Outlets of telecom companies such as Airtel and Vodafone may soon double as bank kiosks for financial services like funds transfer or bill payment, especially in parts of the country where there are very few banks or none at all.
The government has set up a high-level inter-ministerial group to consider introducing a mobile-based model without links to bank accounts for delivery of basic financial services. This would allow customers to transfer money to a distant relative or pay shopping bills at the press of a button.
The group would define the type of transaction to be allowed, quantum of financial limits, guarantee to be offered by airtime vendors, eligibility of agencies involved, role and accountability of service providers and interoperability among them, interface with the Reserve Bank of India, security of deposits and transactions, and geographical coverage of services including borders and sensitive areas.
The group, to be set up under the IT ministry that mooted the proposal, would comprise secretaries or top officials of the Ministry of Home Affairs, telecom, financial services, posts, rural development, Planning Commission, UIDAI, and representatives of telecom regulator TRAI and RBI. It would work out the norms and define the role of various stakeholders in the report to be submitted to cabinet secretary in January.
The IT ministry, in a presentation to the cabinet secretary, suggested that low-value transactions should be allowed through mobile phones with little or no involvement of banks. It also proposed future two-way links between the UID Authority and mobile operators. It said the maximum permissible limit of Rs 5,000 should also be increased further to serve the purpose of financial inclusion.
A finance ministry official said, “RBI is comfortable relaxing the cap, but it is not in favour of providing financial services without links to bank accounts. It is of the view that this may lead to security problems as Know Your Customer (KYC) norms of banks are more stringent than mobile operators.”
A top official in the IT ministry said, “KYC norms can be enhanced if necessary. The technology is already there and regulatory barriers should not prevent people from getting the convenient, fastest and cheapest mode of accessing financial services. It will help curb money laundering as all transactions through this channel will be fully traceable. This will also bring down operational costs for banks.”
The model being proposed is similar to M-PESA in Kenya, which enables users to complete basic banking transactions without visiting a bank branch.
Customers can deposit, withdraw and transfer money from a network of airtime resellers and retail outlets acting as banking agents. Of about 31 million people in Kenya, 5.8 million use the service. The model has been replicated in Afghanistan and Tanzania, while Egypt and South Africa are also considering it.
RBI came out with “mobile wallet” guidelines in August 2009, which allow mobile phone users to deposit with telecom operators up to Rs 5,000 that can be used for merchant transactions. Some companies are piloting the service under whichthe recipient will be able to collect the money from an outlet of the mobile operator by showing a transaction authorisation code received from the sender.
There are about 400 million bank account holders in India, whereas the number of mobile phone subscribers has reached 490 million with an addition of 10-12 million new users every month. Of these 490 million subscribers added in the last 14 years, about 50 per cent do not have a bank account.
Mobile financial services will help 95 per cent of the 6.4 lakh villages in India that do not have a bank account. In December last year, Vodafone, which is running M-Pesa in Kenya for last 18 months, had proposed to the department of posts to facilitate mobile financial transactions through its post offices. It had asked for a share of revenue from the transactions process ed through this system.
Banking at phone hubs soon
MTS rolls out prepaid data service in Delhi
MTS, the CDMA mobile service of Sistema Shyam Teleservices Ltd (SSTL), has announced the launch of its high speed prepaid data service, MBlaze, in New Delhi. The service enables users to access few websites such as Yahoo, Wikipedia and Makemytrip without any data download charges. It is available at a rate of 10 paise per MB with a speed of up to 3.1 Mbps (megabits per second).
The prepaid data service is free of any roaming charges and security deposit and will be available in eight circles – Delhi, Rajasthan, Kolkata, West Bengal, Bihar, Tamil Nadu, Kerala and Karnataka. It will also be made available in Mumbai from December.
MBlaze is an internet Modem which can be connected to a computer through USB. The modem can be bought for Rs 3499 for a premium model and Rs 2999 for a standard model. The price points for usage, depending on the volume of data downloaded per month, range from Rs 198 to Rs 5000.
Vsevolod Rozanov, president and chief executive officer, SSTL, says in a company statement, “Data services are going to expand beyond the metros with people demanding real time information and knowledge. We see the market expanding beyond the corporate user to include SME (small and medium enterprises) and students. Data services integrate the user with real time information and offer a wide array of benefits including interactivity and gaming.”
Sanjay Bahl, chief operating officer, Delhi-NCR and Haryana circle, MTS, adds, “All our base transmitting stations in Delhi-NCR are high speed data enabled, and hence MBlaze subscribers will have seamless connectivity even in a traffic jam of Delhi roads.”
MTS currently has over 2.5 million subscribers in nine telecom circles – Kolkata, West Bengal, Rajasthan, Tamil Nadu, Kerala, Bihar, Jharkhand, Delhi and Karnataka.
SSTL is a joint venture between Sistema of Russia and the Shyam Group of India. Sistema is the majority shareholder in this joint venture with a 74 per cent equity stake, along with the Shyam Group holding a 23.5 per cent stake and the remaining 2.5 per cent being publicly held. SSTL has the license to provide mobile telephony services in all the 22 circles across India.
Multimedia services to surpass share of SMS in revenues: IDC
According to IDC, a USA-based firm providing market intelligence and advisory services, mobile multimedia services will make up 11 per cent of the total revenue from mobile services in Asia Pacific excluding Japan (APEJ) at the end of 2009, surpassing SMS revenue contribution for the first time.
The research firm says in a press statement that most mobile devices today have a built-in networking capability such as USB, Bluetooth, or WiFi and this gives mobile users improved access to content.
Last year, contribution of SMS to mobile revenues was 10.3 per cent, while that of multimedia was 10.1 per cent. IDC predicts that SMS contribution will be remain at 10 per cent in the coming years but the contribution from multimedia will be constantly increase.
Alex Chau, senior research manager for IDC’s Asia Pacific mobile and wireless technologies research, comments, “Early drivers of growth in mobile multimedia content have been ringtones and wallpaper downloads, particular with the younger demographics. Today, the emergence of handsets featuring larger screens and even touch-screen interfaces has pushed the uptake of mobile multimedia services to a new level. This has spurred content and application developers to develop tens of thousands of applications to satisfy this new demand amongst mobile users.”
He adds that the next stage of growth will require mobile operators to invest in and upgrade mobile networks in the region in order to handle the mobile packet data traffic growth.
IDC believes that with the foray of competitors such as Apps Stores, the market will become more competitive, which will lead to an eventual price war, benefiting mobile users in APEJ.
IDC is a global provider of market intelligence and advisory services for the information technology, telecommunications, and consumer technology industries. IDC analysts provide global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. It is a subsidiary of IDG, a leading technology media, research, and events company.
Idea Cellular to invest Rs 300 cr in Assam, North East
Idea Cellular, the mobile operator owned by the Aditya Birla group, has announced the launch of its 2.75G GSM network in Assam.
Speaking to Telecom Yatra, Ambrish Jain, director, operations, Idea Cellular, says, “We will invest Rs 300 crore in Assam and North East over a span of three years.” Jain further stated that of this amount, the company has already invested Rs 200 crore in one year and the rest will be invested in the next two years.
With this move, the company has expanded its network to 21 of the 22 telecom circles in India. The state of Assam has a teledensity of 22 per hundred population.
Idea’s mobile telephony services at launch will be available in 13 districts of Assam – Barpeta, Bongaigaon, Cacher, Dibrugarh, Jorhat, Kamrup, Karbi Anglong, Kokrajhar, Nagaon, Nalbari, Sibsagar, Sonitpur and Tinsukia.
The mobile operator claims that it will double its network to 500 cell sites, mobile phone base stations that transmit radio signals to mobile phones, to cover 56 towns and 1400 villages in Assam, by March 2010. It will also set up a network of 450 cell sites in the North Eastern region during this period.
Idea’s services in the remaining circle of North East, comprising of the six states of Nagaland, Manipur, Meghalaya, Mizoram, Tripura and Arunachal Pradesh will be launched later in the year.
Idea will establish several customer service centres and a retail network of exclusive stores in the region. The company claims that this retail and service network will grow to over 4,420 retail outlets and 35 exclusive showrooms in Assam, by March 2010.
Other operators who also have presence in Assam and North East are Vodafone and Reliance Communications.
Mobile subscriber growth at 70% in Circle C towns
According to TRAI figures, Circle C registered a year on year growth rate of 70 per cent, an addition of 2.3 million mobile subscribers in absolute numbers.
According to the latest figures released by the Telecom Regulatory Authority of India, the telephone subscriber base in India reached 525 million in October, taking the teledensity to 44.8 per hundred population. The wireless subscriber base stands at 488 million.
In a break-up of circle-wise growth in mobile subscriptions, the figures reveal that in absolute numbers, Circle B had the highest number of additions at 6.8 million in October. In percentage terms, the growth rate is about 52 per cent year on year. This circle comprises Punjab, Rajasthan, Madhya Pradesh, Chhatisgarh, Kerala, Haryana, Uttar Pradesh (East), Uttar Pradesh (West), West Bengal, Sikkim and Lakshwadeep.
While the absolute growth for Circle C is 2.3 million in October, its yearly growth rate is accelerating at 70 per cent. This circle comprises Bihar, Jharkhand, Orissa, Assam, North East, Jammu & Kashmir and Himachal Pradesh.
As for the other circles, mobile subscribers grew at 47 per cent in Circle A (Gujarat, Andhra Pradesh, Karnataka, Tamil Nadu, Maharashtra and Goa) and 37 per cent in metros (Mumbai, Delhi, Chennai and Kolkata).
Interestingly, wireline or fixed line telephony is registering a negative growth in all circles on a yearly basis.
TRAI fixes mobile number portability charges
The Telecom Regulatory Authority of India (TRAI) has rolled out regulations to determine the charges applicable for the implementation of mobile number portability (MNP) in India. It has issued the MNP ‘Per port transaction charge’ and ‘Dipping charge regulation 2009’ as well as the Telecommunication Tariff Order 2009.
The per port transaction charge is the charge payable by the recipient operator (operator to whom the number is being ported or transferred) to the MNP service provider, who will process the Porting request. The dipping charge is the charge payable by an operator to the MNP service provider for dipping of each message. The porting charge is payable by the subscriber to the recipient operator for porting his mobile number.
As per the TRAI press statement, the regulator has set the per port transaction charge at Rs 19, the dipping charge is left to mutual negotiation between the operators and MNP providers. The porting charge, payable by the mobile subscriber, has also been fixed at Rs 19. However, the operators have the liberty to charge any amount less than or equal to the porting charge. These charges will come into effect from December 31.
TRAI also states that it has determined these charges after doing an analysis of the stakeholders’ comments and the cost details given by the MNP providers.
The regulator had announced in September that MNP shall be implemented from December 31 in metros, and by March 20, 2010 in the rest of India. It had also announced several guidelines for the implementation of MNP in the country.
MNP allows subscribers to retain their existing mobile phone when they move from one mobile service provider to another irrespective of the mobile technology, or from one mobile technology to another, in a licensed service area.
Bharti Airtel slashes roaming rates
Further intensifying the ongoing tariff war, Bharti Airtel has announced a new plan that reduces Roaming charges on its network by nearly 60 per cent.
Under the Airtel Turbo plan, customers will be charged at 60 paisa per minute for all incoming calls and for all local and STD outgoing calls to an Airtel number while on roaming. For all local and STD outgoing calls to any network other than Airtel, subscribers will be charged at 80 paisa per minute on roaming.
The service provider, which has 115 million customers across the country, had earlier launched Airtel Advantage Plan and Airtel Freedom Plans where both per minute and per second rates were offered to the subscribers.
“Recent research has shown that customers need benefits while travelling and are not satisfied with just local calling benefits,” says Atul Bindal, president, mobile services, Bharti Airtel, in a statement.
To avail of this benefit, Airtel prepaid subscribers will be charged a plan enrollment fee of Rs 98, which gives them an incoming validity of one year. For postpaid customers, Airtel Turbo plan comes with a monthly rental plan.
Social networking on mobile gaining momentum in Asia: IDC
Social networking site users in the Asia Pacific are increasingly switching over to the mobile medium, according to the findings IDC’s recent survey report, ‘Examining Usage, Perceptions, and Monetization: The Coming of Age for Social Network Sites in Asia Pacific’. IDC is a global market intelligence company which focuses on IT, telecom and consumer technology.
As per the report, 50 per cent the users interviewed are now accessing social networking sites via mobile phones in India, China, Korea and Thailand. This is particularly widespread in China and Thailand, where 62 per cent and 65 per cent of the given users get news alerts and notifications, receive and reply to messages, upload photos, or update personal status and profiles on popular networking sites via the mobile internet. However, Australia and Singapore have the lowest percentage with only 19 per cent and 25 per cent of respective users using mobile browsers to access these sites weekly.
The IDC survey also indicates that the high cost of mobile internet is possibly keeping many customers away from mobile social networking. According to the survey, a majority of the respondents who have never logged in to these sites through mobile before have cited high tariffs as the main obstacle. These users have said that they would try out mobile versions of the sites if the data rates became more affordable. Apart from tariffs, availability of user friendly mobile applications is also required to up the usage of mobile web.
Debbie Swee, market analyst, IDC Asia Pacific Emerging Technologies Research, said in a company statement, “The prevalence of owning a cellular phone over a PC in China, India and Thailand has directly boosted the popularity of mobile social networking sites access. For mobile operators in China, India and Thailand, IDC believes a low flat rate Internet access fee would complement and increase mobile social networking site adoption. However, in Australia, Korea and Singapore where data tariffs are already relatively low, operators need to correct users’ misconceptions of pricey data plans through advertising and other marketing efforts.”
IDC’s Asia Pacific social networking sites survey was conducted by interviewing 1,400 social network site users, aged between 15 and 35, from December 2008 to January 2009. The survey is part of a series of studies that evaluate the impact of Web 2.0 on Internet users in Australia, India, China, Korea, Philippines, Singapore and Thailand.
BSNL launches m-learning service
State-owned operator BSNL Mobile has launched a spoken English mobile learning service called ‘Learn English’. It has been designed by VAS companies EnableM Technologies and OMobile Global.
Created especially for the mobile medium, the voice and SMS service teaches spoken English through simple stories and everyday situations that the common man can relate to. Subscribers have the option to select their level of learning based on their proficiency of the language. They can also select specific professions, situations or conversations to learn English. Similarly, subscribers can listen to conversations based on situations they might encounter everyday.
Daily SMSs and practice tests are a part of the learning package. To make the service user-friendly and self-paced, certain options such as bookmarks, pause, etc have also been introduced. As part of the service, subscribers also receive a new word daily through SMS.
Users have to dial in at a number to use the service, which is available in nine Indian languages – Hindi, Tamil, Kannada, Marathi, Bengali, Gujarati, Punjabi, Telugu and Malayalam.
The service is available at a subscription cost of Rs 20 per month and call charges of 30 paise per minute.
Bharti Airtel builds connectivity to Far East
Bharti Airtel has announced the launch of its Far East Connect network, which the company claims will meet both the expansion and diversity needs of its network customers in the region.
Through the network, Bharti Airtel will be able to deliver connectivity on the Asia America Gateway, a 20,000 km high Bandwidth fibre optic submarine cable system that will connect Southeast Asia to the United States. A consortium of 19 companies, including Bharti Airtel, AT&T and BT, have developed this cable system that will carry commercial traffic in the region. The company claims that this has made available an additional one terabit per second of capacity to the region.
Bharti Airtel has also entered into partnerships for providing connectivity to Japan, Taiwan, Australia and South Korea through multiple alternate routes.
Manoj Kohli, chief executive officer and joint managing director, Bharti Airtel, said in the official statement, “Our investments of over $500 million over the last two years are designed to create a global network that offers unmatched resilience and maximum diversity. Asia and the Pacific represent one of the fastest growing markets for ICT and as industry leaders in India.”