Mobile Banking Customers Love Convenience, Banks Will Struggle with Business Case

An overwhelming majority (94 percent) of U.S. consumers say that banking on their mobile device is easy and more than three quarters (77 percent) feel it is convenient, but only 42 percent cite that it is reliable, according to a new study released today by Infosys. 


The Infosys survey also found that slow speed is a barrier to adoption for 31 percent of respondents. Some 30 percent are deterred by a lack of confidence in the protection of their data. About 26 percent say the experience of mobile banking is inconvenient.

Nearly half (45 percent) of consumers who do not use online banking believe that mobile banking is "experimental" or "dangerous," and more than a third (38 percent) say it is "scary." In fact, non-users are three times as likely to say "scary," and almost four times as likely to say "dangerous" than mobile banking users.

While 60 percent of consumers who do not use mobile banking cite a lack of confidence in the protection of their personal or financial data as a top concern, nearly the same amount (55 percent) share private information when updating their Facebook status on smart phones.

That might not be surprising. People have higher thresholds for security when dealing with their money, than their status update information, pictures and opinions.

Nearly 80 percent of all consumers like the mobile banking benefit of 24-hour access to their account, but only 48 percent are happy with the speed of service and only 46 percent with ease of log in.

The business issue for bankers is that mobile is a new channel to support, but without any obvious incremental revenue to gain.

Apple Earnings: Market Share Matters

There are a couple of classic reasons why market share is deemed to be a good thing. Gross revenue is one advantage. But profit margins are the other advantage leading market share is supposed to confer. Apple seems to be a case in point. 


Telcos struggle to make 20-percent margins. Perhaps software or "Internet" companies could reasonably expect, with market leadership, to have 40-percent profit margins. It is harder, in consumer electronics, in some product lines, to make single-digit margins. Apple is nearing 40-percent margins. Almost unheard of for a consumer electronics manufacturer.

Will Telcos "Think the Unthinkable?"

Are tier-one service provider strategic options that once were "unthinkable" now becoming less improbable? If some possible revenue trends materialize, what might have seemed "impossible" in the past might start looking more palatable.

By 2020, for example, European telcos could see their sales fall by up to 20 percent, while; earnings (EBITDA) could even drop by 40 percent, according to an analysis by Roland Berger Strategy Consultants.

Change of that sort might lead to relatively shocking changes for many service providers, including separation of retail and wholesale units or a switch to “wholesale-only” operations.

To respond, telcos must reduce operating costs, adopt new, sales and service models and tap growth markets, Roland Berger says.

The study suggests European telcos will have to invest up to EUR 600 billion, mostly for optical fiber and Long Term Evolution fourth generation mobile networks, says Alexander Dahlke, Partner at Roland Berger Strategy Consultants. Two or three main strategies are conceivable.

Google Mobile Playbook

Predictably, the Google Mobile Playbook, which provides advice for businesses about how to go about creating and using mobile webistes, is optimized for viewing on a tablet. Too clever by about half. Some applications naturally are optimized for mobile use, others for content creation, others for consumption mostly in a relaxed setting. 


The key bits of advice:

• Define your value proposition by determining what your consumer wants to do with your business in mobile. Benchmark against others in your industry for ideas.
• Build a mobile website. Once you have a mobile website, check the
  stats and optimize based on consumer usage.
• Build an app for a subset of your audience after your mobile site
  strategy is in place. Don’t forget to promote your app.
• Assign a Mobile Champion in your company and empower them with a cross-functional task force.
• Set up a meeting with your agencies about what’s working and what’s not
  for your brand on mobile and tablets.
• Search for your brand in mobile, as a consumer would. Take 5 minutes
  and do this today. What’s working? What’s not?
• Separate mobile-specific search campaigns from desktop search campaigns so you can test, measure and develop messaging specific for mobile.
• Run rich media HTML5 ads to extend your branding message to reach the mobile audience.
• Assign everyone in your marketing org the action item of reviewing their programs through a mobile lens.
• Check out your tablet consumer’s experience with your brand. Take 5 minutes today and search for your brand on a tablet as a consumer would. What’s working? What’s not? Maximize the tablet environment with rich media creative.

Half of all March 2012 Bandwidth Consumed was Video

Half of all Internet bandwidth usage now is video.  You probably would have guessed that. 

Apple iPhone Might Explain AT&T, Verizon, Sprint Net Additions, Losses

You might say the Apple iPhone was the story in the first quarter of 2012, in terms of how AT&T, Verizon and Sprint fared in terms of net new additions, either positive or negative.

Sprint activated more than 1.5 million iPhones in the first quarter of 2012, about 44 percent of those representing new customers. Since Sprint added about 263,000 net additions, the role of the Apple iPhone is obvious.

In its first quarter of 2012, AT&T  added 187,000 new two-year contract customers, 180,000 of those involved tablets such as the iPad, suggesting an anemic 7,000 net phone additions to a contract user base of nearly 70  million.  AT&T reported 4.3 million iPhone activations, a 43 percent drop from the fourth quarter.

Still, the iPhone still accounted for about 78 percent  of the smart phones that AT&T sold for the quarter.

Verizon activated 3.2 million iPhones during the first quarter, down from 4.3 million iPhones in the previous quarter, which was part of Apple's record-setting launch quarter for the iPhone 4S.

Overall, Verizon reported sales of 6.3 million smartphones during the first quarter, meaning that the iPhone continues to represent just over half of the carrier's smart phone business.

Why Shared or "Family" Data Plans Make Sense

Shared data plans are coming. The leading service providers in the U.S. market have been talking about it for years.  And there are good reasons for doing so.


It wouldn't be the first time the industry has moved to family plans. It did so with voice and text messaging, for example. If you understand why service providers did that, you will understand why they will move to similar policies for mobile data.


The family plan was developed to solve one specific problem. Most adults already were buying mobile phone service, which left only one potential user segment that had not yet adopted, and could drive unit growth. That segment was children of the adult users.


Family plans made it possible for parents to equip their children with mobile devices at prices the adults could justify. And that was the primary way mobile service providers could drive adoption of additional units, when the adult user market was approaching saturation. There also were churn benefits. 


With most service providers already moving to mandatory mobile data plans for smart phones, one way to provide clear incentives for faster adoption is to reduce the incremental cost of adding additional smart phones to accounts where there are significant feature phones in use. 


With average revenue per user going down, the best way to increase revenue is to get more devices on the network, including smart phones and tablets equipped with mobile broadband capability. 


Family data plans will mean that the incremental cost of adding each additional device will be lower than at present.