Mobile operators and the finance industry
For me, this week's most significant announcement has been the news that China Mobile via Guangdong Mobile is buying a 20% stake in Shanghai Pudoug Development Bank. Co-operation is going to centre on "the joint development of mobile phone payments business, mobile bank cards business, mobile funds transfer business and other forms of mobile finance and mobile e-Commerce businesses, the joint research and development of the bundling of other forms of mobile communications and finance products as well as the joint in-depth research and development of new technologies and new products of future mobile finance and mobile e-Commerce businesses.." Wow! No room for doubt there. The announcement follows SK Telecom's December announcement that it is buying a 49% stake in Hana Card, with similar aims of developing mobile financial services, specifically mobile credit cards. It's not just in China and Korea that mobile payments initiatives are taking place of course. But these are two of the higher profile moves and they involve significant investments, and alliances with the finance industry. We've seen Orange and Barclaycard teaming up. So why are these developments happening? Well there are a couple of aspects that I could mention, amongst others. The first is to provide value added services for mobile subscribers, with the twin benefits of firstly retaining them as customers and secondly of increasing ARPU, which all mobile operators are constantly aiming to do. Basically, the more services that a mobile operator can associate with a user's phone, the less likely they will be to want to move to a new operator because of convenience. It's not just the prospect of transferring service though - it's also that everyone personalises their device so much that if an operator can add another layer to this with financial transactions then it just serves to increase the inconvenience of moving. Smartphones are also driving retail more and more too! Don't forget ticketing, coupons and banking either. I guess when you add all this together, entering the mobile commerce market is a "must" rather than an option.