Wireless spam: self regulation is better than super legislationnews

Due to a heterogeneous mobile network system, a high penetration of mobiles and emerging third generation wireless data networks, a large number of us will sooner than later have conveniences such as high-speed multimedia, video conferencing and computing literally at our fingertips. However, mobility while creating the magical illusion of being footloose and fancy-free also brings its own nuisance value.
The filing of a recent PIL in the Supreme Court of India against unsolicited voice calls to consumers by telemarketers is just the beginning.
Current IT law, as one is being reminded by numerous sensational exposes, does not quite address data protection and concomitant privacy issues (the cause of unsolicited marketing or spam) beyond those associated with the immediate concerns of the lucrative back office business viz. tampering, hacking, and damaging of computer data and systems.
For starters, spam - wireless, phone or internet - needs to be covered by fresh data protection and privacy provisions as suggested by a recent government committee. This can be simply addressed by making it mandatory for marketers to not use or disclose non public information for any kind of digital marketing to a third party without the prior consent of the customer.
As early as two years ago at a well attended seminar convened by the author under the auspices of the Indian Merchants Seminar (IMC), Mumbai, mobile marketing was hailed as a new and lucrative market created by technological advances. At the next level, it was envisaged that at some point wireless advertisements in the form of emails and mobile imagery delivered to cellular phones would offer consumers time and location sensitive information. For the past several months now there has been a sudden proliferation of three and four digit short codes registered by celcos, media companies, savvy cellular telemarketing companies, along with the ubiquitous 10 digit numbers often used for voice and SMS-based solicitation by ghost marketers.
These marketers and cellco service operators, sensing new revenue streams through retailing bulk SMS to various short code marketers and media companies at premium prices for promotions, loyalty programmes, feedback, reminders and alerts, quizzes, voting, lottery, launches, contests and premium entertainment and information have led to a glut of intrusive communications.
Subscribers, however, view this new form of marketing as more of a nuisance and intrusion than the promises and methods employed by these digital solicitors. Clearly, those behind this innovative form of marketing have once again failed to consider a possible backlash as being akin to 'stalked' by marketers.
Evolving technological innovation will continue to drive opportunities for spam. Modern-day bandwidth management enables spectrum owners to optimise between voice and data traffic and increase 'data' throughput per second. While voice traffic has reached critical mass, operators will aggressively look for data and other bandwidth-hugging value services to get more bang from their bandwidth buck.
Also, operators will continue to look to derive further value from the simple text-based SMS, rather than its advanced counterparts like MMS and location based services (LBS). While legislation is one sure fire way to protect consumer interest, in an over legislated country (with a dubious enforcement record) sensible self-regulation by marketers from an early stage can easily bring about the desired result.
In 2002, Japan and the European Union (EU) did put together legislation covering wireless spam, both choosing the 'opt-out' approach for internet and cell phone-based advertisements - which means that marketers could continue to send out wireless messages until one objected. This, complemented with direct marketing industry's self-imposed 'dos and don'ts', has given consumers in these countries the option to either opt-in or unsubscribe. While 'opt-in' or 'pull' based marketing is the approach in the US, the EU takes the more sanguine opt-out or 'push' route endorsed by their direct marketers association.
Rather than let the mobile operators act as guardians with their recent introduction of blanket blocking services, what is the way forward?
The solution before being consigned prematurely to the dust heap of marketing's tired and dumped (b4 prmturly consigng m mktg 2 dst heap of mktg's tried & dumped) is for marketers themselves to quickly adopt a code of practice like their counterparts elsewhere in the world.
This would be designed to rest on the principle of soft opt-in ie permission market to those whose details have been picked up in the course of a commercial interaction (not necessarily resulting in a sale) but at the same time giving them an option to exit any time.
This puts freedom of choice back where it belongs - in the consumers hand or fingertips in this case. They can then set the ground rules as to whether, whom and when to interact with. This approach would not only help promote the fledgling direct marketing industry by giving a fillip to mobile marketing and its potential for high RoI as compared to traditional direct marketing, but also protect ordinary consumers.
The alternative opt-out approach allows marketers to send unsolicited SMS to individuals from rented or ad hoc databases until they specifically object! Unfortunately the 'unsubscribe' option in a caller-pays mobile environment comes at a premium cost to the customer, as he would land up being billed for every 'Nay'!
*(The writer is a well known IT expert and Member, Indian Merchants Chamber National Technology Committee. The views expressed are his own.)

Let the mobile pay

Mobile shopping in India takes a bold leap forward with the deployment of the first SMS-based mobile payment service. ByProbir Roy, co founder Coruscant Tec.
Wireless has been one of the most quickly adopted technologies in the world, beating even internet adoption. More so in India where the wireless universe is perhaps more than fixed line phones, C&S, internet and radio. Certainly more than the last three combined. And by end 2007 – more than all of them combined.

Imagine a world where a single device can cater to your communication, entertainment, lifestyle and commercial needs. The proverbial 'third screen's has become the ubiquitous screen of first choice for most people – from just voice, the mobile device has evolved into a multi media and entertainment device, and now as a payment device.

Making transactions with the mobile device otherwise known as mobile payments has always been the ultimate dream for vendors, operators, service providers and financial institutions but has been ridden by many false starts and hype. Globally the industry has split over operator-controlled payments, in which content providers are paid an insignificant share of the sale price and more often than not with a delay of over 270 days.

Some claim that the operators, who tend to act more like 'banks' rather than payment facilitators, are indeed holding the industry back to the point of stagnation. Today we are on the cusp of yet another payment revolution – a heady cocktail of the simple and humble SMS paving the way for "one click" shopping and transaction. No GPRS, no new SIM card or fancy phone or indeed a paid and complicated multipoint registration process.

PayMate, recently launched by an Indian company, PayMate India Private Limited, an m-commerce venture funded by leading global VC Kleiner Perkins, has been developed to serve as a fast, efficient and secure method of conducting such commercial transactions. There are various projections as to the market size; recent numbers by the Informa Telecom & Media Group have estimated the m-payments market in 2006 at around $60 billion, which is estimated to rise up to $180 billion in a few years. Needless to say China, Japan and now India would be the geographical drivers.

PayMate is a cutting edge mobile payment solution that seemingly allows mobile subscribers to make payments for merchant services for travel, entertainment, lifestyle, and shopping, just by using their cell phones in real time. It is connected to merchants and banks to enable such transactions. Keeping in view the three principles upon which this is built - ease of use, convenience and security, the mobile phone and PayMate could soon eliminate the need to carry a heavy wallet with an array of credit cards and various plastics. The fear of disclosing valuable credit card and banking information is also eliminated.

The making of this product or rather translating this idea into reality has taken the best part of over two-and-half years. The last mile – involving months of testing, integration and preparation with partners such as Citibank, Euronet Worldwide and Rediff, have helped to arrive at what they feel is a product and framework for the deployment of a simple, secure, safe and interoperable m-payment system with tremendous potential in the Indian and global mobile commerce market.

Apparently this scale of deployment has not been attempted anywhere in the world. Mobile commerce has the potential for explosive growth and mobile payments are often touted as the next "killer application" for the mobile enterprise.

The famous David Ogilvy slogan of the '70's "Don't leave home without it" has never been so true… Or, perhaps, a slogan looking for a new home?

Indian tech moves up the value chain

Indian technology companies are not going to be just about services and labour arbitrage; they will become known for intellectual property and "productised" services.

It is a well-known fact that many of the world's great innovations have come from Asia. Inventions such as the compass, paper, as well as gunpowder and rockets were first invented in this part of the world. The first compass was invented in China 2,000 years ago and it took the West 1,000 years to start using it.
The Zero was 'invented' by Indian mathematician and astronomer Aryabhata in the 6th century but came into mainstream use in the West only much later.
It is small wonder then that the iconicRed Herring magazine chose Hong Kong as the ideal setting for recognising Asian ingenuity, feting 100 young technology companies with the prestigious Red Herring Top 100award for innovation, and the industry changing and disruptive nature of their technologies ('Oscars' for young technology companies). India and China dominated the winners list from over a few hundred companies that had sent in nominations.
India with 24 and China with 33 winning companies made their presenc felt; with India having moved beyond the usual IT services and BPO hoopla.
In an earlier piece in domain-b  in 2002, I had argued that India needed to move up the value chain and become innovation-centric, rather than be the world's favourite sweat shop.
It was clear that would not happen merely by scribing a few words, sitting back and waiting for it to happen. Something had to be done about it. That something was an innovation and a paradigm-shifting product idea for the global marketplace, and its subsequent successful commercialisation. Therefore, we did it in the eclectic area of wireless technology.
On checking with the publisher of Red Herring and 'Venture Professor' Yoshito Hori on the sidelines of the show, I was told that the US continues by far to be the leader in recognition of new ideas and businesses, while Japan (with an economy half that of the US) consumes one-twelfth the venture funds. Singapore, suprisingly, accounts for 10 times as much as Japan!
Clearly, the country that has led the consumer electronics revolution for the better part of two decades, is the least innovative, measured by successful new companies and ideas coming out from there. Essentially, that is because of its none-too-friendly entrepreneurship culture and an inbuilt fear of failure borne out of centuries of a rigid and stable society.
Contrast that to India, where the flow of funds chasing new ideas, business models and markets is running at four times that of Japan, and the current MBA programme at the elite Indian School Of Business, Hyderabad (ISB), has more than half of its students enrolled at courses at the School's Wadhwani Centre for Entrepreneurship Development (WCED)! Moreover, the recent TiE-ISB Summit had over 800 delegates drawn from across the Indian diaspora.
It's a very different scenario from just 20 years ago, when Indian entrepeneurship was the preserve of longstanding industrial families and state-run companies under a controlled Nehruvian model of economy. If one were to extrapolate for a moment, and hazard a guess as to the total Indian contribution in the Global Top 300 companies chosen by Red Herringacross Asia, Europe and the Americas this year, then perhaps a good one-third would have one!
So clearly, this is a punctuation point in our experiments with a free economy. We have a new entrepreneurial ecosystem evolving by way of business schools, IITs and some other leading institutes of technology, a few government laboratories and Indiaco (India's largest private incubator), all of whom are silently nurturing innovation, entrepreneurial activity, risk taking and fresh IPs. Coupled with its overall R&D cost advantage at one-eighth of that in Western countries and a large pool of intellectual resources, India is gaining respect as a potential breeding ground for innovation. All this without much hype.
Therefore, India is now not going to be just about services and labour arbitrage; it will become known for its intellectual property and productised services. Certainly, there is a long way to go before it catches up with Israel (for a country roughly around the size of Bangalore, it has the second-largest number of companies listed on the NASDAQ, and attracts twice the amount of venture funds as Europe), but it is already ahead of Japan!
The probability of an original business idea hitting $1 billion in revenues is one in 20,000 (29 NASDAQ listed companies have hit the magical $1-billion revenue mark). Clearly the stakes are high and loaded against the everyday Joe quickly striking gold.
Nevertheless, innovation will still come out of mavericks with high self-belief, skills, focus and a nurturing ecosystem, and not out of a plethora of associations, committees or commissions entrusted with 'stewarding' innovation. The latter constructs are better suited for building Brand India on the competitive advantage of the moment - IT, ITeS and BPO.
New paradigms will entail new mechanisms to catapult them into mainstream life. Old economy constructs, like soldiers, will fade away.

India Calling!

Forget the statistics and growth figures. There can be no quibbling with the highly visible end use benefits of the ongoing telecom revolution, writes Probir Roy, co founder, Coruscant Tec and Paymate.

If indeed anyone were to be cynical with ''India shining'' or ''10-per cent per annum growth'' slogans, then one area there would be no such quibble is acknowledgment of the impact of telecom on everyday life of the migrant labourer from Bangladesh, Nepal, interiors of rural India, the shoeshine boy in Haryana, fisherman in Kerala, you, me and the upscale corporate chieftain

The end use benefits of the ongoing telecom revolution (one-fifth of India is now digitally connected in some way) has clearly and quite visibly demonstrated increased economic growth and promoted market efficiency – all within a decade.

The classic documented case being a recent Harvard University study showing how the introduction of mobile phones amongst fishermen in Kerala has helped reduce fish catch wastage from 8 per cent to zero, increased profits for fishermen by 8 per cent and dropped prices by 4 per cent ! All because the ubiquitous cell phone now allows the fisherman to call the different landing points while he is still out at sea and take stock of the catch available for sale at each point and land his craft where he is reasonably certain of a better price. Higher profits mean that phones pay for themselves within two months.

Or take Celtel Mobiles''experience in the poorest regions of Africa where it employs more than 170,000 people. According to the Economist, its presence "creates ripple effects…which promote entrepreneurship and economic activity".

The conclusion, a chief economist''s dream, "Information makes markets work, and markets improve welfare"

If one were a keen observer of telecom growth in this country (as indeed I am) and used the barometer of seminars, conferences, roundtables, etc as an indicator as to how this sector has matured. Then one will find that predominantly telecom conferences, etc, have focused on infrastructure, scarce resource allocation, equipment and devices. In essence they have been vendor and engineering driven. And rightly so. The better part of the last decade has seen penetration of wireless and other related infrastructure literally dot the skyline and surrounding landscape by way of open conduits, ditches, dug up roads, sidewalks and unending haphazard criss cross of wires!

The next phase of the telecom revolution will now consist of three key drivers.

First, most of the time VAS has been the last token session or topic of the seminar or summit!

This has to and will change. VAS will become the most predominant revenue and margin driver for operator survival. There is now clear recognition within senior owners / managers that with commoditisation of voice and declining ARPUs (average revenue per user) all forms of VAS, whether it is office applications to consumer entertainment and interaction from the simple person-to-person SMS to interactive rich media and mobile payments will be the buffer in the short term and the cash cow in the long run (estimated to account for up to 60 per cent of operator revenues in next decade of growth).

Obviously the business rules for this will change and operators realise that they need to create an ecosystem of VAS partners like the NTT DoCoMo model (100,000+ partners) by not only sharing more revenue with them but also accruals in a more accurate and timely manner. This will help incentivise businesses to create desirable applicationss and content.

Ultimately carriers are not in the content or software business. They should it open it up to all others and will themselves see an explosion in services they will be able to offer to their increasing discerning users. The next killer application (after email and chat) in the digital space will emerge from within the suite of such VAS.

Second, the emergence of next generation networks and access devices whether they be wireline (IPTV / digital cable), wireless (WiMax / WiFi / Zigbee, HSDPA / LTE, UWB, NFC or satellite (DTH / DVB-HS) will once again change the rules of the game and give consumers a bewildering hodge podge of technology options as to how they talk, view, share, interact, search, shop and pay and enhance their sensory experience. The landscape of consumer choice and price will broaden penetration of telecom touching at some level most part of Indian households in the next five years.

Finally, the last big issue, which hitherto has been given short shrift, will be customer care, retention and overall quality of service at the end use touch points. This current format and culture still does not as yet hint to that but will need to programme itself.

Number portability opening up of more licenses and entry of new players including mmobile virtual network operator or MVNOs will necessitate carriers to differentiate themselves over and above the 4 P''s of marketing. This will be of great importance. The customer retention value is way below the customer acquisition cost in a hugely price sensitive market fragmented by many players and even more wannabees.

I have been a loyal, high value customer for my operator for 10 years, but would easily consider a shift if I can carry my number to another carrier and perception of benefits mitigates cost. Unless, of course I feel that I am being looked after adequately by my current carrier.

The author is vice chairman, Internet & Mobile Technical Committee of the non profit Media Research Users Council (MRUC), and Member, Indian Merchants Chambers Technology Committee.

Mobile Money

Sir, how would you like to pay – Cash, card or Phone?


Mobile Money can become the preferred payment method   says Probir Roy, Co Founder & Promoter, PayMate

There are four billion mobile phones today in the world. Three quarters lie in the hands of people in the developing world, and half of all additional growth is expected to come from China and India alone!

This ubiquitous availability is accelerating mobile phone use as a means for sending/receiving monies and paying bills, shopping, ticketing, recharge, etc. And in doing so boosting local economies in Sub Saharan Africa, Afghanistan, Iraq, Pakistan, Bangladesh, Sri Lanka and Nepal.

Typically the spread of new ideas and technologies follow a logistic curve. Popularly known as the S curve – defined by few early adopters, some   late, but bulk of users somewhere down the middle.

Invariably one can’t predict timing of that bulge, but for online ecommerce in India an inflexion happened around 2004. When Indian Railways’ IRCTC started their online booking in 2002 – instilling faith among Indians. And then in 2004, when low-fare carriers such as Air Deccan came in and people took another leap of faith and started using their credit cards.

What then about mobile banking & payments? Where are they on the S curve and what are the prospects?

Mobile Banking guidelines have been out since 2008. More than forty banks offer various mobile banking related services. The recent account to account fund transfer using mobile launched under the umbrella of the NPCI has given the space a boost. But both are a tad short on expectations.

The monthly volume of mobile banking related transations is some hundred thousands instead of tens of millions that it ought to be. Over ten million unique ID’s have been issued for fund transfer but number of transactions against those is just a few thousand!

Contrast that with the NEFT system which processes more than 14 million transactions a month!

Clearly we are still looking for that elusive early adopter base.

Resolution of a few simple issues will lead to a jump.

Firstly, regulatory dispensation has to be in essence forward-looking. In new market spaces today’s heresies become tomorrow’s doctrine, and accepted practice.

There is no evidence of any systemic risk arising from mobile, whether it is use of an app or sms or ivr. It is less than any other accredited retail financial instruments in play today!

Therefore putting in more hoops and loops for the consumer in terms of concomitant use of PIN, OTP, MMID, VBV, etc so early in the game are all proving far too onerous to the consumer. There are simpler mechanisms to ensure safety and security.

Secondly,   the move away from an application on a mobile or ‘app’ centric mindset, to encompass aam admi options of SMS and IVR.

The ‘app’ approach lends itself to being an elitist system for those who have the comfort of apps and gprs (graphical and touch intensive) and who are immune to bill shock. The proportion of people who can actually access, download, pay for data charges and then are comfortable using apps using Smartphone’s or feature phones is significantly lower than these already comfortable with voice or sms (fingers and voice) on an entry level phone.

Probably a few million at most instead of the hundreds of millions of lives it actually needs to touch. The latter is a mass phenomenon. And enables rapid electronification of the economy, and early onset of the bulge in the adoption curve.

Thirdly, network effects have to kick in. For a country of 1.17 billion with about 200 million cards – the penetration of the POS is woeful. Typically for a service to be considered mass (20 percent of population) the ratio of cards to pos should be 1:30. So in India we would need a base of about 6 million! Even if one just takes the credit card base of about 20 million, we should have about 600,000 POS. But we have half that number! Platform mediators have to more aggressively build out the two sided platform – connecting consumers to merchants, for aam admi to benefit.

Lastly, communication to public is critical. Achieving behavioral change whatever the perceived benefits is rarely that straightforward.

RBI has realized the merits of communication and awareness in its own activities and role.

Commercial Banks have not done much for mobile banking. If one looks at the approx 1500 crores of advertising by telcos annually, most of them have moved from explaining the features of their service to now how a mobile changes life, same for the handset device makers, as their communication moves from explaining features to functional benefits.

Airtel has done this well, with one set of communication with overarching brand theme across all businesses, and the other on enriching lives –  Madhavan and Vidya Balan ads for mobile payments being an example !

Currently mobile payments are poised to unleash its potential. Proof of stakeholder’s actions will finally determine when the number of transactions using mobile begins to hit the high notes. As the saying goes, you can’t make an omelet, without breaking an egg!