Mobile money is a recurrent theme for the watcher. See the mobile money overview post and Apple’s incorporation of NFC into iPhone post. As anticipated, all the industry players are jostling for position and there have been a number of recent announcements by UK mobile operators.
O2 announced in an interview with the Sunday Telegraph that they had applied for an e-money licence which will enable them to provide payment services without needing to partner with a traditional bank. James Le Brocq, managing director of O2 UK‘s financial services division, commented to NFC world that they plan was to: “bring the contents of your wallet to your mobile phone and create your mobile wallet.” This will complement their existing Cash Manager and Load and Go cards which are provided in association with Natwest. O2 will not renew their partnership with Natwest when it expires at the end of the year.
O2’s announcement follows the recent announcement by Everything Everywhere and Barclaycard that they would be launching a contactless mobile payment service in the UK by summer 2011. Their customer proposition is deceptively simple. Orange customers with phones appropriately equipped with NFC capability (which at the moment looks like only the Nexus S, but choice will rapidly increase) will be able to touch their phones against contactless payment terminals to pay. Payment will be SIM-based, with payment capability provided by Barclaycard.
Although no integrated product or services have yet been announced by either O2 or Everything Everywhere, the interesting developments to watch will be the integration of mobile payment with location-based services.
The other mobile operators currently appear to be behind the curve in the UK with Vodafone focusing more on their international mobile money transfer product (M-PESA) aimed at unbanked customers in developing markets such as Kenya, Afghanistan and Tanzania, with plans to introduce them to South Africa, Qatar and Fiji, and no plans yet announced by struggling Three.
My eye was caught today by a story on TechCrunch (an excellent blog BTW) that Apple may incorporate near field communications technology (NFC) into its next generation of devices, thereby enabling ‘real’ payments on the move. For those confused as to the difference between mobile payment for real and virtual goods the easiest way to think about it is to think about what would happen if you ever tried to buy a can of your favourite soft drink via the iTunes Apps store.
In a prior post about the eco-system for mobile money I described my conceptual mental map of three overlapping circles – traditional bank and credit cards, internet payment and mobile payment. As the TechCrunch article makes clear, this would position Apple bang in the middle of the intersection between mobile and internet payment and could be another ‘game-changer’. For me, the real question is here is who does what to react? Players in each of the circles have to date tended to define their competitors by reference to their existing competitors and there is not currently significant co-operation across the circles (until you tell me otherwise of course…).
It seems to me that Apple’s move (which of course is unconfirmed) will require some of the other players to co-operate in order to react. It is an issue I am spending some time on at the moment, by undertaking some primary research with some of the market players. To the extent confidentiality permits I will share any insights in future posts.
With my first post done, I thought it best to try and provide a little substantive content. Two years ago, I spent some time interviewing various CEOs, strategy and regulatory directors in various international communications companies to get their thoughts on the big issues that were coming up. With the end of the year approaching it seemed like an opportune time to revisit that research and reflect on whether those issues were still current, and therefore worth continuing to follow.
At the time of the research, our over-riding thesis was that the telecoms industry was going undergoing structural changes that meant that regulatory structures well-suited to dealing with steady-state markets were being overwhelmed by the changes confronting them. The market and regulatory result was likely to be similar to that experienced when other step-changes (competition, mobile telephony, broadband, etc) impacted on the market – confusion and delay. Events over the past two years (even putting aside the small matter of the global financial crisis) would appear to have validated that idea.
The themes identified in 2008 were:
- Consumers, rather than the market players, were the long-term winners. Amongst the market players, returns to the incumbents’ shareholders were better than the new market entrants.
- Next generation access (that is, high-speed fibre based last mile connectivity to the home or business) would be the defining issue for the telecoms industry globally. Regulators however did not know how to approach the issue.
- The tension between the pipes and the poetry (telecoms infrastructure v content and services provided over that infrastructure) was starting to surface – and in particular how the costs of network upgrades would be financed. Net neutrality had not at that stage really crossed the Atlantic, but the industry could see the way the winds were blowing.
- Spectrum availability, in particular as an enabler of ubiquitous ‘current speed’ broadband, was identified as a critical factor issue to resolve, even before the iPhone and iPad.
Looking back, those themes still as relevant today as they were in 2008, so I will return to them in future posts.
Finally, the star trek reference of the title has got nothing to do with trying to spoof search engines, but in the real world it does strike me that we need less ‘next-generation’ ideas and more plain English action plans to actually make things happen.