Forget e; go mmmm

All said and done, it's just a change in the alphabet. With e-Commerce in the doldrums in India, BT examines the viability of m-Commerce, or mobile commerce.

By Pooja Garg

"Mobile internet is going to be the most fantastic thing that a time-starved world has ever seen" Jeff Bezos, CEO, Amazon.com

After a long lull, the cellular industry has again started to show signs of growth. While 5.12 lakh users were added between January and December, 1999, the numbers have already been surpassed in half the time this year--the number of users added from January-June, 2000, is 5.98 lakh, with June alone counting for an addition of 1.4 lakh users.

Combined with the growing Net penetration in India, now is the time to take a look at mobile commerce (m-Commerce) in India. According to NASSCOM, from 1.7 lakh in November, 1998, the number of Net subscribers had soared to 10 lakh by June 30, 2000. By the end of this fiscal, another 6 lakh subscribers are expected to join the ranks, and by fiscal 2002, the total number will more than double to 20 lakh.

Thanks to the cyber laws, the security and authentication issues are finally getting addressed, albeit slowly. And the focus on packet-based GPRS technology along with increasing bandwidth availability should make web-access from the mobile hand set that much easier.

A KPMG report on mobile internet predicts that within three years, there will be more wireless connections to the Net than fixed, and the majority of e-Commerce transactions will terminate or originate on a wireless device. Already, the market for m-Commerce in Europe alone is estimated to be worth Euro 23 billion compared to Euro 323 million in 1999. By 2005, there will be an estimated 1.2 billion mobile users globally: 750 million forecasted data users, easily outnumbering the predicted 670 million wired Net users. In all three regions (Europe, Asia Pacific and US), in fact, there will be more wireless connections to the Net than fixed.

Application or service dimensions such as quality of service, security, personalised content, location sensitivity and consistency of presentation across a range of access devices will be the new differentiates. Price, a prohibitive factor right now, is also to go down, like in Japan and several European markets where mobile prices are already at or below fixed prices.

In India right now, the banking and financial segments seem to be leading the m-Commerce way. In banks, ICICI and HDFC have tied up with cellular operators like Airtel, Orange and so on to offer certain mobile banking services to the customer. You could, for example, request for account balance, stop payment, cheque book, cheque status, demand draft, banker's cheque, fixed deposit enquiry, and transfer of funds within the bank's own branches. Besides, you can pay your electricity and telephone bills on-line. Both banks also operate payment gateways which authenticate on-line transactions. However, of the many limitations with m-Commerce, one with m-banking is that you still can not transfer funds from one bank to another.

Sharekhan.com, the on-line-trading site, having WAP-enabled the site some time back, now plans to offer mobile trading as well within the next two months. Says Dheeraj Aggarwal, 31, CEO, Sharekhan.com: "Right now, we have some 2000-3000 WAP phones in India. Of these very few would be using it for m-Commerce. However, with 2 million cellular subscribers right now, a 100 per cent growth in the users is predicted by next year. Of this, some 30 per cent are expected to move to WAP. If some 60-70 per cent of them take to m-Commerce, which is very probable, considering that this segment is moneyed and comfortable with new technology, we are looking at good numbers".

Sanjay Sharma, General Manager, Business Development, Ericsson says, "We are in talks with some banks to provide them with end-to-end mobile banking and security solutions". Adds he, "It will take a couple of applications to be successful before m-Commerce will pick up. Besides that, other issues like security, infrastructure, bandwidth, back-end and logistics etc. need to be in place". Ericsson has products like Mobile E-pay which is a payment gateway and Mobile Wallet which allows one to buy through the mobile using one's credit or smart card.

So, mobile commerce could be the next hot thing given the resurgence in the mobile industry. Given, of course, how well the industry takes the challenges of security, delivery, infrastructure and prices.

ELEMENTS:

A) An ideal market for mobile e-Commerce could have the following characteristics:

relatively high penetration of mobile users
high Internet awareness
relatively high e-commerce maturity
general consumer demand for new services
a high proportion of early adopters, with a willingness to pay.

B) Certain sectors will benefit quicker from mobile e-Commerce than others, and it is these that are likely to drive its introduction:

bank and finance
travel and transport
media and entertainment
retail

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