For Mobile Operators, Remittances Yes, Retail Payments, Not so Much

At least so far, it is safe to say that mobile operator value in the “payments” ecosystem has been most clear for remittances and other retail payments in developing regions and least successful in retail mobile payments.

In fact, mobile remittances might be just at the beginning of their growth curve. Already, the volume of existing mobile banking transactions for remittances is an order of magnitude higher than any other application, according to the GSMA.

source: GSMA

The reason many are optimistic is that remittances by any means represent over $1 trillion in value annually, and only about $5 billion is transferred annually in the United States, for example, using a mobile phone.   

For mobile operators in some markets, revenue contributed by M-Pesa, the mobile payments system, already is greater than revenue earned from mobile data, for example. Some 18 percent of mobile operators polled by GSMA in 2014 reported that mobile money revenues represented more than 10 percent of total revenue, for example.

M-PESA represented just under 20 percent of total revenues for Safaricom in 2014, for example.

MTN Uganda’s mobile money services generated about 15 percent of total revenue in mid-2014.

Tanzania’s M-Pesa service represented 21.3 percent of the operator’s total service revenue in 2014.

source: GSMA

source: GSMA

By 2014, 255 mobile money services operated in 89 countries and is now available in 61 percent of developing markets.

source: Maris Strategies

source: GSMA

source: GSMA

Retail mobile payments in developed markets have, to this point, been another story. Though In 2015 mobile payments might have represented $8.71 billion in mobile retail transaction volume, very little of that activity flowed through mobile operator services.

The SoftCard initiative lead by AT&T, Verizon and T-Mobile US was quietly folded into Google Wallet, not that Google Wallet has fared better.

The space has been tough for many others, as well. The Merchant Customer Exchange, branded as CurrentC, and representing major mass market retailers, faces a splintering.

Walmart was a lead backer of MCX, but now plans to introduce its own mobile payments service, Walmart Pay. Target, another early MCX supporter, appears to be mulling its own payments system as well.

It remains to be seen whether retail mobile payments will, in the future, be a significant revenue driver for mobile service providers.

Internet Access: Moore's Law Not Fast Enough for You?

Author Samuel Clemens once quipped that there are “Lies, damn lies and statistics.” Psychologists know a Rashomon” effect exists, where people have distinctly different impressions of the same event.

So it always seems to be with understanding of how much progress any nation or service provider is making in the area of Internet service quality.

Improvements nearly at Moore's Law rates seems to be a “problem.”

The Federal Communications Commission takes one view; some take the other.

“Broadband deployment in the United States--especially in rural areas--is failing to keep pace with today’s advanced, high-quality voice, data, graphics and video offerings, according to the 2015 Broadband Progress Report adopted today by the Federal Communications Commission,” the FCC says.

The FCC observation about rural areas is correct, and likely always will be, for many of the reasons that hipster bars and restaurants never will be as plentiful in rural areas as they are in urban areas.

Density is required for some businesses to exist, or be sustainable.

The FCC notes that “55 million Americans--17 percent of the population--lack access to advanced broadband,” defined as 25 Mbps in the downstream and 3 Mbps in the upstream.

At the same time, firms such as Comcast, Google Fiber, AT&T, CenturyLink and many others are actively deploying gigabit access networks, where demand will sustain those services.

More important, Comcast and AT&T continue to demonstrate they can scale Internet access bandwidth nearly at Moore’s Law rates.

To the extent the FCC sees itself--and to the extent that it is--the protector of citizen and consumer rights, it is understandable that the agency can say we are not making enough progress.

But that does not mean we are not making progress. We clearly are, unless you think Moore’s Law rates of improvement are not fast enough.

The other observation is that, to a large extent, we will never experience, in rural areas, the same amenities we see in urban areas.

In that sense, “lack of progress” will always  be a problem. That does not mean we are not “solving” the problem, generally.

Nine Years Since the iPhone Introduction

Steve Jobs unveiled the iPhone nine years ago, on Dec. 9, 2007. It might not have immediately changed the world, but it set in motion a huge change in the way mobile devices are developed and commercialized, loosening mobile service provider control.

Some of us would argue the iPhone was the first device to capture end user imagination in a matter similar to the way people have emotional identifications with their clothing, perfumes, autos, shoes, favorite vacation destinations or sports teams.

In other words, for the first time, there was a physical product that embodied the value of "bandwidth" or "network access."

Intangible services (legal or financial services, for example) are hard to market, since the buyer has no tangible way to judge the quality of the product until after the product has been purchased and consumed.

Internet access and voice service, for example, are intangible. The iPhone was a breakthrough. It personified the value of mobile data access. We already knew the value of a "mobile phone" for voice or messaging. But iPhone personified the value of mobile Internet access.

1.66 Million Employed in App Industry; Perhaps 2.6 Million in Telecom Service Provider Industry

The U.S. app industry represents 1.66 million as of December 2015, according to the Progressive Policy Institute.

PPI includes among the firms employing those people large and small app developers; software and media companies; financial and retail companies; industrial companies; health and education enterprises; leading tech companies such as Google, Apple, and Facebook; nonprofits and government suppliers; and large accounting and consulting firms.

Such employees have direct information technology jobs, non-IT jobs that support those jobs, or spillover local retail and restaurant jobs, construction jobs, and all the other necessary services.

Core app economy workers number about 550,000.

By way of comparison, there were an estimated 910,000 people directly employed in the core telecom industry in 2010, according to US Telecom.

According to the U.S. Bureau of Labor Statistics, there were in December 2015 some 868,000 core service provider jobs. Using the same ratio of indirect jobs to direct jobs as for the app economy analysis, there might be 2.6 million people employed by the core telecommunications services industry.

                                    Estimates of App Economy Jobs

Date of estimate	Date of publication	App Economy jobs, thousands
Fall 2011	Feb. 2012	466
April 2012	October 2012	519
June 2013	July 2013	752
Dec. 2015         January 2016		1660
Data: South Mountain Economics, Progressive Policy Institute, The Conference Board, Indeed, BLS

Cloud Computing Services Sales $47 Billion for 12 Months Ending in September 2015

Cloud computing infrastructure spending was about $60 billion for the 12 months ending in September 2015, according to Synergy Research Group, growing 28 percent annually.

About $47 billion was earned by sales of various cloud services.

Service revenues included $20 billion for cloud infrastructure services (IaaS, PaaS, private and hybrid services) and $27 billion from software as a service.

Public infrastructure as a service and platform as a service had the highest growth rate at 51 percent, followed by private and hybrid cloud infrastructure services at 45 percent.

Private cloud spending grew 16 percent.

source: Synergy Research

2016 Year the Phone Number Disappears?

With 800 million people using Facebook’s Messenger app every month, it is understandable that

David Marcus, Facebook VP of Messaging Products, would say that 2016 is the year we see “the disappearance of the phone number.”

Many of you have been hearing such predictions for a decade or two, so will not pay too much attention. It is not that use of Messenger and other social messaging apps will stall. Indeed, it seems certain usage will grow.

But there simply is too much necessity for phone numbers, globally, for other reasons. Many of you know all the reasons why people do not rely on “phone numbers” to dial or reach people.

Underneath, in the network, there is little way to avoid such conventions.

75% of Cars Sold in 2020 Will Be Connected Car Capable

By 2020, 75 percent of cars shipped globally will be built with the necessary hardware to allow people to stream music, look up movie times, be alerted of traffic and weather conditions, and even power driving-assistance services such as self-parking. according to Business Insider Intelligence.

The connected-car market is growing at a five-year compound annual growth rate of 45 percent, about 10 times as fast as the overall car market.

Of the 220 million total connected cars on the road globally in 2020, connected services will be activated in 88 million of those vehicles.

Business Insider