Laying the foundation for m-commerce in India

Ashvin Vellody, KPMG
13 Oct 2010

The challenges facing India's telecom sector are as fascinating as they are wide ranging. We believe the industry is at a particular inflexion point with 3G rollouts about to commence, a dozen or more operators vying for the customers, aggressive policy debates and the inevitable steps toward mobile commerce.

M-commerce services have an aspect of inevitability to them. The recent news about Bharti planning to rollout out m-payment services to assist its customers make virtual payments at retail outlets and restaurants using their cellphones proves that operators are taken this opportunity seriously and planning to act on it.

As this transformation moves ahead, we recommend that operators and vendors take five steps to maximize the potential opportunities that lie ahead for m-commerce, specifically mobile payments.

Be the first to market with a good offering. Nothing beats being the first to market. It is better than waiting to iron out all the kinks before proceeding. Even assuming that the m-payment service is bank led, the operators need to play a big role in leveraging their mobile networks and the end-user devices to be the proxy ATM in rural areas. Applications on the device that enable easy usage and is in the local language could be a starting point.

Offer the service and they will try it. Airtel's proposed semi-closed wallet offering a range of financial services is an example and the first step needed in building the capability and the trust that transactions up to a certain amount can be facilitated. No matter how the 650 million mobile consumers are segmented within the marketing departments of operators, they will come up with a target number that is attractive for a first launch of this product. Basically, there are enough early adopters to roll out a service, experiment, learn and come back stronger for the next round.

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