01 February 2008

Tech Talk 2: Shaleen Sharma,JWT Delhi

Mobility and Web Services - Challenges and Opportunities in Developing Countries

From Japan to US, from Africa to Asia, there exists a fanatic optimism about the increasing power of the internet. It seems that just like advances in micro processing transformed computing experience, the internet browser will change the very way people have been using internet till now. (Primarily E mail and search).

There has been a lot of noise about the next killer apps residing in the browser. The likes of Google are now offering integrated office solutions (like spreadsheets, word and power point) completely online. Software itself is no longer peddled shrink wrapped on IT stores, it is following a pay-per-use services delivery model which pundits are calling SAAS-Software as a service.

To my mind, internet itself, more than being a consumer medium, is a “Great services and information framework.” Mobility too essentially started as a service, till entertainment and computing applications converged on the same.
One wonders, what is the next tidal wave of evolution, for mobility and for the internet? Can the internet drive mobility adoption or mobility facilitate quicker internet penetration? These questions are all the more relevant, for developing countries like India who’s technology adoption will not be linear and is expected to benefit from the “experience curve” of the developed world.

Of course, the convergence of mobility and web services is going to open new opportunities, but the players looking to leverage those opportunities will have to negotiate through some tough challenges-cultural and economic.
While in Western Europe and US, high in-home broadband penetration levels have led consumers to view web services completely differently. The experience there has to be larger, richer, bigger, and quicker. In developed mobile societies of Asia like Japan and South Korea, though in home broadband levels are roughly similar (or even more) than those in the West, consumers have taken to mobile broadband and mobile web services far more excitedly. May be this is cultural or may be this is because the overall mobile services infrastructure there has evolved faster and better. Just the other day we heard that in Japan notebook sales declined for three straight quarters as people are downloading most of the web applications (entertainment, e mail etc) and using services (billings and bookings etc) on other web compatible appliances. High Definition Televisions and Hand Held phones were the dominant segment of such appliances.

In India, the driver of web services roll out through mobile phones is primarily going to be economic. Critics concur that India’s rate of tech adoption across categories is a little sloppy. But what most people fail to understand is that whenever a technology has been made economically affordable, Indians have grabbed it. This is evident from automobiles technology (where Tata Nano has created such a splash in popular consciousness) to LCD screens to mobile phone tariffs itself. (Folklore has it that since the time tariffs have been coming down, rate of growth is going up by a factor of 4).

Some key learnings have come to us from the African continent. It has been estimated that the “Unbanked” (people who have no bank accounts because of very little savings generated or illiteracy) are sitting on a liquid capital of around a trillion dollars. Cellular Services Providers in Africa have been aware of this opportunity. MTN and Vodafone are successfully experimenting in providing mobile banking solutions to all such people. One can have a mobile account, and all the financial activities one undertakes can be routed through their mobile bills. This is both convenient and economical.

In countries like India however, financial web services can be the killer app for their adoption, initially, especially amongst the mobile segment at the lower end. Just as e mail was the killer app for web’s adoption, basic, transaction based financial services can drive mobile penetration as well as internet adoption in India.But just like the EU, India is a federation of markets and consumer segments. Consumers at the upper end of the spectrum might not be so gung ho about financial services being delivered through the mobile portal. Many Indians in the Upper SEC ranks, rate security much above convenience and even economy. But what will drive these guys will be differentiated content. For certain segments it could be gaming, for some others it could be music and for some video.
By differentiated I mean exclusive- content that is not available elsewhere on other gateways or portals like television stations, radio or even websites.
Web services could also proffer information or opinion that is not available outside of the mobile cloud (embedded in the handset or relayed by the service provider)

All of this brings us to two critical questions. One definitely is that if it happens, and eventually it will who will “control” the last mile, i.e the consumer relationship. Arun Sarin, CEO of Vodafone was recently asked about the handset vendor-services provider relationship status in the wake of Nokia launching its web services foray. Mr. Sarin made it quite clear that the service providers believed that they control the relationship with the consumer and there is no way they would want to loosen their grip on that! The consumer mobile bill is the greatest instrument they have, and they have to continue to generate it.
I would tend to think so too! And I believe that is their rightful domain as well. And may be that is why, from AT&T to T-Mobile to Vodafone everybody is more interested in integrating “mobile content and services” in their business architecture, across countries. It will be nice to see how Nokia who says that web services will be the mainstay of its future strategy handles this fundamental conflict.
In hindsight, Apple looks smarter! They came out with web content and services portal in the form of i-tunes, and then launched the handset. Could Nokia have done the same? In hindsight, yes!
But may be what handset manufacturers like Nokia can do, is pick up areas where service providers can not effectively provide web services. This can be done through exclusive tie in like the one they did with Universal Music, where Nokia music phones will come with some embedded tracks, and Universal taking a cut from the overall sales. But such web services will be asynchronous and not live.

May be consumers will tell what mode of web services they will adopt?! May be Apple was smarter or may be Nokia is!

1 comment:

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