India Mobile Banking Gets Boost from Bharti Airtel and Vodafone

“Mobile payments will be the next step for delivering financial services to hundreds of millions of 'underbanked' people or those who are under-served currently, both urban and rural customers, especially in emerging economies," says Gerhard Romen, Director, Mobile Financial Services, Nokia.

Recently, mobile banking got a huge boost with Bharti Airtel and Vodafone announcing separate partnerships with State Bank of India and ICICI Bank, respectively. While Bharti Airtel and SBI have formed an exclusive joint venture, Vodafone has agreed to become a "business correspondent" for ICICI Bank.

While Vodafone manages over 1.5 million retail points for acquiring customers and servicing them, Airtel is present across 5,101 towns and more than 5,00,000 villages. That's a big deal considering that 51.4 percent of 89.3 million farmer households do not have access to any credit from institutional or non-institutional sources. 

Only 27 per cent of farm households are indebted to formal sources. Only 13 per cent are availing loans from the banks in the income bracket of less than Rs 50,000. 

There's money in the mobile

Is FiOS Slowdown Related to Possible Verizon Restructuring?

Verizon's apparent slowdown of further FiOS construction could be driven by any number of good reasons, including new skepticism about the financial return, alternate approaches to achieving the same goal, or perhaps other required uses for cash flow.

The need to start shifting free cash flow to dividend payments to minority partner Vodafone, or even a more-drastic reshuffling, such as a merger between Verizon and Vodafone, are possible drivers as well. Vodafone is a significant 45-percent minority investor in Verizon, and just about everyone has been expecting some adjustment of the relationship at some point, with the options including each company buying out the other, although a change in the majority ownership status is not inconceivable.

But a full-fledged merger also might be on the table.

"People familiar with the matter say there are three options being considered by the two sides," the Telegraph reports. The first is a full merger of Vodafone with Verizon Communications; the second would be for Verizon Communications to begin paying a dividend to Vodafone; and the third would be for both companies to sell their respective stakes in Verizon Wireless either to each other or to a third party.

It is that second possible outcome that suggests Verizon might have other needs for its free cash.

In fact, some observers have suggested Verizon Communications would prefer to buy out Vodafone's stake in Verizon Wireless. But analysts say selling the Verizon Wireless stake is not an option for Vodafone because it would result in a giant tax charge as well as deprive Vodafone of about 30 percent of its total annual revenue.

While they are “not aware of any increases in market concentration from such a merger that would raise serious antitrust issues at the U.S. Department of Justice,” a deal that is structured to give Vodafone control over all of Verizon's assets, including landline, would raise national-security questions, though.

source

24 Carriers, 3 Handset Vendors Launch 3 Billion User App Initiative

A new consortium already including 24 global mobile service providers, Sony, Samsung and LG are creating a new applications community, allowing developers to create apps working across networks serving three billion people.

The new "Wholesale Applications Community" is a recognition of the role application stores now playing in fostering new applications and a great deal of the value of mobile broadband services.

América Móvil, AT&T, Bharti Airtel, China Mobile, China Unicom, Deutsche Telekom, KT, Mobilkom Austria Group, MTN Group, NTT DoCoMo, Orange, Orascom Telecom, Softbank Mobile, Telecom Italia, Telefónica, Telenor Group, Telia Sonera, SingTel, SK Telecom, Sprint, Verizon Wireless, VimpelCom, Vodafone and Wind, as well as Samsung, LG and Sony Ericsson are founding members.

Whether directly or indirectly, by design or by default, the new development community will compete with the Apple App Store as well as other app stores being created by Google and other device and application providers.

The real carrot for developers, if the initiative can iron out any number of important details, is access to a potential audience of three billion mobile users. In practice, discrete markets will be smaller, limited by natural language communities, for example. But it is an ambitious initiative showing access providers are not interested in forfeiting their roles in the application ecosystem to other handset or application providers.

Google Nexus One for AT&T?

A device that's almost certainly an AT&T-compatible version of the Google Nexus One has been approved by the Federal Communications Commission. The version now sold by Google works on all T-Mobile USA 3G spectrum. but not on all AT&T 3G bands.

Versions running on Verizon's CDMA air interface and also for Vodafone are expected at some point.

Both the Nexus One and the newly-approved phone are being made by HTC. And while the name of the product in question isn't given, its model number is: 99110. The model number for the current version of Google's smartphone is 99100. These are so close its seems very likely they are from the same series.

Verizon Grows Annual Revenue 5x More Than Average

Verizon's revenue growth over the last year tops, by a substantial margin, revenue growth for nearly all other service providers among the 30 largest in the world.

Annual revenue growth of about 1.6 percent is the average, says TeleGeography.

Verizon grew revenue by 10 percent. Vodafone, China Mobile and Deutsche Telekom were the other stand-outs.

Vodafone Data Plan Prices Slashed

In what appears to be a major bid to ignite the mobile broadband market, Vodafone NL has reduced data plan bundle prices as much as 50 percent for domestic usage and up to 85 percent for international use in 42 countries. That sort of thing might ultimately have direct implications for U.S. high-speed mobile services as well. And the reason is that if it appears WiMAX or any other mobile broadband alternative is getting traction, incumbent mobile service providers have a potent weapon: pricing.

While no carrier would be thrilled about slashing its prices in the manner Vodafone has done, the fact remains that incumbent mobile providers have and texting revenues to prop up their revenue streams. Upstart mobile broadband providers will have less margin to drop their prices. Which leads one to wonder what will happen when Clearwire and Sprint fire up their new WiMAX network on a continental basis (assuming Sprint perseveres).

All discussion of technology advantages and attributes will become irrelevant if the pricing leadership changes in any significant way. Pricing also is key to creation of some potential new mobile Web business with different pricing and use cases than today's mobile devices provide.

In other words, will WiMAX develop as a cable replacement, 3G replacement or foundation for mobile devices other than phones? In the first or second cases, pricing policy is pretty simple: offer comparable service at lower prices. In the last case, the issue is whether a sustainable business can be built around non-voice devices: cameras, game platforms, music players, navigation, mobile Web. In that case, prices probably have to be quite aggressive.

So part of the equation and business model is whether a WiMAX network can be built cheaply enough, and operated efficiently enough, to offer such lower pricing. In any event, it appears at least some leading mobile providers aren't going to wait to find out.

And as this forecast from In-Stat suggests, most of the future WiMAX market is going to be mobile, not tethered.

Pre-paid Vodafone mobile users in the U.K. last summer also found themselves offered new lower pricing of £2 per Megabyte for mobile data rather than the original £7.30 per MB. While not a complete flat rate plan, it's a possible step in that right direction.

Carphone Warehouse in Play?

Shares of Carphone Warehouse Group, Europe's largest mobile handset retailer, rose the most in more than five years in London trading on speculation the company may receive a takeover offer, says the Bloomberg news service.

"Rumors about bid interest from Vodafone and Best Buy have been doing the rounds for some time," says Jimmy Yates, a London-based trader at CMC Markets.

What is interesting is the strategy context driving some of the rumored suitors. Best Buy has a small stake in Carphone Warehouse, which operates 2,400 stores across Europe. Best Buy also is collaborating with the U.K. chain to boost sales of mobile products in the U.S. Best Buy stores.

So you might argue that Carphone is simply a way for Best Buy to expand its footprint in its current business.

But keep in mind that Carphone also has 2.5 million Digital Subscriber Line customers. It also has a backbone network. Consider that Best Buy's Geek Squad is in the technology services business.

And recall that Best Buy owns Speakeasy, a provider of business-class broadband access and voice services in the U.S. market. Sure, Best Buy can grow its retail footprint. But by acquiring Carphone Warehouse, Best Buy makes an even bigger bet to become a more-significant provider of broadband access, business voice and mobile services.

For Best Buy, its core business is more than acting as a retail distribution channel. It is a service provider. Owning Carphone Warehouse would only deepen that commitment.

Now consider the possibility that Vodafone might acquire Carphone Warehouse. The idea there is not so much that Vodafone wants to become a mass market electronics retailer. Vodafone, long a dominant wireless service provider, now must also become a multiple-services provider, and broadband-based services provided over wireline networks are part of the vision.

Carphone Warehouse would give Vodafone much more heft, in that area. It might not strike you as significant that wireless and wireline services are converging. It might be a bit more surprising that retailers are moving from simple channel partners into the service provider business.

Verizon to Dump CDMA for 4G

Verizon Wireless will base its fourth-generation mobile broadband network on LTE – Long Term Evolution – the technology developed within the Third Generation Partnership Project (3GPP) standards organization and based on GSM.

The selection of LTE means Verizon wants to align itself with the scale opportunities the global standard will provide, rather than extending its existing CDMA platform.

Verizon and Vodafone have a coordinated trial plan for LTE that begins in 2008. Trial suppliers include Alcatel-Lucent, Ericsson, Motorola, Nokia-Siemens, and Nortel. Discussions with device suppliers have expanded beyond traditional suppliers such as LG, Samsung, Motorola, Nokia, and Sony Ericsson, as consumer electronics companies anticipate embedded wireless functionality in their future products.

Users won't see 4G for several years, however, so there's no need to worry about existing CDMA equipment. The decision does call into question how much actual developer interest there will be in Verizon's new "open" CDMA platform, however.

Unlocked German iPhone: 999 Euros

Deutsche Telekom, after being sued by Vodafone over availability of unlocked iPhones, will offer the device for 999 euros ($1,483) without requiring a two-year exclusive contract with its T-Mobile unit.

T-Mobile changed the rules after Vodafone won a court injunction that bans T-Mobile from selling the iPhone with contracts or the "SIM lock" that prevents the phone from working on another network.

Apple and Orange have the same issues in France.

Vodafone Blocks T-Mobile iPhone Sales

Vodafone has obtained a restraining order in Germany against T-Mobile's exclusive deal to sell iPhones.

Europe has fair-competition laws that are designed to allow consumers choice. So Vodafone might be hoping its lawsuit will help it get its own rights to sell the iPhone. It wouldn't be the first time an iPhone deal has run into complications. In France, Apple has to supply unlocked iPhones, despite Apple's objections, because of a French law requiring carriers to offer unlocked as well as locked phones.

Vodafone: Pipes, Not Content?

Vodafone had a good quarter. It might also have had an instructive quarter. The stand out? Organic growth of 45 percent in non-messaging data revenue. In fact, non-messaging revenue is now up to a level of half that of messaging (text and multimedia messaging.

"The organic growth in data revenue of 45.1 percent was particularly strong and can be attributed in part to increasing penetration of Vodafone Mobile Connect 3G/GPRS data cards and handheld business devices," the company says. Translation: Wireless notebook computers and BlackBerry style email devices are driving data growth.

Vodafone handhelds in the business category increased by 112.6 percent since September last year and Vodafone Mobile Connect 3G/GPRS data cards grew by 78.9 percent. Assume there are 1.8 million data cards in use and 1.4 million email-centric handhelds as well.

Assume the monthly revenue stream for a notebook card is £35 a month. Assume an email device such as a Blackberry represents £25 a month. That suggests £294 million in revenue from data cards and £165 million from email devices, or £459 million, over a six-month period. EU-wide, Vodafone got something like £843 million in non-messaging data revenue over the same period.

So "pipe" revenues have increased from 46 percent to 54 percent of Vodafone's European data revenues over the last year. "Dumb pipe" trumps "content," in this case.

Another Ridiculous Patent Suit

Technology Patents, a Maryland entity having its principal place of business in Potomac, Md, (address P.O. Box 61220, Potomac, MD 20859, http://www.arismardirossian.com/), has filed a patent infringement suit claiming that 131 carriers, handset suppliers and application providers have infringed a patent covering global transmission of text or short message service (SMS) communications.

Technology Patents alleges that all of the defendants, which include T-Mobile, Vodafone, China Resources Peoples Telephone Company Ltd, AT&T, Samsung, Palm, Microsoft, and Yahoo! (among the 131 defendants), have caused international text or SMS messages to be sent to and from Maryland, thereby resulting in infringement of the asserted patents in Maryland.

TPLLC has asked for a permanent injunction against the defendants, enjoining them from providing international messaging operations and capabilities in the U.S. market.

My views on this, as previously mentioned, are that there is way too much use of "patents" as a business weapon or means of extortion, and too little use of patents as a genuine way to spur the formation of intellectual capital. We aren't talking about one or two "infringers." We are talking virtually the entire global telecommunications industry here. Can that possibly be the case? Or is this yet another example of "prior art" that should never have been given patent status in the first place?

It's crap.

Telcos and Web Communications: Who Wins?

Attention might not be the basis for every revenue model, but it clearly underpins most media businesses. It might underpin other businesses as well, including communications.

So note changes in how and where people in France are spending their "communications" time. Since 2000, attention and time spent have been shifting towards Web-based applications and pursuits, and away from telephone-based communications. To be more precise, 53 percent of "communications" or more might be said to originate in some Web related activity, not a classic "pick up the phone" activity.

Time isn't exactly money, so attention and usage do not translate immediately into revenue. But attention sooner or later will create the possibility of revenue. And if this sort of shift in how people communicate continues, revenue opportunities and potential inevitably will shift.

That doesn't mean revenue-generating endpoints such as mobile phones, other communicating devices or "access" services will stop proliferating. It simply is to point out that when so much communications activity originates in Web-based things, whether enterprise or consumer driven, something new will happen, revenue-wise. It has to.

Will Verizon Wireless go WiMAX?

Will Verizon Wireless someday adopt WiMAX as its fourth generation access platform? And if it does, will WiMAX swiftly become just one more access technology wireless incumbents use to reach customers? If so, will WiMAX really be disruptive?

So here's the logic. Vodafone has at least for the moment chosen to keep its 45 percent stake in Verizon Wireless. And though it hasn't been a WiMAX backer heretofore, Vodafone has become a principal member of the WiMax Forum, and has been conducting trials in Malta, France and Bahrain for some time now.

This might just be a hedge, as Vodafone also supports the cellular-based standard for very high speed data networks LTE (Long Term Evolution), as well as WiFi Mesh. But it's a fast-moving world, and Vodafone at the very least wants to react swiftly in case WiMAX takes off as a primary tier one provider access platform.

In the U.S. market, two code division multiple access (CDMA) networks are Sprint and Verizon Wireless. The Sprint Clearwire alliance ups the ante. And Vodafone obviously knows things we do not. But there is some chance WiMAX becomes a major incumbent access platform. And that would clearly blunt its use as a competitive and alternate pipe.

Still, it is fair to argue that WiMAX, even in the hands of incumbents, will spur some "goodness". Sprint WiMax will launch first in Chicago and Washington, D.C. in early 2008, offering 2 Mbps to 4 Mbps service for an estimated $55, company executives have suggested. That would blow the doors off at&t or Verizon 3G offerings, I have to tell you.

Sprint also will be mulling a more open approach to use of that bandwidth than we have been accustomed to seeing on wireless networks. So maybe more competitive and open goodness will flow from WiMAX, even if it winds up being a major incumbent access platform.

SunRocket, Ooma, Verizon, Vodafone, at&t

So the VoIP blogging community is talking about almost nothing but Ooma this morning. But as I mentioned on my other blog (www.ipbusinessmag.com), focusing so much energy on SunRocket's travails, which was the other recent item everybody was talking about, though obviously of high interest, has almost no strategic implications for the broader communications industry. Rumors that first had Vodafone pondering buying Verizon, though almost certainly an investment banker's trial balloon, are something else.

Today Andy Abramson says his sources say it actually is at&t that is talking about buying Vodafone. Now that would be quite a deal. And while this particular rumor also could be the result of an investment banker's strategy, it does fit quite well what new at&t CEO Randall Stephenson has been saying about at&t. It is a "wireless company" that has no intentions of abandoning its grow by acquisition strategy.

Ooma is interesting. What happened to SunRocket also is a high interest event. But neither is going to have truly strategic direct implications for the global VoIP industry. Whatever one might say about the particularities of the U.S. VoIP industry, VoIP continues to grow on a global basis, almost mechanically.

Wireless increasingly is the way voice gets done. Social networking portals, instant messaging and enterprise apps also are emerging ways voice and communications gets done. All of that is a really big deal.