Podcast Transcript
Mobile Commerce:
Episode 2: The Evolution and Promise
Gabriel Brown, chief analyst, Unstrung
Insider — London: The next generation
of wireless technology is enabling a truly
mobile Internet experience. Networks
around the world have largely migrated
to third-generation technology to en-
able a more computerlike experience on
handheld devices. All of these trends,
combined with the fact that some 2.5 bil-
lion people around the world use mobile
phones, sets the scene for some highly
innovative and lucrative mobile com-
merce applications.
Planning now for the volume of network
traffic and end-user demand for secure
and accurate transactions is imperative
for operators. Partnerships with compa-
nies that understand the complexities of
the mobile network are crucial to ease
the burden on network backhaul. But be-
yond users and their handsets, networks
need to support the speed and reliability,
not only to retain customers, but compel
them to embrace mobile commerce as
a unique value-added service that only
mobile operators can provide.
Mark Hawkins, communications
manager at Dynmark/MX Telecom —
London: Speed is very much an issue
when using your mobile, because you
can often tend to be impatient in the first
place. That’s why you’re using your mo-
bile rather than finding another medium.
Andrew Shuttleworth, editor of Liv-
ing in Japan Guide, co-organizer at
tokyo2point0 — Tokyo: So having a very
high-powered mobile phone that I can
just switch on instantly, instant access to
the Internet, access my e-mail, read my
e-mail and click through to links is very
powerful. So, certainly for my lifestyle
having a very powerful mobile phone is
very important. I couldn’t live without it.
Doug Jaeger, owner, Happy Corp. —
New York: I think one of the challenges
with speed and mobile commerce is that
like wireless network speeds in America
just aren’t very fast. And so, you know,
if there’s a computer nearby or a mobile
device, you’re going to go to a computer.
So I find myself using a mobile device
when it’s like a last resort. I think it’s
embarrassing that America’s mobile
technology is so far behind.
Gabriel Brown: In Europe, Orange,
Vodafone, T-Mobile and Telefonica Mov-
iles recently announced the creation of
an industrywide group called the Mobile
Payment Services Association to push for
new standards in m-commerce systems.
In addition to standardizing technical
issues, the new association will promote
a common m-commerce brand and help
launch new mobile commerce services
over European networks.
Christopher Billich, Head of Develop-
ment for Infinita — Tokyo: Standardiza-
tion is key. I don’t want to deal with, you
know, three or four applications running
on the chip on my phone. Does this store
have the right reader for the application
that I still have a balance?
Gabriel Brown: In Japan, mobile
commerce has been a huge success,
accounting for more than $400 mil-
lion of revenue each year. Through NTT
DoCoMo’s popular i-mode service,
subscribers can buy sodas from vending
machines, purchase food at fast-food
restaurants and shop at Internet retailers
like Amazon, buy all their goods through
DoCoMo’s billing system. Other compa-
nies, like Visa, also offer m-commerce
services in Japan.
John Gauntt, senior analyst,
eMarketer: The Asian operators, in
contrast, first identify the killer need to
eliminate hassle of going through the
train station or doing something that
is—we must do it, it’s repetitive, it’s low
value. But they did that in order to estab-
lish that initial level of trust, and they are
now migrating their customers to higher
value, more sophisticated behaviors.
Professor Adam Greenfield, New York
University — New York: I have to say
that predominantly my experiments with
Mobile
Commerce
Driving Change in Mobile Backhaul
m-commerce have been outside of the
continental United States; mostly in Asia,
in Seoul or in Hong Kong, where they
have really well-developed infrastruc-
tures and the user experience is as near
effortless as it possibly could be, which
really begins to—it makes a profound dif-
ference in the way you see this. It ceases
to become so much a technology and
becomes simply a part of the way things
are done.
Andrew Shuttleworth: So I think Japan
really is quite a bit ahead. Everyone has
Internet-capable mobile phones. The
billing system is really well integrated
between buying things online and getting
those attached to your phone bill. And
so, yes, I mean, pretty much anyone can
do mobile commerce without even real-
izing that they’re doing mobile commerce
or calling it mobile commerce.
John Gauntt: So by engaging in mobile
commerce, mobile operators per se are
not only allowing their customers to go
to more sophisticated behaviors, but
they do have the distinct possibility of
lowering churn rates and also keeping
their customers longer. What they get
in the longer term is the visibility into
consumer habits that enable them to
develop new products and services that
are more tailored to what the consumer
really desires.
Adam Greenfield: If you ever really pay
attention to the moments in your life that
you are at a turnstile or at a register, in a
place like New York at least, you know,
those add up quite a bit. Instead of haul-
ing my wallet out or instead of having
to, you know, my goodness, deal with
cash or checks, it would be just the most
wonderful thing in the world to wave this
over a reader and have done with it.
Ben Godfrey, CTO, MyMart — London:
What mobile phones really excel at is as
a communication mechanism. If you’ve
got a situation where you have an advert
that you’ve just seen that has a brand
you maybe are not familiar with, then it’s
 Mobile
Commerce
Driving Change in Mobile Backhaul

an opportunity to interact with them, and to make payments. Connections with Gabriel Brown: Clearly, the mobile com-
you can pay them. poor reliability are inherently less secure merce market offers billions of dollars in
and consumers will be soured if they revenues, but only if operators plan their
John Gauntt: There’s a half-trillion-dollar
aren’t sure their payment went through. strategies carefully today. That means
market in overseas remittance of foreign
This makes it critical to educate consum- that networks need to support the speed,
workers who are working in foreign
ers and make sure they’re comfortable reliability and security that will encour-
countries who are remitting funds back
with the technology. age users to embrace mobile commerce
to their relatives or their contacts in their
and use the service for increasingly larger
home countries. Helen Keegan, founder of Beep
ticket items.
Marketing — London: I just wish data
Adam Greenfield: One of the things that
speeds were faster, and I wish data was Mobile commerce could one day re-
is absolutely brilliant that emerges from
more reliable, and I wish I could get data place checks, credit cards, perhaps even
user practice in sub-Saharan Africa, actu-
wherever I go. So on a train, which is a printed money. That means the network
ally, is that you can use minutes, unused
time when I have time on my hands, I do infrastructure must scale to spot the high
minutes, as currency and transfer those
use my phone, but the 3G network drops growth in transactions.
back and forth between friends. So it’s
in and out and it’s very difficult for me to
this absolutely ingenious adaptation. Doug Jaeger: This is my wallet. It is a
actually do anything online.
free-tag recycled wallet, and in it, it has
Jonathan MacDonald, UK Sales, Blyk
Joel Challenger, interpreter and just all kinds of gross stuff. But this stuff,
— London: In terms of being advanced,
translator — Tokyo: When I’m doing there’s no record of it. If it’s gone, to re-
in South Africa there is a vast amount of
a transaction which involves entering place it is like, you know, five days’ worth
people who get their wages solely paid
credit card numbers and transferring of work. You know, if this thing gets
onto their phone account. You’ve got
money, I want it to be done quickly, I destroyed, I plug it into my computer and
100%-secure networks where you’re the
want to get it out of the way and I want hit restore.
only person that can access your infor-
to know that it’s gone through. And I feel
mation, and all of the consumers who are Gabriel Brown: In Part 3 of this series
that the longer it’s taking to process, the
involved in that know that their money is we’ll study more of the technical
more vulnerable, you know, it is to being
entirely secured. challenges faced by mobile operators
hacked or stolen.
as they seek to unleash this lucrative
Gabriel Brown: Mobile commerce is not
John Gauntt: The critical pieces all opportunity and prepare for tomorrow’s
simply e-commerce on a phone. The
bubble up to one thing: an end-to-end mobile commerce invasion.
industry must learn from past mistakes.
echo system that is extraordinarily com-
Security and data integrity are still major plex, but also completely hidden from
hurdles. A Forrester Research survey the consumer. It boils down to a simple
found that 57% of U.S. and Canadian sentence: M-commerce makes your life
respondents were concerned about the more convenient, and then you can do
security of data when using their phones fun things.

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