The mobile money industry has grown massively since MMU launched in 2009; back then, there were fewer than 20 mobile money deployments in the world, and today, there are more than 100. MMU has played an important role in identifying lessons and best practices, which we’ve shared via case studies, toolkits, handbooks, webinars, Working Groups and field visits. We’ve provided crucial support, both commercial and regulatory, to several mobile money deployments around the world.

Despite these developments, the full potential of mobile money for financial inclusion is yet to be realized, since most mobile money deployments which have launched are not yet operating sustainably and at scale. There are four main barriers that we see facing deployments today:-

• Operational hurdles – Several important mobile money best-practices have been identified but have not been consistently replicated throughout the industry. There is still work to be done on market segmentation, customer activation and agent network development before more mobile money deployments reach scale
• Regulatory barriers – In a number of markets, regulatory issues are limiting the commercial viability of deployments, such as onerous customer registration / KYC (“know your customer”) licensing requirements, e-money, agent regulation
• Inadequate investment – As margin pressures have been increasing on MNOs’ core business, the number of proof-points for mobile money as a profitable business is still too low; therefore, MNOs still perceive mobile money as risky relative to other investment areas, and often fail to allocate sufficient investment towards deployments
• Learning gaps – As a young industry, the mobile money sector still has a lot to learn, and there are still areas where best practices have not yet been defined, e.g. new product development, or how to interoperate more effectively among different ecosystem players

With the support of its donors, MMU will help the industry to respond to these challenges.  To help overcome operational hurdles, MMU will devote more resources to creating and extracting relevant lessons from mobile money deployments. MMU will use methods of sharing knowledge which have already worked well, while also trialling new ways to embed best practices across the industry. Building on from MMU’s recent publication about MNO-MNO interconnection, we will soon kick off new research to look at the technical and commercial feasibility of linkages between mobile payment platforms and financial institutions, or other potential “bulk users” of mobile payment platforms. MMU is also working on mobile money regulation, helping MNOs to engage with their financial regulators to create more enabling regulatory environments, as well as promoting the role of mobile money for financial inclusion among international standard setters.

With a strong legacy behind us, MMU stands on the cusp of a new phase, with new donor partners, a bigger team and more opportunities to engage more deeply with deployments. Since the start of this year, MMU has recruited two new MMU Managers, Lara Gilman and Phil Levin, as well as our new Regulatory Director, Simone di Castri. As we continue to grow the team, MMU will be able to work with more deployments in more markets, and have an even greater impact towards creating more sustainable, scaled mobile money deployments which serve the unbanked. These are indeed exciting times for MMU and for the industry, and we look forward to working with you, and sharing what we learn over the next three years.

The service providers in our sample reported having 60 million customers as of June 2011, a number which excludes customers who transact “over the counter” without having registered. Eleven services reported having more than 1 million registered customers in June 2011; together, these eleven services accounted for 85% of the registered customers reported in our survey, with a long tail of 41 services reporting the other 15%.

Figure 1: Number of registered customer accounts by service, June 2011

Of these customers, only 6 million were considered active, although since Safaricom and SMART declined to provide the number of active users of M-PESA and SMART Money, this number understates the true total. Only two deployments reported more than 1 million active customers.

How should we interpret these numbers? On the one hand, they fall far short of recent estimates of the size of the global mobile money user base. Berg Insight reckoned that there were 133 million mobile money users in emerging markets in 2010, for example. It is also sobering that a small number of deployments have signed up the majority of mobile money customers, with the remainder struggling to achieve any meaningful scale—scale which is obligatory if the mobile money business model is to be sustainable.

On the other hand, our survey also revealed very rapid growth in the number of mobile money customers—and especially, in the number of active mobile money customers—around the world. Between the beginning and the middle of 2011, the annual growth rates for the number of registered and active users were 49% and 86% respectively. Even compared to the mobile industry overall, itself a high-growth industry, this is very rapid growth.

Download the full report here. In our next post, we’ll dig deeper into the widely divergent fortunes of different operators in mobile money.

Watch the interview with Maarten Boute, CEO of Digicel Haiti and Isaac Nsereko, CMO of MTN Uganda who candidly share the challenges they have faced in building mobile money services.

• What was the business case to launch mobile money from the C-level perspective?
• What are the battles that take place at the C-level to decide how to allocate resources to mobile money services?
• How are resource allocation battles won for mobile money?
• What is your perspective on the right organizational structure for mobile money?
• What could have been done differently? What are the lessons learned?
• What is the time frame to achieve success in mobile money?
• What is the most difficult challenge mobile money poses to the C level executive?
• What advice would you give to mobile money managers when dealing with their C-Level team?

MMU: Establishing partnerships is key to the successful deployment of MFS. Across various markets Orange has adopted different strategies when it comes to bank-partners.  In your opinion what are the lessons that have emerged from these partnerships and what can regulators learn from these?

FB: There are currently two types of partnerships.   The one we currently have with Equity Bank in Kenya and all the rest.  Our group vision is to partner with banks as a way to adhere to compliance regulation and for e-money issuance.  Like in any business, time has taught us that partnerships are not stagnant entities but that they can and should evolve.  This can happen in a variety of ways, like making the bank partnership (or with several banks) evolve towards more business activities, like their participation in distribution and liquidity management, and partnerships for the creation of second generation mobile financial products such as insurance, savings and credit.

MMU: What opportunity does Orange see in regional remittances corridors as drivers for adoption given the West African Economic and Monetary Union’s (WAEMU) integration?

FB: Regional and international money transfers are an attractive opportunity.  It is tempting to use these regional flows as drivers to mobile money adoption in countries such as Mali and Senegal. However, there are still regulatory issues which need to be addressed before this becomes a reality, such as the kind of KYC required for the receiver.  For Orange, there are many services which can be provided over the mobile platform but at the moment we need to prioritize the ones our target market demands and needs.  Once we have a very large active base, we‘ll move towards regional remittances and other services. We are taking a gradual approach to building the payments ecosystem.

MMU: The mobile market in Africa and MENA is very different compared to other regions. Customers are generally younger and often less well off.  As the industry moves towards more sophisticated products focused on financial inclusion, experts agree than the cost of p2p transfers for micropayments is still too high.  (e.g. microloan repayments, m-insurance premiums, etc.).  How does Orange plan to tackle this issue?

FB: I think we needed to start, first by considering what customers and potential customers were paying to perform some of these operations by looking at current alternatives for money transfer and the pain points involved in terms of time spent travelling to the service points.

As the industry evolves, we are starting to see that the business model for this second generation of products is different and we are working on it.

MMU: Can you tell us about the reasons behind the success of Madagascar?

FB:  The success of Madagascar rests upon a clear and simple strategy. It starts with good communications with our customers.  There is a great team on the ground helping guide customers through their journey from awareness to habitual use. Customers have really understood what the service is about and this has been complimented by a well-oiled distribution network.  In addition, customer support has also been a key contributor to the success of this deployment. We have trained Orange staff, which calls back customers in case there are any issues ensuring they are able to take that first yet essential step in the customer journey. Orange Madagascar has also been creative and pragmatic and launched a remuneration (around 5% of deposits) for all Orange Money accounts – which is a “world première”.

But the main key success factor is probably the commitment of the management team and of all people within Orange Madagascar.

This is the second post of a two-part series looking at an Oxford University study on the use of mobile money to pay for water services in Africa.

Mobile money payments have the potential to make paying for water a much less burdensome task by nearly eliminating travel to and waiting at congested pay points. Such consumer convenience benefits could improve bill collection efficiency and support wider sustainability in delivering water services. A recent study across Kenya, Tanzania, Uganda and Zambia indicates significant potential but highly uneven performance to date, which was introduced in the first blog and is considered here in relation to mobile network operator (MNO) benefits.

MNOs play an important role in the development and uptake of mobile water payment deployments. In many cases they are the instigators of the option and approach the water service providers. MNOs often hold the upper hand in negotiating the size of customer transaction tariffs, which can be an important factor of adoption. Customers will only switch to mobile payments if the value of using them is greater than the costs of making cash payments. Thus, assessing these companies’ motives and benefits is important to understanding the future of mobile water payments.

MNOs benefit from mobile water payments in two possible ways, as is the case for most applications of mobile money: either through direct profit from fees, or through increased subscribership and reduced customer churn.

Yet in comparison to other mobile money uses, mobile water payments could potentially bring more lucrative MNO payoffs through these. The vital nature of water means payments for it are recurring and regular, offering MNOs a way to become customers’ default SIM card for guaranteed transactions. In this sense they are a good answer to mobile money’s “volume problem”.[1]

Furthermore, intensifying efforts to increase water access for meeting the 2015 Millennium Development Goal, paired with growing opportunities and expectations of “ICT4D” solutions, is driving mobile innovations for improving and expanding water services. For example, in Dar es Salaam, GPRS-enabled water pay points are an alternative payment innovation. Rural mobile payment options are also emerging, such as the Grundfos LIFELINK system in several Kenyan communities that uses M-PESA payments. Beyond payment innovations there are possible markets within other mobile tools: water point surveying applications, which work on networks where available (e.g. Water for People’s FLOW), SMS notification services for water availability (e.g. NextDrop), and attempts at crowd-sourcing via SMS reporting of infrastructure problems (e.g. Maji Matone and the Human Sensor Web). These suggest that basic mobile water payments may just be one of several emerging innovations for MNOs to capitalise on water sector opportunities, though for most, it’s too early to tell how profitable they may be.

The following highlights key findings on the current reality and extent of MNO benefits (direct and indirect) from mobile water payments.

Looking firstly at direct revenue benefits: The MNO fee on mobile water payments is either paid by customers, water utilities, or shared between them. The amount also varies depending on the arrangement: it can be fixed (flat fee for any bill amount), stepped (applied to tiered bands of bill amounts), or a percentage of the bill amount.

This means MNOs take in different amounts in each scenario. For an average-sized water bill paid by mobile money, Safaricom in Kenya would receive USD 0.30, Vodacom would earn USD 0.64 for bills paid in Dar es Salaam, and MTN in Uganda would earn USD 0.09.

Yet net MNO profits are complicated by cash-in/cash-out functions associated with deposits and agent fees. In Tanzania, where a third-party developed the service by integrating MNO and utility systems, the MNO loses some of the revenue to paying the third-party. Figure 1 illustrates this, and it shows how a customer making a cash deposit for mobile money to be used solely for water payment may leave some MNOs without profit, or potentially losing money. Indeed for MTN in Uganda, where USD 300,000 worth of water bills are paid by mobile each month, the revenue generated through facilitation of water bill payments amounts to less than one percent of mobile money profits, which itself brings in less than five percent of total revenue. Similarly, mobile water payments in Dar es Salaam bring in less than one percent of monthly revenue for Airtel and Vodacom. Nonetheless, direct revenue was still identified as a key motivation by some MNOs including MTN in Uganda and Airtel in Zambia.

Figure 1: Estimated MNO profit margin for average mobile water bill payment (USD)

In contrast, some MNOs recognise potentially slim profit margins, and instead view mobile water payments primarily as an opportunity to win new customers and keep current ones (and ultimately have them use higher margin services). Customer loyalty can have a high value for MNOs  – for example, 33% of MTN’s mobile money revenue in Uganda was attributed to a reduction in customer churn.[2] Water payments may be particularly valuable in this capacity as they are essential and recurring transactions. Indeed, Vodacom and Airtel considered this benefit of mobile water payments in Tanzania to be of greater value than direct revenue.

Whether MNOs pursue profits from direct revenue or reduced churn depends in large part on the degree of competition, and it plays out in the customer fee. Across the cases studied, customers are paying widely different fees on mobile water payments, especially when considered as a proportion of average bill sizes (see Figure 2). In Kenya, where Safaricom dominates the market, fees are the highest, amounting to 12.3% of typical bills for Nairobi customers. This relatively high fee may outweigh the value of convenience from mobile payments, especially if making cash payments is not very costly (e.g. in urban areas, a high density of pay-points mean minimal travel time).

Figure 2: Kenyan customers paying water bills via mobile money incur the highest charges in the region.

As expected, some MNOs are dropping these fees to compete more aggressively for customers. Free payment options are offered by Vodacom in Dar es Salaam, and more recently by Airtel in Lusaka and Nairobi. This typically requires water service providers to cover a greater proportion of MNO fees, (as is the case in Tanzania and Zambia), believing it will promote adoption for increased collection and efficiency savings. Water regulators have an influence here too; Zambia’s regulator has prohibited utilities from directly passing on costs of mobile payments to customers.

It is too early to determine the impact of free Airtel bill payments in Lusaka and Nairobi, as both deployments were launched during the course of this study. In Dar es Salaam less than one percent of water utility customers have switched to mobile payments, which Vodacom has offered free since early 2009, with adoption levels constrained by an array of barriers (as identified in the previous post).

These findings and those highlighted in the previous blogpost show overall important potential benefits for all stakeholders- water users, service providers, and MNOs, but the reality of benefits at this point, is unclear.  The commercial motives of MNOs drive a very important piece of the puzzle- as they partly determine customer tariffs and are often the instigator for mobile water payment options. Yet even where MNO competition is leading to lowered customer fees, it is uncertain if this will outweigh other barriers of adopting mobile water payments. What is clear is that there is a need for serious consideration of contexts, operational constraints and behaviours- jointly by MNOs and water service providers (and regulators) for both parties to maximise the benefits from this tool. These wider issues are just as crucial to greater MNO benefits as they are to improving water provision. And with mobile innovations emerging beyond mobile water payments, MNOs may find new markets and opportunities from engaging more with the water sector.

-Written by Ilana Cohen, research team and report authors include Tim Foster, Aaron Krolikowski and Rob Hope.

Read the first post of this two-part series here.

[2] GSMA. (2011) Mobile Money for the Unbanked: Annual Report. London: GSMA Association.

Today the MMU team is releasing a new article that features perhaps our longest title ever: “The case for interoperability: assessing the value that interconnection of mobile money services would create for customers and operators”. The focus of our article is domestic mobile money interconnection, by which we mean two or more mobile money providers in a single country interconnecting their respective platforms to enable a customer affiliated with one service to send money from his account to the account of a customer affiliated with another service.

In this article we attempt to answer two fundamental questions: will interoperability create value for customers? And will interoperability create value for mobile operators? In this article, we argue that the answers to these questions are not obviously ‘yes’.

You can download a copy here, and we invite you to share your comments below.

The following is a guest post we’re pleased to share by Ilana Cohen, Tim Foster, Aaron Krolikowski and Rob Hope from the Water Science, Policy and Management programme at Oxford University.

mobile money in Africa offers a promising tool for one of the most enduring and widespread challenges on the continent: the provision of safe water.

The scale of the challenge (and the opportunity) can be seen in the fact that the number of mobile phone subscriptions will exceed the number of people with access to safe drinking water by 2013. At the same time, emerging mobile money options to pay for water services have the potential to increase revenue collection, which is needed for service providers to improve and expand access to water services. On the commercial side, this represents a market in which mobile network operators (MNOs) can potentially build or retain customers to boost transaction volumes, based on regular water consumption patterns.

A research group from Oxford University has evaluated such benefits from mobile water payments in a study of 20 different water service providers across Kenya, Tanzania, Uganda and Zambia. You can read the full report here, and key findings are summarised in two blog posts:

This first post explains the potential value of mobile money to the water sector, and highlights findings of benefits for customers and water service provider (WSPs), with challenges in customer adoption. The second post relates this to commercial interests of MNOs offering mobile water payments.

What mobile money could mean to the water sector’s revenue challenge.

For the water sector in many African countries, mobile money speaks to the key challenge of revenue collection that leaves USD 500 million uncollected a year (equivalent to 0.07% of the continent’s GDP).[i] Poor revenue collection is partly responsible for the fact that 67 million more Africans are without access to safe water in 2008, than in 1990. Infrastructure has simply not kept pace with rapidly growing populations and urbanisation. Unpaid customer bills – averaging up to 40% even among wealthier customers[ii] – cut into operations and maintenance budgets catalysing a vicious cycle of declining services. Such non-payment is unsurprisingly common considering the onerous time and money costs water users usually face when travelling and waiting to make cash payments at limited pay points in underdeveloped regions.

Mobile water payments can potentially bypass these obstacles of cash payments. If the ease of remote payments can enable more timely payments, increased revenue collection should help provide the re-investment needed to improve and expand water services.

Mobile water payments may also be an important tool for those with low or variable incomes, or the unbanked. Mobile money provides a more accessible savings mechanism, and greater flexibility and convenience for making smaller, more frequent payments. For WSPs, mobile payments may reduce administrative costs, or improve accounting of smaller utilities lacking digitised billing systems.

Strong potential benefits and understanding customer adoption

The findings indicate mobile water payments can bring significant customer benefits from time and money savings, and financial benefits to utilities, though customer adoption of mobile payments has been limited in most instances investigated, due to contextual challenges.

The majority of water service providers investigated have one to ten percent of their customers paying via mobile payments (See Figure 1). Uganda’s National Water and Sewerage Corporation leads this pack with 20,000 (10%) of its customers paying USD300,000 per month in mobile payments. The exception to this group is a small-scale and private service provider in Kiamumbi, Kenya (15 km outside Nairobi) with a 76% adoption rate.

Figure 1: Key mobile water payment options across the four countries, and their low adoption rates, with the exception of Kiamumbi.

A household survey was conducted in Kiamumbi to assess customer benefits of mobile payments and understand the motivations, and potential barriers to adopting them. Though Kiamumbi and its piped water network are small (nearly 700 connections and 1,000 households), prior to the mobile payment option, customers could only pay by bank deposit. Yet trips to the nearest bank, 4 km away, can require significant time (66 minutes on average for travel and queuing), and money (USD 0.40 for those who take the bus). In comparison, mobile payments provide an 82% time-savings, requiring only 12 minutes on average (where time is sometimes spent topping up at the agent). And the USD 0.20 fee for the mobile payment is half of the cost for the bus trip[iii].

Unsurprisingly, time-savings was the primary reason respondents chose the mobile option, followed by cost-savings (see Figure 2). In contrast, those not switching to mobile payments cited having to make bank trips anyway or not knowing about the option or how to use it. Some households simply didn’t trust the mobile payments, and the absence of paper receipts was another barrier identified by five percent of respondents.

Figure 2: Time and cost associated with bank trip are key drivers of mobile water payment adoption in Kiamumbi.

The other WSPs investigated hypothesized similar reasons why few of their customers had made the switch to mobile. Currently, limited advertising campaigns have failed to increase customer awareness of the option in several instances. Across all scenarios, demand for paper proof of payment has been a likely barrier to adoption.

Two other key adoption barriers are delayed account reconciliation, and the customer fee for mobile payments. In Kenya, some mobile payments options are not integrated in real-time with utility billing systems, causing accidental water disconnections when payments are made at the deadline. Though utilities have mostly addressed this by delaying the generation of disconnection lists, this initial problem may have impacted customer trust in the mobile option.

The fact that Kiamumbi’s adoption rate was still far higher suggests the barriers in these larger service contexts are greater and more complex. (See the full report for other reasons Kiamumbi’s adoption may be higher.) For example, in large urban areas, frequent pay points may make the time-savings of mobile payments less valuable. This could be the case in Dar es Salaam, where a third-party company offers GPRS-enabled points-of-sale at many city-wide locations.

The cost of the mobile transaction may be another barrier to adoption when it exceeds the costs of traditional payment methods or is very high relative to the total billed amount. This could be a particular disincentive for low-income households who might otherwise use mobile payments to pay in more frequent smaller instalments. The variation in this fee across the study, and how it relates to MNO benefits, is considered further in the following post.

Potential benefits to water service providers and the outlook for mobile water payments

Given low water payment adoption rates, there have been limited benefits for WSP collection rates. However, some have identified cost savings related to bill handling and timelier collection of bills: Uganda’s national provider anticipated savings of USD 420,000 per year from reduced insurance and handling costs, after closing payment offices (though payments can still be made at banks) and enabling mobile payments.

WSPs anticipate further savings if mobile payments can reduce accounting errors, and some say they are seeing fewer disconnections attributed to non-payment. In Kiamumbi, billing records show mobile water payments are 10% more likely to be paid on time compared to bank payments. Though proving a definite causal connection is difficult, customers in Kiamumbi do feel mobile payments are improving their ability to pay: half feel less likely to be disconnected since using them, and one in four feel better able to save for water bills.

On the whole, these findings reveal there is strong potential for mobile water payments to benefit customers, providers, and eventually increase water access as providers reinvest greater revenue. However, the evidence shows the current scale of benefits is limited, where operational and behavioural constraints are barriers to adoption. Mobile money can be an important tool in addressing water sector challenges, but ultimately the scale of its impact depends on understanding and addressing these constraints, and the surrounding institutional and regulatory contexts.

Interestingly, MNOs appear to be one driving force behind mobile payments as they compete for more customers in emerging markets, and have in some cases instigated negotiations with water service providers for a mobile payment option. The next post will consider how this dynamic around MNO benefits is playing out in mobile water payments.

If you are attending MWC in Barcelona next week, make sure to join us for a panel on the subject on Monday 27^th February from 14.00-15.00 (Hall 5, Room 2)

Smart Metering for Better Access to Energy and Water in the Developing

In this session we hope to investigate how mobile operators can get involved in this smart metering opportunity. Even though the market is still nascent, mobile operators stand to benefit directly from increased ARPU and customer retention. The increased mobile phone penetration and the decreased cost of cellular components are spurring innovation from vendors to develop solutions for a better access to energy and water services in developing countries. Several projects in Africa and Asia have been launched in recent months using smart meters (based on GSM technology) to allow consumers to ‘pay as you go’ for energy and/or water the same way they would top up for mobile airtime. We hope that such innovations will also catalyse further socio-economic development for these communities.

[i] Banerjee and Morella. (2011) Africa’s Water and Sanitation Infrastructure: Access, Affordability and Alternatives. The international Bank for Reconstruction and Development/The World Bank: Washington DC.

[ii] Banerjee et al. (2008) Access, Affordability and Alternatives: Modern Infrastructure Services in Africa. Africa Infrastructure Country Diagnostic. The international Bank for Reconstruction and Development/The World Bank: Washington DC.

[iii] Note that these are raw costs, where the averages presented in the full report consider the complexities of multiple transport modes.

“With more than 60,000 attendees expected in Barcelona, Mobile World Congress 2012 is shaping up to be the most exciting edition yet,” said Michael O’Hara, Chief Marketing Officer, GSMA.  “With an unparalleled list of executives in the conference programme, and with new and varied companies, such as Carphone Warehouse, Citibank, eBay, Facebook, Ford and MTV, taking part in other areas of the event, it’s clear that Mobile World Congress is the must-attend mobile event of the year. We’re looking forward to a great show.”

New Speakers at Mobile World Congress
The GSMA announced that Santiago Fernández Valbuena, Chairman and CEO, Telefónica Latin America, will be speaking in the Mobile World Congress keynote programme, in a session focusing on mobile operator strategies in developing markets. The GSMA also announced that Bret Taylor, CTO of Facebook, will be presenting in a special Mobile World Live Extra session, kicking off the “Mobile Application” conference track at the Mobile World Congress conference.  This session will be held on Monday, 27 February and will be broadcast over the Internet and on Mobile World Live TV.

In addition to the keynote programme, the 2012 conference will also include dedicated tracks on applications, cloud computing, embedded mobile, mobile advertising, mobile health, mobile money, next-generation technologies and OSS/BSS, as well as sessions exploring business strategy, developing markets, devices, network capacity, regional issues and social media, among other subjects. The GSMA has partnered with the TM Forum to develop the “Business Transformation” conference track on Monday, 27 February, and with the NGMN Alliance to develop the “Technology Evolution” sessions taking place on Thursday, 1 March.

For the list of keynote speakers, as well as complete information on the four-day conference programme, please go to http://www.mobileworldcongress.com/conference/.

New Participants in mPowered Brands Programme
Introduced for Mobile World Congress 2012, the mPowered Brands Programme provides an indispensible opportunity for professionals across the mobile marketing ecosystem to gain important and timely insights, practical knowledge and innovative solutions from the companies at the forefront of mobile marketing today.

A key element of the mPowered Brands Programme are the mPowered Brands Theatres, providing an environment for marketers, ad agencies, media companies and advertising technology companies to host clients and prospects and provide company and solutions updates, product and service demonstrations, case studies and workshops related to mobile marketing. mPowered Brands Theatre sessions at Mobile World Congress include:

• “Decoding the Future of Mobile Marketing and Enterprise Mobility” presented by Exicon in partnership with HP and Intel
• “Targeting the Women’s Segment in Emerging Markets” presented by the GSMA mWomen Programme with Qualcomm’s Wireless Reach™ Initiative and AusAID
• “McCann on the Mobile Economy” presented by McCann Worldgroup
• “The Future of the Social-Location Revolution” presented by Mobile-Loco in partnership with Nokia
• “An Uncommon Sense of the Consumer” presented by Nielsen
• “China: The Land of Opportunity” presented by the Shanghai International Film Festival

The mPowered Brands Programme also features the mPowered Brands Open Forum, an information sharing platform designed to bring together leading marketing companies with Mobile World Congress attendees. The Open Forum consists of six mobile marketing and advertising industry-oriented sessions delivered by representatives from Acision, ADTECH, comScore, Google Advertising, mCRUMBS, Microsoft Advertising and Soli. For more on the mPowered Brands Programme, please visit http://www.mobileworldcongress.com/mpoweredbrands-overview.

App Planet to Host ADCs by IBM and developerprogram.com

App Planet, the award-winning, developer community-focused “event within an event”, allows attendees to explore the many dimensions of the ever-changing and critically important mobile apps market. The GSMA announced that IBM will hold an application developer conference (ADC) on Wednesday, 29 February and that developerprogram.com will run an ADC on Monday, 27 February.  Other App Planet partners include IMGA, Nokia, Research in Motion, Samsung and Wireless Industry Partnership (WIP). The Generalitat de Catalunya is the sponsor of App Planet. For more information on App Planet, please visit www.mobileworldcongress.com/appplanet.

Cloudmark Joins as Gold Sponsor for Mobile Security Forum

The GSMA announced a new partner in its Forum Series, a sponsored programme which brings together industry players to discuss and debate a range of topics in focused sessions.

Cloudmark recently signed on as a Gold Sponsor in the Mobile Security Forum, alongside AdaptiveMobile, Norton by Symantec and Trend Micro.  The sponsor for the Augmented Reality Forum is Khronos Group; sponsors for the LTE Forum include NEC, Openwave and ZTE; and sponsors for the Mobile Cloud Forum are Cisco and NEC.  Additionally, the Global TD-LTE Initiative (GTI) will hold its LTE TDD/FDD International Summit as part of the Forum Series at Mobile World Congress.  For more information on the Forum Series, please visit http://www.mobileworldcongress.com/forum-series.

GSMA Holds First Youth Programme at Mobile World Congress

For the first time at Mobile World Congress, the GSMA will be running a Mobile Youth Congress, a programme that will demonstrate to students how mobile can transform their lives, particularly in the area of education. Approximately 100 teenage students from Barcelona will participate in half-day sessions on Tuesday, 28 February and Wednesday, 29 February. The students will hear presentations from the GSMA and the iSchool Initiative, introducing them to the mobile industry and outlining innovative and productive uses of mobile technology. Following the presentations, the students will take a guided tour of the exhibition to experience the Mobile World Congress first-hand.  

For more information on Mobile World Congress 2012, including details on how to attend, exhibit or sponsor, please visit www.mobileworldcongress.com.

The Mobile World Congress is the cornerstone of the Mobile World Capital Barcelona from 2012 to 2018. The Mobile World Capital also includes the Mobile World Centre and the Mobile World Festival, programmes and activities that will span the entire year and will benefit not only the citizens of Barcelona, Catalonia and Spain, but also the worldwide mobile industry. For more information on the Mobile World Capital, please visit www.mobileworldcapital.com.

The following is a guest post we’re pleased to share by Hystra Consulting and Ashoka.

A recent study reveals how Information and Communication Technology (ICT) can viably provide access to education, healthcare, agro-services and financial services to the Base of the Pyramid (BoP). The study reviewed more than 280 initiatives set up by various types of actors (corporations, Citizen Sector Organizations, social entrepreneurs…) in Asia, Latin America and Africa which are using ICTs to provide services to the BoP. Hystra, a French consulting firm and its partner Ashoka evaluated the projects based on their ability to solve a problem, their scalability and their financial sustainability.  The report presents 15 of the most ground breaking market-based business models, which have reached a significant level of scale and have improved the living standards of the BoP using ICTs.

Financial sustainability varies across sectors, financial services being the most mature of the four areas studied.

3 of the projects featured as financial services case studies in the report serve profitably more than 5 million customers each via different business models: M-PESA in Kenya with mobile money, Bradesco in Brazil with branchless banking via post offices and small retail shops, and FINO in India with a suite of POS-powered financial services available to over 40 million clients via door-to-door agents.[1]

Why are financial services the most developed area in terms of business model sustainability? One of the reasons cited is the willingness of clients to pay upfront for the service, because it offers them immediate savings compared to previous practices (such as cheaper money transfers).  Moreover ICT-based financial services often go well beyond previous offerings, creating new practices for unbanked populations such as savings or insurance schemes that lower their vulnerability to adverse events. For example, some MNOs have developed innovative loyalty-based life insurance covers. These types of products help reduce churn and attract new customers for MNOs while providing a new valuable service to customers.

Establishing trust in the service is a key factor of success for ICT-based financial services, as they deal directly with people’s money. These services require robust and secured platforms, in addition to trusted agents who are able to sell the service, manage liquidity and provide a direct interface between the technology platform and end-users. Leveraging existing trusted networks such as Safaricom’s airtime resellers (in the case of M-PESA) or post office agents (in the case of Bradesco) appears as an effective way to create trust in these services.

The business models studied in the report tap into multiple revenue sources, getting commissions from governments for g2p payments, banks and insurance companies for the opening of new accounts, end-users for the transactions they perform, and MNOs which benefit from customer retention and higher end-users fees. Governments can actually play a large role in promoting such services: using them for their G2P payments, they can be a sufficiently large first client of ICT-based financial services to justify the initial investment in the technology that new companies entering this space need to make – one of the first services offered by FINO was G2P payments and state health insurance, for example.  Many actors have tried – with mitigated success – to replicate M-PESA. However, the study points out to a wider range of models which can be just as effective in providing financial services using ICT. The key is to find which business model is suitable in each local context.

The study was sponsored by AFD, Ericsson, France Telecom-Orange, ICCO and TNO and conducted by Hystra and Ashoka. The full report is available for download  in the MMU library.

[1] The number of FINO clients stood at “only” 28 million when the case study was done in February 2011, but FINO grows by over a million customers each month!

To understand more about Orange’s overall strategy, I recently caught up with Frederic Blehaut, Group Business Manager at Orange Money to gain some insights into their service and their journey towards this significant milestone.

MMU: Hi Frederic, Can you describe briefly the various Orange Money products and models presently found in Africa?

FH: Orange Money is an innovative, mobile-based payment service specially designed to meet the needs of customers in Africa and the Middle East.  In countries where it is available, customers may open an Orange Money account whether or not they have a bank account. Orange Money allows customers to carry out simple banking operations and transactions including money transfers, where users can send money using their phone to any Orange mobile customer in the country; bill payments, as well as access to financial services, including solutions facilitating savings and insurance.  For sub-Saharan Africa we are using a similar model so there is a general logic behind our regional strategy. However, we are aware we need to take into account the local context. For example, an exception to this rule has been our service in Kenya, Iko Pesa.  Given the presence of a strong competitor such as M-PESA, we had to carefully adapt our model to this unique market.  At the core is a partnership with Equity Bank which allows customers access to a full bank account.

MMU: Can you describe Orange’s interest / commitment in Mobile Money – why is this such a key service for the group?

FH: There is very high level of commitment from group level in addition to top management support at the national and supranational level.    The group is focused on providing a strong value proposition for its customers and wants to respond to their needs for these services.   We see mobile money as an investment, as well as enabler for in-country economic development.  By providing our customers with the means to save money, pay bills, run their businesses and receive money from abroad, we are not only reinforcing customer fidelity but we are also able to play an active role in the economic and social development of the country.

MMU: Orange Money recently reached the threshold of 3 million customers. What are the main changes in terms of Orange’s mobile money strategy which have contributed to this sharp increase in its customer base over the past year?

FH: There has been a change of focus. The Orange Money story is a long one in terms of product development.  Last year, the group launched in countries which we think have great potential. However, the focus is now on the actual business.    We are focusing on explaining to customers how Orange Money is a financial service and working on different customer segmentations.  We are also lucky to have a group of committed country team members which are now focusing heavily on business development.   The success of Orange Money today is not based on the natural evolution of the product but is rooted  in the simplicity of our service, in our ability to have a good distribution network and in an overall improvement to our communications strategy.  We realized that the customer journey needs to be pedagogical, secure and easy.

MMU: Orange launched in Botswana in partnership with Standard Chartered Bank and in Cameroon in partnership with BICEC. In your opinion, how do these countries differ from West and East Africa, both sub-regions which have their own internal market dynamics for mobile money?

FH: Botswana has one of the highest incomes per capita in Africa and exhibits higher rates of financial access. We are providing customers with a similar product but adapted to the local context.  Cameroon on the other hand is more similar to the rest of the sub-Saharan markets. An interesting market to watch in my opinion is Madagascar given the high level of competition and vibrancy in the market.  There are over half a million mobile money customers and it’s a large country with poor infrastructure, which facilitates the development of mobile money services.

We ask ourselves a key question going into a market: Do we just need a mobile wallet or do we need to go one step further and link it to a bank account.

MMU: Thank you Frederic.

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