’s operating expenses are reduced.
By comparison, Airtel has also been active in exploring solar power, being currently engaged in a project to provide over 20,000 towers in India with panels. There is a reasonable expectation that this will be expanded to Airtel’s operations in other locations as it proves its value.
The advantages are not quite as prosaic as they might seem. There are few studies yet available for the solar initiatives in Africa but we can look at figures from India as a guideline. Greenpeace India reports that some 60 percent of power used by GSM towers in that country is actually provided by diesel generators. That is, as with Africa, thanks to remote locations and unreliable grid supply. Greenpeace claims a potential cost saving of 300 percent for operators over a 10-year time frame if they convert to solar.
Even without that saving being a proven figure, what we do know is that Indian MNOs are using something like three billion litres of diesel a year, producing some five million tons of carbon dioxide. And, of course, that is a huge fuel bill compared to grid power and “free” solar power, quite apart from the environmental impact.
While wind power might be an option in some specific locations, the advantage to solar is that Africa is generally well supplied with enough sunshine to avoid the power interruptions experienced with such installations in countries outside the tropics. The same applies to other less consistent renewables, such as wave or hydro-electric power sources. Solar still works better.
Looking ahead, it seems inevitable that MNOs across Africa will turn to solar. This is driven not just by green concerns and the need for being responsible corporate citizens but also by significant savings in running costs, including reduced risk of equipment theft.
A further predication that seems high-probability is that it will often be companies from Shenzen providing the necessary technology. China’s forward-looking approach on all things green and its own interests in Africa’s resources and developing markets practically guarantee that.
There is another aspect to operations in Africa worth noting. The same challenges that face operators also affect their customers. Obviously, if customers face problems with electricity, that is not good for business.
This issue is not yet being addressed with the same urgency as is seen with power supplies for base stations but there are signs that point to increased interest in this area.
There have been pilot projects across Africa for many years to provide rural communities with domestic solar power and ICT equipment and radios that work from manually wound generators. These have mainly been the province of charities and NGOs.
More recently, Nokia has gone ahead with its bicycle power charger. That product has been a success in developed countries where it has been adopted for reasons of convenience and green awareness. In Africa, it is even more useful, as so many people use bicycles but do not have access to grid power. It has been welcomed in the Great Lakes countries already, where it sells for more affordable prices than in the EU. Even for the lowest-income communities, the advantages are compelling. It provides power for handsets on the spot, eliminating the need to travel to find electricity.
Finally, while it would be no surprise that companies from India, China and South Africa are leading the charge, it is Africa that might well be the proof of concept for much wider adoption of renewable energy for mobile services at both a corporate and consumer level.
This article has been contributed by Roy Johnson, a writer specialising in IT and business topics, who has regularly contributed to PC Magazine, as well as editing TechNet Magazine for Microsoft. Roy was formerly editor of CommsAfrica and contributing editor for Intelligence magazine.
Competition in African markets is fierce. It really is a war zone. And, as with any conflict, the outcome hinges on decisions regarding strategy – and the available weaponry.
Bharti Airtel has a history of making first moves and emerging as the winner just because of that. This is what built the company’s success in India, where it remains the top MNO and second-largest fixed-line operator. In fact, thanks to the massive market it serves at home, at the time it acquired the Zain portfolio in March 2010 Airtel was reckoned to be the fifth largest mobile operator in the world on a proportional subscriber basis, putting it behind the likes of China Mobile, Vodafone Group, American Movil and Telefonica, but ahead of China Unicom.
As has been widely covered for over a year now, Airtel has been looking at Africa as a new growth market. While it has a deal with Vodafone for the Channel Islands, Africa is the only other territory outside the Indian subcontinent (including Bangladesh and Sri Lanka) that the company has entered.
The commonalities are compelling: similar markets, needs and infrastructure. The realities on the ground are somewhat more challenging: logistics, legislative compliance and serious local competition being foremost.
The logistics of infrastructure in Africa are an equal challenge for all MNOs. That is a given. Where Airtel might have been overly optimistic is in hoping its Africa model would run similarly to its success in India, based on a first-to-market approach and having some leverage to overcome legislative obstacles. Unfortunately, while Airtel has a 30-year history of being first in India (with pushbutton phones, cordless phones and then mobile), they were not first in Africa. There were major EU, Middle East and South African players there ahead of them.
In fact, Airtel’s African expansion is largely thanks to its takeover of Kuwait’s Zain mobile operations in 15 countries. This was a beachhead, not a conquest. Zain only held dominant market share in a few countries.
Going up against market leaders such as MTN of South Africa, Airtel applied a strategy of extensive cost cutting. This followed on what it achieved in India, cutting a deal with Ericsson for per-minute fees (rather than upfront payment) that enabled very low-cost call rates from the outset. Airtel has an all-Africa, five-year deal in place with Ericsson for network management that offers similar advantages. Elsewhere, Airtel is engaged with Nokia Siemens Networks and Huawei, not keeping all its eggs in one basket, of course.
As a Plan B, possibly following on the indecisive outcome of Airtel’s low-cost invasion, the company has previously been negotiating a takeover of or (maybe) a joint venture with MTN itself. How this putative deal is described depends on which company is talking. This has been going on for some four years without a definitive ending. Even if it never happens, it is a signpost of just what Airtel would consider to get its Africa operations truly established.
But let’s look at realities.
Taking Nigeria as a bellwether example, Airtel’s charges are low, around 20 kobo (about GBP 0.08) per minute, but three times that for the first minute. That is up against MTN charges of 50 kobo, although MTN offers a cheaper peak rate (15 kobo) and more expensive off-peak rate.
As always, comparisons are tricky, given the different pricing regimes on offer.
Also difficult is working out which company is really winning. Airtel claims either number-one or number-two positions in many of its Africa operations (11 out of 17 countries). Tellingly, no claims are made for Nigeria. Airtel is not just being coy. There is an ongoing dispute over branding in that country and the latest development is that Airtel has been court ordered to rebrand as Econet (EWN). Airtel will appeal that ruling, while complying in the interim. This dispute goes back as far as 2003 and is not yet over. It is, however, a good example of the challenges Airtel faces in African settings and, while it continues, the real winner is MTN, holding on to its own leading position in Nigeria as well as its brand.
To come back to what we said at the start of this article, winning wars is not just a matter of having the best weaponry, although that helps. Without a strategy, chaotic retreat is the order of the day.
Airtel’s strategy bears comparison with the different approaches of two European operators who have been busy in Africa, Vodafone and Orange. Vodafone’s approach has been targeted, achieving a small number of high-value operations. Orange went large, seizing opportunities wherever they appeared. The final result is that Vodafone has good revenue and lower costs, whereas Orange has higher costs and less revenue.
What Airtel needs to prove is that its broad approach with low fee rates can win against competitors who have a head start and better targeting. Current usage, market share and consumer approval figures – where independently available – do not support a claim that Airtel is winning, despite the impressive growth that was claimed after the launch in 2010.
This is, to a large extent, an inevitable result of the original acquisition by Airtel of Zain’s operations. Among the 15 countries involved, not every one was clearly a winning proposition.
Nevertheless, do not underestimate Bharti Airtel. The company has deep resources, including enough to offer anything between USD 13 and USD 45 billion (as reported) to buy out its main competitor, MTN. It is also licensed to roll out 3G in 12 countries, clearly focused on the expected maturity of African markets finally proceeding to data services instead of the fundamental voice and text services that fuelled the original mobile boom on the continent.
On a side issue that might well have bottom-line impact in the medium term, Airtel is pushing ahead with its Green Towers programme to upgrade 22,000 of its sites in India to solar power over three years. The company won the MWC Green Mobile Award for that in 2011. Apart from the marketing boost, there are practical and financial advantages to such technology, especially in Africa. Other MNOs are also exploring this option but Airtel is not just experimenting. It has about 6,000 towers already running solar.
While Nigeria is obviously the jewel in the crown, Airtel will continue to be an influence in other countries, driving down rates and forcing technology upgrades.
This has advantages for consumers but is a problem for operators as growth in Africa’s markets has currently reached a plateau. Big as Africa is, there might not be enough room for all the players who are there at present.
This article has been contributed by Roy Johnson, a writer specialising in IT and business topics, who has regularly contributed to PC Magazine, as well as editing TechNet Magazine for Microsoft. Roy was formerly editor of CommsAfrica and contributing editor for Intelligence magazine.
While the expansion of mobile markets in many countries across Africa is an undeniable opportunity, both private and public sectors are still looking for the magic formula to make it work for the benefit of all parties.
Ghana is a case in point. Although Glo Mobile (Globacom of Nigeria) is stating that its network is ready and has a number reservation campaign started since late January, this is not what was promised last year. So why is the reality not quite meeting expectations?
As has been seen elsewhere on the continent, progressive privatisation is not a simple process, especially when the present market has been effectively saturated with major incumbents. This was – and still is – an issue for Cell C in South Africa, going up against Vodacom and MTN. In Ghana, the major players are multiple, including MTN (Scancom), Millicom, Airtel and Vodafone.
Although Globacom seems like a good fit for the market in Ghana, being also Anglophone and from near-neighbour Nigeria, the launch of its services is not happening at quite the pace expected.
This is not because it lacks infrastructure. The company claims an investment of some USD 750 million in 1,600 base stations; has landed the Glo 1 cable that links to Europe and, by dedicated extension, to the US in Ghana; and potential capacity for 10 million lines.
Parallels with Globacom’s home territory in Nigeria abound. There are similar issues with logistics and geography and a similarity of focus between the two regulatory authorities, NCA of Ghana and the NCC of Nigeria.
So the cautious approach of Globacom in Ghana – whether made by choice or not – raises some questions as to why apparently expanding markets are not providing all the potential for new MNOs and increased competition.
To use South Africa as a comparison, it has to be pointed out that private and public sector interests are not as smoothly aligned as they might seem.
The step-by-step process of privatising telecoms in South Africa, often delayed and significantly behind its original schedule, was referred to as “managed privatisation”. It was also based on some assumptions regarding consumer choice and market growth that might now be seen as perhaps over-optimistic. This regulatory approach falls between two chairs: it may not allow the freedom that the private sector wants and it certainly will not happen at a pace driven by consumer demand. As it evolves with the goal of creating a market fair for all competitors it will, again, not move at a private-sector pace.
There is then a problem at both ends of the equation when calculating risks in new mobile projects. Despite the miracle of widespread adoption of mobile technology in Africa, the political realities run counter to the more fluid privatisation seen previously in the UK or Australia, to name two textbook examples. At the other end, the actual number of users is hard to establish and predictions based on any such assumptions can have major error margins.
In general, governments are not rapidly or heedlessly going to relinquish control of cash-cow telecoms. Hence, the concept of ‘managed privatisation’ which, cynics might say, really isn’t a free-market process.
As for market size, potential growth and defining saturation in any one country, the real figures are opaque at best. For example, South Africa has a population of about 50 million – twice that of Ghana or one third that of Nigeria. Current, reasonable figures suggest that about 84% of South Africans have a mobile phone or access to one. Figures for South Africa based on different criteria indicate over 100% market penetration but let’s stay with the most conservative numbers. Ghana’s mobile penetration is estimated at some 81% while Nigeria’s is around 55%. Check out Business Monitior’s ‘Ghana Telecommunications Report’ or Hot Telecoms’ Africa Statistics and Forecasts 2006-2015 for a current update.
Now look at per capita GDP. South Africa leads with over $10,000 per annum. Nigeria is at about $2,500 and Ghana about $3,300.
The one thing that drives consumer choices in mobile telecoms is novelty and the inevitable disaffection with existing operators. After that come the more mundane choices based on coverage, QoS, service offerings and, of course, price. It is certainly a risk, however calculated, for a new MNO to move into a nearly saturated market and hope to win over customers. Ghana is not as affluent as South Africa and Cell C has battled to gain market share even there. It is tempting to predict the same future for Globacom in Ghana.
No doubt, there is also an exit strategy. Assets can be sold off to other companies if the project fails. A quick look at a flurry of recent deals to unbundle and sell infrastructure in various parts of Africa shows that there is always such potential.
Despite the doubts, Globacom’s decision to launch in Ghana seems practical in terms of its regional presence, infrastructure and past experience. It was rated as the best network in Nigeria a few years ago, although recent figures would tell a different story, with Etisalat now the flavour of the month according to the NCC.
However, a very simplistic calculation based on stated figures gives this result: $750 million invested for a maximum consumer base of 10 million translates to an ARPU of $75 to break even. That seems achievable, until you factor in the likely slow adoption curve, based on Globacom’s reliance on disaffected customers migrating from the dominant two operators. If only one million migrate, the break-even is $750 or a fifth of the annual per-capita GDP. That looks less achievable.
Realistically, if Globacom can win five million customers within five years, its Ghana operation starts to look doable.
Whether it can do that remains a question that only time can answer.
The other question that cannot be answered without the test of time is just how much impact data services will have.
The pattern elsewhere in Africa is still for voice and text to dominate. Mobile-targeted services like Twitter have lower usage than in other parts of the world. A current survey shows South Africa has the highest Twitter usage, followed by Kenya and Nigeria. Ghana ranked 20 out of the 20 countries in the study.But one key point in that study is that young people (21 to 29) are driving mobile Twitter usage. Another is that, based on Opera usage, Nigeria is the fifth-largest mobile internet user in the world.That bodes well for MNOs throughout Africa, as the market moves to data services. Whether that could save Globacom’s Ghana initiative remains to be seen.
This article has been extracted from the 2 February 2012 issue of ‘Africa & Middle East Telecom-Week’ and was authored by Roy Johnson. Roy is a writer specialising in IT and business topics, who has regularly contributed to PC Magazine and Inter@ctiv Week, as well as editing TechNet Magazine for Microsoft. Roy was formerly editor of CommsAfrica and contributing editor for Intelligence magazine. __________________________________________________
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David McQueen of Informa Telecoms and Media writes:
The smartphone market is expected to continue its rapid growth over the next five years and, as a consequence, is increasing in complexity. As a result of this market development, new opportunities are arising for smartphones to target various segments and price tiers. This has led to the implementation of a variety of strategies from players across the value chain, which is reflected in the market positioning of the different operating system (OS) platform suppliers.
Informa Telecoms & Media broadly defines smartphones as mobile handsets that offer following criteria enabled by an advanced OS:
- Smartphones by region by OS type
- Smartphones by OS by product tier split into three categories
- Entry-level smartphones
- Core/mass market smartphones
- Super smartphones
- Smartphones by OS and by usability split by:
- QWERTY only (communication) smartphones – primarily used for messaging and productivity to a certain extent
- Touchscreen smartphones (media) – primarily used for multimedia access and entertainment
- Hybrid smartphones (productivity) – elements of both QWERTY and touchscreen with hardware and form factor designed for productivity
- Telephony smartphones (numpad) – traditional ‘mobile phone’ smartphones without touch screen or QWERTY keyboard
- Smartphones by network technology, e.g. LTE, HSPA, CDMA, etc.
- Smartphones by OS by price tier, using five tiers, US$400
- Smartphones by storage capacity
- Smartphones by processor type (e.g., monocore, dual-core, quad-core)
- Smartphone users, by region by OS and by market type: postpaid versus prepaid
- Smartphone data usage traffic (MBs), by region by OS, by application type (e.g.. video, messaging, browsing Internet).
The majority of these smartphone segments have been forecast by Informa Telecoms & Media.
Deep software-hardware integration and the role of CPU/GPU integration
- Deep software-hardware integration is becoming entrenched in the mobile handset market, enabling an enhanced user experience without compromising power consumption.
- Software-hardware integration can be achieved using different approaches depending on the addressable market and the level of support of various OS platforms.
- Qualcomm is leading in software-hardware integration but other chipset manufacturers, using various approaches, are catching up.
- Software-hardware integration could be used at the application level rather than OS level to add smartness to low-cost devices: MediaTek is championing this trend.
- Open source will play a great role in facilitating software-hardware integration.
> Although mobile operators still dominate the telecom retail market, they are facing increasing competition from independent specialist and mass-market retailers.
> Tablets and smartphones are opening a series of opportunities to independent retailers to innovate in this field. Operators’ current success in retail is still heavily based on the handset subsidies they offer. However, innovation is now required if they are to keep their leading position.
> Apple is an example to be followed. Its strategy illustrates how to create a good customer experience for trying new devices and features, finding the right balance in terms of creating a controlled retail space while at the same time driving sales at the operators’ stores.
Operators dominance under attack
Operators currently dominate the telecom retail market on a global level, accounting for around 61% of the total handset retail revenue (see fig. 1). This dominance is mainly a consequence of heavy handset subsidy policies and a strong investment in increasing their retail reach by opening a significant number of owned stores across their markets.
Fig. 1: Global, total handset retail revenue shares, by channel, 2010-2016
However, independent retailers are increasing their share in the market as the telecom handset market becomes a more…
The advantages of D2B systems as a way to charge for mobile content
The market for mobile remote payments can be segmented in the following categories:
- Remote payments for mobile digital content: The purchase of digital content delivered to, and used on, the mobile phone, such as ringtones, ringback tones, music tracks, games, videos, screensavers, etc.
- Remote payments for physical goods and services: The remote purchase and payments for physical goods, such as books, CDs, DVDs, electronic items, clothes, etc., as well as payments for services including transport tickets and utility bills via mobile phones.
- Remote payments for mobile prepaid top-ups: The service that allows prepaid customers to top-up their mobile account balance by paying for it remotely via their mobile phone and without having to go to a physical retail outlet and purchase vouchers.
Remote mobile payments form part of a family of financial services, which include mobile banking and person-to-person money transfers. In principle, these services could be provided to the consumer by a mobile operator, a bank or another financial institution such as creditcard companies, an independent third party or any combination of the three. The UK Payment Council, for example, is developing a payments platform via which any British bank can provide a portfolio of mobile-payment services; mobile operators will carry the data traffic.
Remote payments for mobile digital content
The market for mobile digital content is already large and relatively mature and a number of remote-payment services have been developed in order to enable the millions of micropayment transactions that are conducted every day. The most common is premium SMS (PSMS). However, the PSMS billing method has given rise to several concerns: absence of credit checks, fraud protection, flexible charging and pricing transparency. Although PSMS will continue to be used for the distribution of digital content such as wallpaper and ringtones that are relatively ‘data light’, more robust and collaborative payment mechanisms than PSMS are increasingly being adopted for media-rich applications.
Direct-to-bill (D2B) and WAP-billing systems have been developed to decouple billing from the delivery of content while enabling merchants to bill consumers more accurately and provide an appropriate level of security, fraud protection and transparency, irrespective of which operator or content provider is involved.
Many countries in Europe are using D2B systems as a way to charge for mobile content and have recognized its advantages. For example, the micro-payment scheme ‘Payforit’, launched in the UK in September 2007 by all five of the country’s mobile operators, is now well established and used by many content providers.
In June 2011, Verizon Wireless in the US announced an agreement with Payfone to enable its subscribers to purchase digital goods on their mobile phones with one click via the mobile
The banks, money transfer organizations and, to a lesser extent, the credit card companies are restricted by their existing branch networks and labor-intensive back-office processes, which have tended to make… < …read more… > < …more… >
Informa’s new research on the Western European TV sector has found that several pay TV markets are now at the ‘mature’ stage of development, with some of them reaching saturation point. This state of affairs produces a number of trends, which often vary according to whether an operator is providing top-tier premium content, or a lower cost pay TV ‘lite’ offering.
For long-established premium pay TV operators there is no panic over reducing, or even declining, TV subscriber numbers. The strategy is to upsell more services to existing clients, whether this involves enhancements to the TV experience – HD, 3D, multi-room, DVRs, etc – or the adding of broadband/telephony subscribers via bundling.
As part of this enhancement, some operators are also positioning themselves as offering a ‘next generation’ entertainment service – as Virgin Media (UK) and Ono (Spain) are doing with TiVo and Liberty is doing with its Horizon box.
In the cable sector this can involve operators ‘giving up’ on very low-ARPU analog subscribers that use the TV service as a utility rather than a premium entertainment service. They accept that some of these homes may well churn to low-cost or free alternatives, but see little upside in expending to keep them. Instead the operators are focusing on those customers who are upgrading – identifying them as having greater upsell potential.
In some markets cable, specifically, is also suffering from ‘grass is greener’ syndrome whereby a long-term analog cable subscriber is reluctant to change their arrangement with the cable operator by upgrading to digital, when they are unable to convert back to analog if they are unhappy with the experience. Instead they may experiment with a low-cost IPTV subscription as a secondary service. Finding the digital value-added services provided by IPTV attractive, the analog cable service is often…