With mobile payments – both micro and large transactions – fast becoming the norm, telecom operators across the world are scrambling to get a larger slice of this growing pie. Mobile broadband traffic is growing exponentially, and operators not geared to take advantage of this will be the ultimate losers, experts warn.
“Today Mobile Data occupies the highest mindshare in the operator community. The profitability of telecom service provider’s data operations depends on how they act in response to the explosive growth in mobile broadband traffic,” said Vikram Shanbhag, Vice-President, Mobile Messaging Solutions, Comviva, a global provider of mobile solutions beyond value-added services.
Shanbag, who’s in Dubai to attend the two-day Middle East Telco Word Summit 2011, said “mobile data is a hot topic globally, more so in the Mena region, given the proliferation of smart devices, smart networks and a smart subscriber base that is looking for change.”
Mobile data is witnessing exponential growth in the region, especially the UAE, where mobile payments are part of key government initiatives.
The mPay service, which allows residents to pay using SMS for services ranging from utility bills to Salik payments, saw a 50 per cent rise in collections over the first half of 2011. “With the increased adoption of smart phones, subscribers expect a PC like experience on their mobile device. As the demand for mobile data is growing by leaps and bounds, operators around the world are presented with a unique opportunity to generate new revenue streams and grow their business further,” added Shanbhag.
“Notwithstanding the fact that the mobile data market in the Mena region is on a steep growth trajectory, 133 per cent in the period 2009-14, operators need to ready themselves now for even further growth,” Shanbhag suggested. “As competition is fierce and there are limits to data service charges [that can be levied on] the customer, operators are faced with a trade-off between the revenue-to-capex ratio and the quality of experience on offer — unless they handle the data traffic more intelligently,” he added.
“Given this, operators are looking at changing the rules of the game, they are aware that standard run-of-the-mill plans and packages are history and they must innovate on creating value for every dollar that the subscriber spends on their network,” Shanbhag said.
According to a 2011 Cisco Report, Mobile data traffic will grow at a compounded annual growth rate of 92 per cent from 2010 to 2015.
Furthermore, it is estimated that 2/3rd of world’s mobile data traffic will be video by 2015.
Shanbhag added that despite investing heavily and adding peripheral solutions, the gains haven’t been substantial so far. “The outcome of this has not been impactful as envisaged and the challenges remain the same, namely how to Manage, Optimize and Monetize. I call it the MOM challenge for the mobile operator,” he said.
“More operators are now convinced with the thought that a single integrated solution to address the MOM challenge would be the way forward for them to build, address and evolve their mobile data infrastructure,” he added.