Input on Telcos and Innovation by Achim Hebestreit, Global Lead SAP Mobile for Telecommunications, and myself:
In 2006 Muhammad Yunus has received the Nobel Peace Prize for the achievements he pulled off with his Grameen Bank. It gives microcredits to people too poor to qualify for traditional bank loans and the bank made a little fortune with this model of investments. So, if the Nobel Committee was composed of international CEOs you can be sure Mr Yunus would probably have received the Nobel Prize for Economics as well. He was able to create business opportunities where they were mostly overlooked or declared impossible. He did that by offering new services and out-of-the-box thinking.
You can find that kind of innovation when you take a look at Wanda Movil. Telefonica offered the mobile money service to their clients in twelve Latin American countries. A lot of them are unbanked. They are refused a bank account because they have no permanent residence, no fixed income or no frequent employment. However, they do have a mobile phone. Telefonica’s Movistar alone has got 87 million clients in the region. For them, Wanda Movil can make payments far more convenient. Not just for those with a smartphone but for every mobile phone user. So, even though Telefonica and its partners are not directly aiming for a Nobel Peace Prize, it still enables its customers with payment possibilities they did not have before and neutralizes some of the disadvantages they face due to their lack of a bank account. That’s quite innovative thinking for an industry which had to take a lot of beating for sleeping while the internet revolutionized business and the world outside. But examples like Wanda Movil or Vodafone’s mpesa in Africa prove that these companies are willing to invest in new ideas. In unlikely places. After immobility and rigidity during the past “internet decade” telcos can be and, for some degree, are already a driving power behind new mobile innovation in a new mobile age. At least, they are much more forward going than many other industries. Above all, banking industry made – with a few exceptions (e.g. Standard Bank in South Africa) – no use of their market position in the fields of mobile money. In that way they missed all the clients they have not had, yet. Fortunately, these were mobile phone users.
But for telcos the mobile wallet is double-edged and not in all respects the best showreel for telco innovation. While “mobile money” solutions like Wanda Movil proves that telcos are willing to push the mobile wallet and want to own this game-changing technology, the industry is hesitant when it comes to “mobile payment”. And that’s for the wrong reasons. Most restrain in the industry is due to the lack of a standardized NFC payment method. But to get something straight from the very beginning: NFC does not equal mobile payment. There is NFC without mobile payment (for example when you get in the car and your board computer synchronizes with your mobile phone) and there is mobile payment without NFC. People who ever wanted to park their car in Vienna know that. There are no park ticket machines but you have to pay for parking with your mobile phone. In fact, that is quite convenient. You get an SMS some time before your car park ticket expires. So, if you are in the middle of dinner or you have still not find a jeans that fits you can extend the ticket at the push of a button. And NFC is not involved, at all. It is a sure thing that NFC would make mpayemt easier, but that fact that the Iphone 5 has no NFC does not nail mobile payments’s coffin. Even on an Iphone, mobile payment is very much alive.
The mobile wallet has got huge potential. There are a number of industries trying to make a stand here. If you wonder if it is a hype or not, teclos are among those who can give a good answer. If they embrace the mobile wallet as whole – that is to take mobile payment as serious as mobile money – they have the possibility to make it a complete service with a real added value. But for that innovation and investment is necessary. But sometimes even little investments in great ideas can pay off big. Ask Mr. Yunus.
Interested in teclos and/or mobility? Follow us on Twitter @ahebestreit
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