By:
Paul Leishman: November 30th, 2009
I recently had a conversation with Ben Farren, Director of Splash Mobile Money Ltd., to learn how Sierra Leone’s first mobile money deployment has been progressing since it launched 10 weeks ago. Splash is privately held and their model isn’t ‘led’ by a bank or a mobile operator. In launching the service Ben has developed a new brand, independent distribution network and partnerships with mobile operators.
Splash has agreements with the three largest MNOs which enable customers from these networks – representing about 90% of the market – to use the service. Currently focused on domestic money transfer, Splash enables customers to send money to anyone – regardless of which mobile network they use. Registration takes place at Splash agents or during one of the company’s planned registration campaigns.
Click to hear more about their model and progress.
By:
Paul Leishman: November 25th, 2009
Whenever a mobile money deployment announces customer numbers, the first question people typically ask is ‘yes, but how many of those customers are active’? It’s a fair question. Active user rates vary across deployments and have an enormous impact on profitability. Analysis of different markets has revealed three broad challenges that deployments face when it comes to active rates. The first two challenges involve persuading customers to perform an acceptable number of transactions. If these challenges aren’t quickly and adequately addressed, they spawn a third, equally troublesome challenge: out of practice, unsatisfied agents.
So how are deployments addressing these challenges?
By:
Seema Desai: November 18th, 2009
The Mobile Money for the Unbanked Programme has awarded grants to AKTEL in Bangladesh, Dialog Telekom PLC in Sri Lanka, Grameenphone Ltd in Bangladesh, MTN Cameroon, MTN Uganda and Vodacom Tanzania. This is in addition to the grants that were already announced in October, to SMART, AXIS, Roshan and Oi. The funding from MMU will serve to accelerate these deployments, and the learnings will be shared by the Programme with the wider industry in order to accelerate other deployments around the world. Funding is still available for operators to apply for – if you are interested in finding out more about the Fund, please contact Seema Desai, sdesai@gsm.org.
More information on each grantee after the jump.
By:
Neil Davidson: November 15th, 2009
A few posts ago, I asked you to think about how much you would have been willing to pay for the very first fax machine had you been given the option to buy it. I argued that, absent any foreknowledge about how popular fax machines were going to become, you would have very little interest in acquiring a complicated but useless contraption -useless, because you couldn’t send faxes to anyone and no one could send them to you.
But what if you did have a suspicion that fax machines were going to become hugely popular, and that they would become indispensible tools for doing business through the early 2000s (when they started to be displaced by the wide availability of scanners, printers, and internet access)? Quite naturally, you would then be more interested in owning one.
This introduces an important wrinkle to the definition of network effects that I gave earlier. In networks with positive network effects, potential users’ interest in joining the network increases not with the size of the network, but rather with their perception of the size of the network and their expectations about its size in the future.
How can operators influence the perception of the size of their network?
By:
Neil Davidson: November 12th, 2009
My last couple of posts might have been a bit discouraging, particularly if you’re a shareholder of a mobile network operator that’s trying to roll out mobile money. The idea of deferring profitability for years, in the hope that you’ll sign up enough users to become a sufficiently valuable network to justify price increases at some undetermined point in the future, will strike many as excessively risky.
The good news is that by carefully crafting a value proposition and a marketing and communications plan, mobile money service providers can dramatically increase the odds that they will build a successful mobile money platform. They can do this with a nuanced understanding of the way that network effects in mobile money work…
By:
Neil Davidson: November 11th, 2009
In my last post, I said that network effects are apparent when the users of a given network care about how many other users are in the same network. Put more formally, this means that willingness to pay for access to a network is a function of how many other users are on the network. If thirty years ago someone had offered to sell you the very first fax machine in the world, you—absent the ability to foresee the future—would probably have been willing to spend next to nothing for it, because owning the only fax machine in the world would be pointless. Fifteen years ago, however, once fax machines had proliferated widely, you would probably be willing to spend substantially more, since the large number of other machine owners would make it quite a useful piece of technology.
Understanding that network effects, value, and price are closely related suggests an important strategy for avoiding the penguin problem: subsidize early adopters…
By:
Neil Davidson: November 10th, 2009
It’s often said that mobile money is a brand new business model. Neither traditional value-added services offered by mobile network operators nor financial services offered by bricks-and mortar-banks are very helpful as models when trying to think through the economics of mobile money or the strategic dynamics that govern the industry.
But we do have some clues about how mobile money markets will evolve. Mobile network operators and other providers that offer mobile money services are, structurally speaking, offering platforms that allow users to interact with each other, forming a network. And it turns out that such platform-mediated networks are plentiful in our world. To take an example that’s close at hand, Microsoft Word, which I’m using to type this paragraph, is a platform, created (and monetised) by Microsoft, that allows me to share documents with any other user in the world who also has Word installed. Analogously, a mobile money service like M-PESA in Kenya is a platform which allows users to transact financially with each other.
Why is this important? Well, platform-mediated networks behave in surprising ways. Sometimes they grow explosively; other times—as network operators and banks in many markets have learned—it can be tough to generate substantial customer adoption of mobile money services.
That’s in part because the growth, or stagnation, of platform-mediated networks is affected by network effects….
By:
Paul Leishman: November 4th, 2009
The following case study offers a comprehensive view into the regulation, service, and ecosystem design that has led to the current state of play for mobile money in the Philippines. To be sure, the market is one of the most advanced in the world, but in recent months the limelight has gone mostly to the runaway hit that is M-PESA.
Mobile money success has materialized in the Philippines – but compared with Kenya it’s come more gradually and to a more measured degree. We won’t compare the two markets in this case study, but one point worth highlighting is the different approaches taken in each market to building a distribution network….
