Smart Phones Could Drive New Telecom Business Model

A smartphone is a mobile phone offering advanced capabilities beyond a typical mobile phone, often with PC-like functionality. There is no industry standard definition of a smartphone. For some, a smartphone is a phone that runs complete operating system software providing a standardized interface and platform for application developers. For others, a smartphone is simply a phone with advanced features.

The average person who walks, drives or travels is encumbered with keys, cash, purse or wallet, cell phone, headset, address book, planner, credit cards, and multiple IDs. Throw into that mix receipts, coupons, maps, CDs and other objects, and it’s no wonder so many personal and work-related belongings are lost, stolen or damaged.

The X and Y Generations as well as Baby Boomers would love to travel light with just one device to use as cash or credit for small and large purchases, as well as to conduct phone calls, transfer data, obtain transaction histories, plan activities and verify identities. Merchants could also jump at the opportunity to cut the paper management and inventory headaches of promotions and transactions by pushing discounts and goods over a cell phone, allowing them and their users to automatically track buying trends, transaction histories and receipts.

Consumers trust their banks, but they also trust their cellular providers

Whether banks will aggressively pursue a greater role in content-based services is still unknown, but until now, their focus has been on just payments. “Everything we do has a backbone of payments behind it." There are so many form factors for us to evaluate: keys, phones and how that device gives customer an advantage to make a secure payment. But we see contactless payments an opportunity for our customers to purchase goods or services in places they could not consider before. To use a ubiquitous device as cash, contact management and content downloads could prove quite compelling.”

Each stakeholder in the mobile payments value chain has different roles and objectives. There are three main stakeholders.

• First is the consumer, or phone holder. This person wants something more convenient and easier to use than today’s credit card or ATM transactions.
• Second is the issuer, or the mobile wallet account keeper, which could be either a bank or telecom provider. This party will dictate how the fees and usage structure will evolve.
• Third is the merchant, which can be a physical storefront, a kiosk or an online entity that could market to and manage life cycles of customers in a fully automated fashion.

“All of these parties have to collectively define the business models by balancing the right combination of services that will generate revenue for all of them, while offering value to users at reasonable prices."

Where We Are Now

Motorola shares rose by $0.37 to $21.37 in recent trading after its M-Wallet launch. With M-Wallet, customers download software from the Internet and ostensibly turn their cell phones into online debit cards. They can pay bills, purchase products or transfer money using their cell phones much like ATMs. The software application allows consumers and merchants to download content from the Internet, as well as enabling retailers to send virtual gift cards to customers’ cell phones once consumers opt-in for such promotions. For merchants, M-Wallet might reduce inventory headaches and coupon management, as payments, promotions and receipts will be digitized.

So it could be said that, Smart Phones are becoming a technology present carried over to the future.