“Do you want to be a Microsoft where people have to use you? Or do you want to be an Apple where people want to use you?” That is the question facing telcos the world over as data services are turning them into dumb pipes and OTT (over the top) providers offer everything from voice to premium videos without the network getting anything.
In the west, cellcos have responded with restrictive contracts, traffic shaping and exclusive partnerships to protect a saturated market, but one company believes that the way to increased profitability is now being pioneered in the east as we move towards a data-centric future.
Raj Thangiah, VP and GM for Asia at Convergys, believes that the next frontier is all about micro-payments around the SIM and monetising subscribers. Central bank rules in Indonesia and the Philippines now allow much more freedom for telcos to act as a payment gateway or even a bank, and this trend is spreading.
In the west, everyone has a credit card. Anyone can jump on a plane, rent a car, and check into a hotel without using cash. But in much of Asia, this is but a fantasy. Up until now, businesses have been copying strategies from the west, but that means targeting only the 5% of people who have credit cards.
Conversely, most people have a mobile phone, albeit a pre-paid one. Turning that into a wallet is now possible, thanks to the end of OS fragmentation and ever cheaper smartphones. The market is convalescing into Apple, BlackBerry and Android, the latter now reaching down well into the lower rungs of the prepaid-only demographic.
The challenge facing cellcos as they roll out their 3G and 4G networks is losing their customers. The telephone number, even without mobile number portability, is no longer a user’s identity, but rather it is their BB PIN, Facebook or Google account. The networks are spending huge amounts of money rolling out data networks and at the same time users are less and less loyal and can switch to a better network any time. Clearly this is not sustainable.
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