Category Archives: Asia Pacific

What’s behind Mobile Payment success in Asia?

When you look to Asia to replicate the success of Mobile Payments compared to other regions, you need to know what is behind. The success comes from two totally disparate markets that have little in common among themselves, and with the western world.

1. Emerging Countries.
A few years ago I visited a good customer in Cambodia. They were the leading mobile operator in country and we were discussing the upgrade of the Prepaid platform we provided. I was surprised when our country manager took me to meet the CFO and not the CTO or CIO. Why was the Prepaid platform under the management of  Finance? The CFO himself answered: The country had a total of 40.000 bank accounts, while they already had 2 million prepaid mobile users and growing. In Cambodia everyone had a mobile phone, but only a few of them could afford a bank account. Their Prepaid Accounts had transformed into Mobile Wallets.  People had started to use Airtime Transfers as a method of payment. The mobile operator was also becoming a new sort of ‘bank.’  The technical solution was based on simple USSD transactions.

The story shows that a large number of Prepaid users with ARPU‘s under $10/month will make the statistics to Mobile Payment users.

2. Japan.
I lived a few months in Tokyo. A few days after you land you realize you need a Suica card. The Suica card is a RFID wallet card that is ultra convenient when you use the wonderful railway and metro system in Tokyo. Taxis are very expensive and having a car too. Soon you notice everyone has one Suica card, only if to use the public transport system.

With eveyone carrying a Suica card, you understand why most convenient stores and any merchant that receives small payments in cash accepts it.

On the other side, the handset ecosystem in Japan is totally different from the rest of the World.  The handsets that Docomo and KDDI provides are still specific for Japan (only after iPhone 4, Apple is making significant inroads in market share). Therefore for phones to support Suica, it was only a matter of Docomo and KDDI agreeing with Suica to link their balances.

In short…
Mobile Wallets in emerging market are filling a need we might not have in western countries.

You can learn from Japan experience. Just be aware it is a market with many specificities, and that a big driver for adoption was the wide use of public transport.

key-facts-about-mobile-payments
You will find more statistics at Statista

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China’s Entrepreneurship Revolution

A clip from the new documentary film Win in China, by Robert Compton, shows how fast China is changing and how hundred of thousands of entrepreneurs are driving the growth of the second economy of the World.

At the same time, China’s state-own large corporations are buying foreign companies, such as Volvo’s, as the Economist reports this week.

Maybe learning some Chinese is not bad after all…

In CommunicAsia 2009: Making Mobile TV Work

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It is more than one motnh ago that I was in CommunicAsia  for a Mobile TV panel. Here are the main points we discussed about how to make the business case for Mobile TV work.

  • Free-to-Air channels are a must to drive adoption of Mobile TV into the mainstream, as Japan One Seg, Korea T-DMB and even the DVB-H Italian case show. More than 20 million Japanese watch TV on a phone. As of today, 85 % of the new handsets sold in Japan have a One Seg tuner. Even the iPhone has an One Seg tuner accesory (see picture)
  • “Free” creates a large audience that can be monetized through subscriptions, advertisement and transactions (VOD, Catch-up TV, cross-selling). It is the economics of free, common in Internet and Software, applied to Mobile TV.
  • There is a need for a next-gen Mobile TV that puts together Broadcast and Unicast technologies. Broadcast enables FTA channels at zero marginal cost (it is the same cost to serve one customer than one million) and it is efficient for premium mass audience channels like sports channels. Meantime, Unicast provides unlimited number of channels for premium, niche/long tail, VOD and catch-up TV that can be monetize as subscriptions or pay-per-download. The 3G network also enables interactive services, like EPGs, audience monitoring, interactive ads, or interactions with social network (see what my friend watch, or “watch and chat”), that give extra chance for monetization.
  • Focus on high-end devices, like iPhone or ones with TV tuners. Early adopters of these devices are the same early adopters that will watch TV on a mobile. It is a waste to support a large number of mid-range or low-end devices. Mobile TV has not crossed the chasm yet.

1seg-iphone1

Some other curious facts and learning from the Japanese One Seg: Mobile TV experience:

NHK Study: Where people watch mobile TV?
1) At home in a room wo TV 38%, 2) At work/school 26%, 3)While bathing 24% – On train goes in 7th place (17%) tied with at home in a room with a TV!
=>  There are more use cases than just watching TV on the train…

DIMSDRIVE research for Japan:
What people like about Mobile TV: 1) Anywhere, 2) free, 3) simple
What they do not like: 1) Battery, 2) don’t need to watch TV outside, 3) do not want to watch TV on a phone

No More Bing for China

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NYT, GigaOm, and others attribute to the 20th anniversary of Tiananmen the fact that Twitter, Blogsplot, YouTube and many other sites are not accessible from China these days.

Even the brand new Microsoft search engine Bing is now blocked!!

I wonder if the cause of Bing blockage will not have anything to do with the fancy feature of Bing playing video thumbnails as you move the cursor over them. Taking into account that porn is censored in China and that YouTube videos were perfectly watched from Bing (and YouTube is blocked in China since March), there might be an additional reason for Microsoft’s search engine black-out. See the picture above via TechCrunch and put yourself in the shoes of a chinese censor. Wouldn’t you block it too?

China is a country where the collective good is well above individual rights. Chinese perfectly accept to have only one child by law. And Chinese do not mind censorship as long as the system allows the economy and standards of living to keep growing  as they have during the past years. 

Any Chinese who is really interested in bypassing censorship can easily do it with plenty of VPN services available in Internet, like FreeGate. In reality, very few of them care.

In Shanghai, without YouTube

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After a few weeks in Shanghai, I am finally settling and getting used to China, and how crazy they drive in Shanghai.

I have a decent 2Mbps ADSL line at home that works much better than the broadband I was getting from Telekom Malaysia in KL. P2P traffic is not throttled aparently, unlike in Telekom Malaysia, but since 24 March YouTube is blocked in China. Nobody knows officially why, but I am missing the highlights from the Spanish Liga in YouTube, which by the way were harder and harder to find before they were (instantly) removed due to copyright issues.

On the mobile side, almost everybody uses China Mobile in Shanghai. iPhones although not officially launched can be easily acquired in stores (imported from US, Hong-Kong or Singapore) . The iPhone 3G is quite popular and you can see a lot of them in Shanghai, despite 3G in China is not yet available. It will be launched very soon, on 17 May, the International Day of Telecommunications. I was also about to buy a G1, “imported” from T-Mobile, but somehow the Google account was impossible to activate, probably because the hack was blocked.

When the 3G licenses were awarded, the market in China was reorganized around three operators :

  • China Mobile with the Chinese standard TD-SCDMA
  • China Unicom with WCDMA (UMTS)
  • China Telecom with CDMA-EVDO

China Unicom will launch the iPhone 3G, and I would not be surprised if in one year, the number of iPhones in China would surpass those in USA.

On the TV side, Cable TV is very popular, given that it costs 13 RMB per month, or less than 1.5 Euro! for about 50 channels, all Chinese. International content is officially not available, but specially many foreigners “subscribe” to Dream, a Satellite Digital TV provider from Philippines that does include in their packages CNN, BBC, ESPN, HBO, TCM and others.

Regulation for TV and telecommunications is handled by separate bodies, the SARFT for broadcasters and the MII for Telcos. Cable Operators have only recently been allowed to provide broadband services, while Shanghai Telecom launched IPTV for free with some limitations in what TV services they can offer.

SARFT has developed a local standard for Mobile TV called CMMB (China Multimedia Mobile Broadcasting), that after the Beijing Olympics reached more than 1 million users, which is a big success in user adoption, compared to other Mobile TV experiences, specially in Europe and US.  The service is Free-To-Air, and car GPS systems and some Portable Media Players incorporate CMMB tuners. Mobile Phones have also been only recently allowed to incorporate a tuner. With the cost of the chip-set going under $5, SARF expects to reach more than 10 million users in 2010.

The Chinese people can not enjoy YouTube, but anyway most of them do not speak English (yet). In return they can watch a lot of CCTV, enve on the mobile!

Broadband at 1 Gbps in 2012!!

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Koreans and Japanese enjoy today broadband connections at 100 Mbps. Not being enough, the Korean Communications Commission wants to boost the country broadband infrastructure to provide 1 Gbps service in 2012!!

That  is a tenfold increase from today’s speed and in only three years from now. If the objective is achieved, that increase in performance would even surpass Moore’s Law, initially forecasting doubling of computing performance every 18 months, and shortened by the industry to only 12 months. But Koreans would even go faster with this!

This aggressive objective makes the $6 billion broadband stimulus package of Obama’s administration quite shy, if we are to believe that broadband infrastructure is an asset for the economy to drive innovation and growth.

Quoting Om Malik:

Availability of such high-speed connections has allowed Korea to emerge as a leader in the MMO and online gaming industries. Even higher broadband speeds are going to unveil many new usage scenarios, which can lead to new company creation. […] IPTV is another area of focus for KCC. […]

The efforts are part of giving Korean IT infrastructure a boost, according to KCC. The plan is going to cost about $24.6 billion and will create 120,000 jobs. KCC was established because of the convergence of telecom, broadcast and broadband industries.

Image from JoongAng Daily.

What Country Has Most Internet Users?

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According to comScore and echoed by The Economist, China is the country with most Internet users in the World, accounting for 179.7 million users out of one billion worldwide. The United States of America, until recently the leader, has 163 million users. With a far lower Internet penetration in China than the roughly 50% in the US, we will only see China widening its lead in this chart. Clearly a market not to be neglected.

A good way to enter the year of the Ox that just began.

Happy Chinese New Year! Gong Xi Fa Cai!

Picture from The Economist daily charts.