Gartner Says Number of Mobile Payment Users Worldwide to Increase 70 Percent in 2009

STAMFORD, Conn., May 28, 2009 —


The mobile payment industry will experience steady growth, as the number of mobile payment users worldwide will total 73.4 million in 2009, up 70.4 percent from 2008 when there were 43.1 million users, according to Gartner, Inc.

Gartner predicts that the number of mobile payment users will reach more than 190 million in 2012, representing more than 3 percent of total mobile users worldwide and attaining a level at which it will be considered "mainstream."

“Momentum in the mobile payment market gathered further in 2008 with a number of high-profile launches of mobile money transfer services in multiple markets, participation of major global institutions in near-field communication (NFC) payment trials, as well as new payment solutions entering the market,” said Sandy Shen, research director at Gartner. “However, at the same time, security concerns, an inadequate ‘ecosystem’ and undefined areas in banking regulations remain challenges for mobile payment.”

Gartner defines a mobile payment as paying for a product or service using mobile technology such as a short message service (SMS), Wireless Application Protocol (WAP), Unstructured Supplementary Service Data (USSD) and NFC. It includes transactions that use banking instruments such as cash, bank accounts or debit and credit cards, as well as noncarrier stored value accounts, such as travel cards, gift cards or Paypal. It does not include transactions that use mobile operators’ billing systems, such as purchase of mobile content or telebanking by mobile to the service center via an interactive voice response (IVR) system.

“Mobile payment has very different user cases and impact on developing markets to that of developed markets,” Ms. Shen said. “In developing markets, together with mobile banking, it allows people to use financial services in a more-efficient way — and sometimes the only way — at more-affordable costs, and can greatly improve standards of living. In developed markets, mobile is more of an extension of the existing payment infrastructure that allows people to deal with their financial needs on the go and in a timely fashion.”

This disparity leads to the presence of different products in different markets. For example, many services in the U.S. rely on a full browser and credit card, but this won’t work in developing markets, as many people don’t even have a bank account or bank card. On the other hand, Ms. Shen said USSD banking wouldn’t be acceptable in the U.S. as mobile operators have never made use of this for customer services and users may find it very awkward to work with.

In terms of both number of users and transaction volumes, Gartner expects Asia/Pacific and Japan to maintain a larger share of the market through 2012. While mobile payment penetration in Western Europe is expected to rise from 0.9 percent in 2009 to 2.5 percent in 2012, and from 1.7 percent to 3 percent in North America; penetration in Asia/Pacific and Japan will rise from 2 percent in 2009 to 3.8 percent in 2012. Mobile payment penetration in Eastern Europe, the Middle East and Africa (EMEA) and Latin America is also expected to exceed 3 percent by 2012.

“The most profound impact of mobile banking and payment services is that they provide the nonbanking population with access to modern financial services, giving them tools to improve their living standards,” said Ms. Shen. “For mobile operators, mobile payment can help attract and retain users and generate new revenue streams. For financial institutions, mobile payment is an opportunity to reach users who may have been previously unreachable, due to a lack of retail infrastructure.”

Ms. Shen said that overall, the market will see fragmentation in both technologies and business models, meaning that services need to be adapted for individual markets — even when deployed with the same partners — and that long lead times will be needed for deployment. This, together with the time required for creating user awareness, leads Gartner to believe that mobile payment is at least three years away from entering the mainstream market.

Additional information is available in the Gartner report “Dataquest Insight: Mobile Payment, 2007-2012." The report is available on Gartner’s Web site at http://www.gartner.com/DisplayDocument?ref=g_search&id=950812&subref=simplesearch#h30.

Switzerland frees-up 900MHz spectrum for 3G

Switzerland's Federal Communications Commission (ComCom) has overhauled its spectrum allocation rules to allow the country's mobile operators to use 900MHz spectrum for 3G use. Under the new changes, the regulator will allow spectrum - which was previously reserved for GSM use - to be used on a technology-neutral basis, allowing it to be used for 3G. The change has required reallocation of the existing spectrum held by three of the country's mobile operators. Orange Switzerland, which is deemed to own too little 900MHz spectrum, will receive additional 900MHz frequencies from rivals Sunrise and Swisscom. In return, Orange must give up 1800MHz spectrum to its two rivals. The 900MHz frequencies are seen as valuable to operators as they allow larger radio cells and offer greater in-building coverage.
ComCom also announced that it has renewed the existing GSM licenses held by Orange, Sunrise and Swisscom until the end of 2013.This means that all four of the country's GSM licenses (Swisscom, Sunrise, Orange and In&Phone) will now expire at the same time. The move is designed to help the regulator with a current review of all the mobile spectrum that will become free in 2013 or 2016. The review also includes proposals to release the so-called 'digital dividend' spectrum (790MHz to 862MHz) for use by the country's mobile operators from 2015 at the latest.

China Mobile to launch HTC Android device

China Mobile will next month launch an Android-based handset from HTC, according to reports in the Financial Times and Wall Street Journal. Both reports state the device will be a customised version of HTC's Magic handset, already offered by Vodafone. The Wall Street Journal speculates that the device will retail for about CNY5,000 (US$730). The move would give Google's Android operating system a presence in the world's largest mobile market, although this development is not unexpected; in February, Mobile Business Briefing reported in an exclusive interview with China Mobile's chairman, Wang Jianzhou, that the operator is "heading the development of a mobile operating system called Open Mobile System" based on Android and running over its 3G TD-SCDMA network. The emergence of HTC as device supplier is a potential surprise, however, as Lenovo has previously been tipped to be the first manufacturer of a China Mobile/Android device (previously dubbed the 'OPhone').
Separately, China Mobile and ST-Ericsson announced today they have struck an agreement for the supply of chipsets that aims to help push TD-SCDMA technology to the mass market in the country. The silicon will be used in the commercial launch of handsets by four device vendors between now and the end of next year, targeting both high-end and low-cost handsets. The supply of a wide variety of TD-SCDMA handsets is deemed crucial to success of the 3G technology, especially as China Mobile is competing against globally established 3G standards WCDMA (China Unicom) and EV-DO (China Telecom).

Nokia rolls out high-profile Ovi Store

Nokia announced today that its much-anticipated online software and content store, Ovi Store, has launched on time and is now available across more than 50 Nokia devices. A statement from the world's largest handset vendor said that customers in selected markets can update their devices with the Ovi Store mobile application by selecting the Ovi Store icon in the Download! folder on their device. The mobile client is available in English, German, Italian, Russian and Spanish and supports operator billing in Australia, Germany, Ireland, Italy, Russia, Singapore, Spain and the UK. Although no mention was made of operator billing support in the US, Nokia did announce that AT&T plans to make Ovi Store available to its customers in the US later this year. Nokia's forthcoming flagship device - the Nokia N97, touted for launch next month - will also support the store.
First unveiled at the GSMA Mobile World Congress last February and pegged for a May launch, Nokia's Ovi Store is its attempt to follow the huge success of Apple's App Store, which currently offers 40,000 apps and has recently hit the 1 billion download milestone. Nokia did not confirm recent reports suggesting its store is the biggest application store debut to date, with a reported catalogue of over 20,000 items, but did note that "thousands of the content industry's biggest names along with independent application developers are distributing their media, applications and games through Ovi Store." Ben Wood, research director at CCS Insight, told Reuters that "Nokia's Ovi Store is a step in the right direction but Apple is still the king of the hill when it comes to selling applications... Nokia is going to have to spend a small fortune on marketing to make consumers aware of what it is offering." Global Crown analyst Tero Kuittinen issued a stronger warning: "Ovi Store is in some ways the last castle for Nokia; both N-Gage and 'Comes with Music' are industry laughing stocks."

US mobile market update 1Q09

• Verizon acquired Alltel, a regional operator, with US$28.1 billion and became No. 1.
• Sprint remained in financial trouble and churn.
• T-Mobile reported the lowest ARPU of the big four.

Operator	Connections	Market Share	Annual Growth	Revenues (US$M	EBITDA (US$M	ARPU (US$)
Verizon	86.6M	31.56%	28.84%	15,122	6,020	50.74
AT&T	78.2M	28.52%	9.62%	12,860	4,775	50.11
Sprint	49.1M	17.89%	-6.97%	7,035	1,449	53.91
T-Mobile	33.2M	12.10%	7.80%	5,395	1,384	47.00
(Other)	8.9M	3.26%	5.25%	-	-	-
US Cellular	6.2M	2.27%	0.35%	1,053	252	52.54
MetroPCS	6.1M	2.21%	37.06%	795	199	40.40
Leap Wireless	4.3M	1.58%	40.21%	587	97	42.21
Centennial Wireless	0.7M	0.24%	0.23%	147	58	67.00
Cincinnati Bell Wireless	0.5M	0.20%	-5.29%	76	18	43.21
nTelos	0.4M	0.16 %	5.51%	109	43	54.58
Total	274.3M		5.84%

USA Mobile Connections, 1Q09
Source: Wireless Intelligence

Full story.

Engadget Labs: The best mobile data carrier in America

Full report at http://www.engadget.com/2009/05/26/engadget-labs-the-best-mobile-broadband-carrier-in-america/
by Darren Murph, posted May 26th 2009 at 4:41PM

Some findings:

• Every major plan runs right at $60 per month for 5GB of throughput.
• Sprint is the only carrier that avoids dinging you with an activation fee.
• AT&T and T-Mobile are the only two with true worldwide roaming support (GSM bands).
• International data roaming is absurdly expensive; you're infinitely better off just buying a prepaid data card in the country you travel to.
• AT&T offers the most data card options; T-Mobile offers the least (just one).
• Even domestic overage charges are pricey; don't buy a data card to act as your primary ISP -- this stuff is for backup / traveling only.
• Sprint will cut you a $9.99 discount if you bundle a data card in with a phone in a Simply Everything package.

Sadly for consumers, we can't compare these options on monthly throughput allowance or monthly rate plans. In a fashion that only a colluder could love, the big four here in America all have matching monthly rate plans with matching monthly caps (5GB). So much for choice, right? In our view, it's also somewhat frivolous to compare the offerings on international compatibility considering that you're always better off just picking up a prepaid option from a local operator upon your arrival overseas.
So, what are we left with? Raw speed figures and coverage, really. Based on coverage alone, we'd select Verizon first (from a national standpoint) and AT&T second. Naturally, you'll need to visit those links in the 'Coverage' section to see which carrier is superior in your neck of the woods. Unfortunately, Verizon was the slowest of the bunch (albeit not by much), and AT&T was the victor by a country mile in terms of Kbps. If it's speed you're after (and really, who's not after speed?), we can't help but recommend AT&T -- if you're within one of the carrier's limited 3G areas. The other caveat here is that for whatever reason, AT&T's reliability -- particularly in densely populated areas -- has been disreputably suspect. If you're an existing AT&T user and can't seem to get a solid 3G signal on your smartphone where you're at, don't expect a LaptopConnect card to act any differently. Frankly, that goes for all carriers. Aside from T-Mobile, which just doesn't have the coverage to compete right now, you can hardly go wrong with any of these options. But as our speed tests have shown, you'd need a darn good excuse to avoid AT&T if the coverage and reliability is right.

Nokia takes Internet phones to emerging markets

Nokia today launched three new handsets designed to bring Internet services to emerging markets. Included in the offering is the Nokia 2730 classic , priced at EUR80, which the world's largest handset vendor claims is its "most affordable 3G phone." It is expected to start shipping in the third quarter of 2009. The Nokia 2720 fold is a fold-phone boasting email and Internet connectivity, and will be offered with Nokia Life Tools in select markets. The 2720 is expected to begin shipping in the third quarter for an estimated retail price of EUR55 before subsidies and taxes. Meanwhile, Nokia's 7020 is marketed as "a fashionable fold phone that uses light, colour and metal finishes to convey personal style." Incorporating a 2 megapixel camera, the device will ship in the fourth-quarter this year for an estimated retail price of EUR90 before subsidies and taxes.

Nokia's announcement today is its latest effort to ramp up its emerging markets strategy. In November the company unveiled two emerging market services - Ovi Mail and Nokia Life Tools - that are supported by the three new handsets. Ovi Mail provides the ability to create an email account without the need to use a personal computer, whilst Nokia Life Tools is aimed at providing agriculture information and education services for rural and small town communities in emerging markets.

Nokia claims to have carried out research declaring that nearly half of emerging market customers would rather connect to the Internet using a mobile phone than a PC.



Read more.
Some specs: http://experts.thelink.co.uk/2009/05/19/nokia-2730-classic-%E2%80%93-the-world%E2%80%99s-cheapest-3g-phone/
http://www.phonesreview.co.uk/2009/05/19/nokia-announces-2720-2730-and-7020-low-end-handsets/

New French 3G license tender to stretch into 2010

The French government has confirmed that it will launch the tender for the country's long-awaited fourth 3G license this summer, but warned that the process would not be completed by year-end. According to a Dow Jones Newswires report, government spokesman and industry minister Luc Chatel said in a TV interview that the government has asked an official body to evaluate the right price for the license. The body is expected to report opinion within the next couple of weeks. "We want to be certain [that the state will not lose out]" said Chatel, adding that a fourth mobile operator "won't be designated before the end of the year" due to the delays linked to the tender process. The government had earlier valued the license at around EUR206 million, the report says.
A leading contender for the license is thought to be French broadband provider Iliad, which has previously said it will invest EUR1 billion to build a network covering 90 percent of the country's population if it wins the license. Dow Jones Newswires reports today that privately-held cable operator Numericableis is also mulling a bid for the frequencies. The French government is keen to issue further 3G licenses in order to boost competition in its domestic 3G market, which remains dominated by just three operators: France Telecom's Orange, SFR and Bouygues. An attempt in 2007 to auction the fourth license was abandoned after it generated just one bid - from Iliad subsidiary Free Mobile - that was deemed too low.

Read more.

Virgin Mobile USA reports 301% rise in Q1 profit

Virgin Mobile USA, the country's largest MVNO, has reported better-than-expected first-quarter profit as the firm's prepaid and hybrid tariffs appeared to resonate with increasingly cost-conscious consumers. Net income rose 301 percent to US$19.1 million (US$0.19 a share) compared to US$4.7 million (US$0.07 a share) in 1Q08, a period before Virgin Mobile's acquisition of rival MVNO Helio in August 2008. Operating revenue rose 2 percent to US$337.3 million. According to Reuters, analysts on average had expected earnings of US$0.10 a share, excluding items, on revenue of US$359.4 million. The MVNO added over 600,000 new customers in the quarter (gross) for a total customer base of 5.2 million. Churn was reduced from 5.1 percent in the year earlier period to 4.8 percent, but ARPU fell slightly from US$20.14 to US$20.08.
In a statement, CEO Dan Schulman talked up the success of Virgin Mobile's hybrid plans, which accounted for 55 percent of gross customer additions in the quarter. The hybrid plans offer customers a fixed number of minutes per month without a contract. "We also brought to the market differentiated text messaging bundles and our 'Pink Slip Protection' programme [a payment protection plan for contract customers that lose their jobs] to help our customers weather the current economic storm," said Schulman. The company also launched a US$49.99 unlimited plan last month in order to target US consumers that are scaling down their spending due to the credit crunch. The firm increased its guidance for adjusted EBITDA and free cash flow for 2009. Reuters reports that its share price rose 29 percent in response to the results.

Read more.

DiGi launches mobile broadband in Sabah and Penang

According to The Edge Daily, Malaysian cellco DiGi Telecommunications will set aside up to MYR150 million (USD42.4 million) of its total capital expenditure over the next three years for investment in its HSPA network and services in the Sabah and Penang regions. The plans were unveiled following the official launch of the operator’s 3G broadband services in the two regions. DiGi noted that at launch it had coverage of 44% and 31% of the population in the Kota Kinabalu region and the island of Penang respectively.

However, the cellco currently only offers HSPA-based internet services via a datacard option, with Johan Dennelind, CEO of DiGi, noting: ‘While our broadband service is only available on PC and laptops for now, we look forward to start offering 3G voice and data services on mobile phones as soon as we have expanded our 3G coverage in our bid to capture our fair share of the broadband market in Malaysia’.

According to TeleGeography’s GlobalComms database, DiGi has forecast CAPEX for 2009 to exceed MYR1.1 billion and had earmarked around 30% of that for 3G infrastructure development. Mr Dennelind indicated that the expansion to Sabah and Penang comes following the high level of demand in the Klang Valley, where the operator launched UMTS services two month ago. DiGi aims to offer its mobile broadband services in more than 1,000 zones by the end of 2009, and the cellco will initially focus on deployment in urban areas.

Verizon Wireless sharpens LTE roadmap

Verizon Wireless this week provided further details on timescale for deployment of its LTE network. In a conference call Wednesday, chief executive Lowell McAdam said the network will launch commercially in 20-30 markets in the second half of 2010, with nationwide buildout complete in late 2013 to early 2014. Meanwhile, PC Mag reports that a small group of Verizon testers will get access to LTE this year, with the operator turning on one "pre-commercial" network on the east coast and one on the west coast during 2009.

Verizon also said it expects average speeds on the network to be between 8Mb/s and 12Mb/s downstream, faster than Sprint's WiMAX network but much lower than the 'theoretical peak' speeds previously touted for the network. Earlier this week Verizon Wireless said it will use Gemalto's over-the-air platform and microprocessor smart card to manage customer information exchanges on the LTE network, and also selected Giesecke & Devrient to provide Java-based SIM cards for devices. Verizon could become the first commercial LTE operator in the world. US rivals AT&T and MetroPCS are planning to launch LTE networks, in 2011 and 2010, respectively.

Read more.

UK plans deal on mobile broadband spectrum

The UK has unveiled plans to potentially settle a long-running dispute between its mobile operators regarding the re-farming of 900MHz 2G spectrum for mobile broadband use. Reuters reports today that the UK's Independent Spectrum Broker has proposed that operators be given a spectrum cap, meaning that they could hold onto the spectrum they own but would need to sell it before buying any more. The development is effectively a compromise that would allow the UK government to pursue its 'Digital Britain' broadband initiative without forcing some operators to hand over spectrum to competitors. The dispute stretches back to a proposal by UK regulator Ofcom in 2007 that ordered O2 UK and Vodafone UK to transfer some of their 900MHz spectrum to rivals, a plan reportedly strongly opposed by the two operators. Ofcom proposed at the time that the 900MHz spectrum could be auctioned off to their competitors, Orange UK, T-Mobile UK and 3 UK, for mobile broadband use.
The dispute escalated following the introduction of the 'Digital Britain' initiative earlier this year, which is aiming for every UK household to have access to broadband by 2012 and proposes the use of mobile broadband to connect rural areas. The 900MHz spectrum is deemed more suitable for mobile broadband than 1800MHz spectrum - the other frequency band used for 2G services - as the lower frequencies travel further and need fewer base stations and masts. However, while this week's development means that O2 UK and Vodafone UK could hold onto their existing 900MHz spectrum, they would need to sell some in order to buy new spectrum freed-up by the switchover from analogue to digital TV. According to Reuters, the UK plans to auction new spectrum - in the 800MHz and 2.6GHz frequency bands - next year.

Read more.

New Zealand to get third mobile network in August

New Zealand's mobile market is to gain a long-awaited third operator with the launch of NZ Communications' new network in August. Rebranded 2degrees, the company aims to provide 2G GSM and 3G HSPA technology to 97 percent of New Zealanders and will cut prices to challenge the sector's two dominant players, Vodafone and Telecom New Zealand. "Most markets in the world have at least three network operators and quite a number have more," said 2degrees CEO Mike Reynolds in a statement. "There is no other comparable country that has to suffer such poor value in the mobile market and that can be attributed to a lack of a vibrant competitive environment... Kiwis are tired of being locked into lengthy contracts and being stung with high prices to call friends on competing networks. They want to take back control of how much they spend and who they call."
The launch of the new network was initially expected last October but reportedly suffered delays due to problems with striking co-location deals with its rivals for the installation of network equipment. However, today's statement says the operator "has committed over NZD250 million (US$151 million) and is building a 2G and 3G network that is HSPA+ capable." China's Huawei is the network equipment supplier. The operator has also signed a national roaming agreement with Vodafone for areas where it does not have its own mobile network coverage. New Zealand's mobile market is a duopoly, with market-leader Vodafone controlling 52 percent market share. Total mobile subscriber count in the country stands at 4.8 million, according to Wireless Intelligence. Although 3G WCDMA technology only accounts for 25 percent of connections, recent aggressive expansion plans from Telecom NZ and Vodafone (as well as the new launch of 2degrees) look set to make the country a hotbed of future mobile broadband activity.


Read more.

Cisco gives mobile WiMAX backing to Clearwire

US WiMAX operator Clearwire received a major fillip yesterday, announcing that networking giant Cisco is to be its national IP NGN core infrastructure provider and will also supply mobile WiMAX devices targeting consumers and enterprises. Cisco's move marks its first major push into the WiMAX space. Cisco's pledge to develop WiMAX devices is of particular significance to the market, as the world's largest handset vendor, Nokia, recently pulled the plug on its sole WiMAX device. Clearwire currently offers mobile WiMAX services in Baltimore and Portland and is aiming to extend this to more than 80 markets across the US by the end of 2010. Cisco and Clearwire are not strangers, having previously announced plans to work together on development of a WiMAX network in Silicon Valley aimed at encouraging software developers in the region to create new applications for the technology. No mention was made yesterday of specific investment from Cisco in Clearwire, although the WiMAX operator has already received a US$3.2 billion cash injection from Comcast, Intel, Time Warner Cable, Google and Bright House Networks. With the majority of the world's mobile operators and vendors appearing to move towards LTE as their technology of choice for next-generation mobile communications, the support of Cisco could prove timely to the mobile WiMAX community. However, Clearwire remains bullish on its plans to create a national mobile WiMAX network in the US. It intends to spend up to US$1.9 billion on extending its network this year, and has made a number of high-profile executive recruitments. Ex-Vodafone Europe CEO, Bill Morrow, was named new Clearwire CEO in March, whilst the company yesterday announced new appointments in the positions of Chief Commercial Officer, Chief Information Officer, and Chief People Officer. Also yesterday, the company announced its first-quarter 2009 results. Clearwire posted a loss of US$71.1 million in the period, or US$0.38 a share, compared with a loss of US$76.4 million, or US$0.41, from a year ago. Sales rose 21 percent to US$62.1 million, with ARPU coming in at US$39.52. Clearwire hit 500,000 subscribers during the first-quarter.

SingTel hit by strong local currency, eyes Asia deals

Singapore's SingTel has hinted at making further acquisitions in Asia to offset slowing growth in its core markets. "SingTel continues to look for new investments in Asia and emerging adjacent markets and will be financially disciplined in its evaluation of these opportunities," said CEO Chua Sock Koong in a statement today announcing the group's fiscal fourth-quarter earnings (ended 31 March 2009). The group reported a 17 percent decline in net profit to SGD903 million (US$618 million), its biggest decline in two years. The results were negatively impacted by the strength of the Singapore dollar against currencies in other markets where it operates, notably in Australia where SingTel controls the country's second-placed operator, Optus. While revenue in local currency terms increased 8.7 percent in Australia and 13 percent in Singapore, the group's operating revenue in the quarter fell 5.1 percent to SGD3.57 billion as a result of the steep 21 percent decline in the Australian dollar against the Singapore dollar from a year ago.
In its two wholly-owned markets, SingTel added 34,000 mobile customers in the quarter in Singapore, reaching 2.98 million mobile customers in total, while 652,000 were added in Australia (Optus) to reach 7.79 million in total. The star performer in its Regional Mobile Associates unit - which includes its stakes in various other markets - was India's Bharti (in which SingTel owns a 34 percent stake), which added 31.9 million new mobile customers from a year ago and recorded an 18 percent rise in pre-tax ordinary profit in Indian rupee terms and a 1.4 percent rise in Singapore dollar terms to SGD225 million. However, profits at Indonesia's Telkomsel (a 35 percent stake) fell to SGD163 million, a 40.6 million decline in Singapore dollar terms and a 30.6 percent decline in local currency terms. SingTel gave no specific information on its acquisition targets but hinted that market consolidation was expected in Pakistan, where it owns 30 percent of the country's fourth-largest mobile operator, Warid.

Read more.