3G-powered financial inclusion and gaming as well are both eagerly awaited in India...

With 3G launches by most major operators literally just a couple of months away, excitement is high in the air. For most operators, the government and rural consumers especially, the rollout of financial inclusion via 3G-powered m-wallet and m-banking is much awaited. This is offset by the expectations of the youth, who are expected to be the main takers for 3G content in urban areas in India. They are eagerly awaiting the 3G m-gaming experience-allowing them to play games-for the first time offered simultaneously in India and abroad.

Anytime, Anywhere Money

So how exactly will m-payments help to push 3G? According to Kedar Sohoni, president, Informate Mobile Intelligence, “3G enables faster money transfer, and besides, m-wallet on a prepaid platform also gives vendors the opportunity to interact with customers directly, without involvement of an operator, thereby bringing down total cost for both vendors and customers. This facilitates more m-commerce.”

Another opportunity that m-wallet offers is the P2P transfer of money from one mobile to another which can then be used for apps; or from one m-wallet to another, from an urban to rural area, for transfer of cash, for example. While the main way 3G will help is by creating more avenues of content creation formerly unavailable on a 2G platform, pay-per-use options will also become available with 3G. For example, a video-on-demand can be paid for using m-wallet and consumers need only pay for content used.

According to Nidhi Jain, head, product management, Mobiquity, Mobile Business Solutions, Comviva, “The use of the mobile phone to perform commercial transactions will be especially beneficial in emerging markets like India, where many people have no access to banking services.

As per Frost and Sullivan, mobile transactions in emerging markets will rise from $1.6 bn in 2009 to $3.6 bn in 2014. m-payments mean new revenue streams for operators, lower cash handling costs for banks and faster transaction times for consumers. In India, we have 650 mn mobile subscribers and around 300 mn bank account holders, so half the mobile subscribers don't have a bank account. Thus, we have a tremendous opportunity to leverage the mobility platform here for financial inclusion."

Says Probir Roy, co-founder and executive director of PayMate, “What will help in bringing about a revolution is, a, Telcos-with their ability to offer a triple combo of a low-cost mobile phone, 3G rollout and competitive pressure in data plans. This will make it affordable for the masses to transact over the mobile Internet without worrying about increased bills. And b, banks and solution providers (aggregators and NPCI) need to still ease the overall end user experience.“

Cashing in on the Game

RBI has relaxed mobile banking policies and increased the mobile payment limit to Rs 50,000. This has created a lot of interest amongst large banks and telecom service providers. All these developments augur well for the unbanked segment in India, and given the mobile penetration in India this promises to be one of the most suitable ways to facilitate greater financial inclusiveness in the country. While Airtel was the first operator to cash in on this, tying up with a vendor for innovative offerings, other vendors are not far behind in their plans.

Comviva, for example, has a solution called mobiquity, which it offers for operators to facilitate m-banking and m-commerce for consumers. With 3G coming in, this promises to offer a richer and more seamless experience to consumers. Remarks Jain, “The reach of the mobile is much greater than that of the computer and the Internet. Plus, there is no need to be literate to use the mobile phone, as mobiquity can be provided via IVR and it can support regional languages. Also, mobiquity does not require an internet kiosk-there is more likely to be a mobile network than Internet access in remote locations.“

PayMate has its own mobile wallet, GiftMate, and was one of the first mobile players to get a license. This platform can either be directly leveraged or work in a B2B model where banks and telcos issue their own branded or co-badged e-wallets; can be topped up via net banking or credit card or even ATM; and all the base requirements of KYC would be taken care of. Advanced talks are on with both categories to take on any entrant.

Not wanting to lose out on revenues due to direct dealings between vendors and customers, operators will no doubt step on the heat. According to Sohoni, “With more options and channels for direct payment and more content options at attractive prices, operators' revenues will come under threat unless they launch their own m-wallet/m-payment option. Airtel has announced its own m-wallet, probably keeping this threat in mind-which is one way to prevent the company's shares from falling in terms of content, and other operators may also follow suit offering content on their own.”

The 3G Edge

So what are some of the unique advantages of 3G that would drive m-payments? According to Vish Iyer, VP, SP, Cisco India & SAARC, “Security and privacy are going to be two hot buttons or enablers that will drive the proliferation of the mobile payment system. 3G will provide increased bandwidth, which will enhance user experience and enable smooth transactions on mobile phones. The traditional problems of failure to complete transactions is expected to decrease with the advent of 3G. 3G will also see operators investing in high-end technologies which will help solve interoperability issues between banks, application service providers and mobile operator's platforms. Cisco for example, is enabling service provider's to move into an all IP platform where voice, video and data get converged into a single system.”

According to Naveen Surya, MD, Itz Cash Card, “M-wallet, which is a part of m-commerce or mobile payment products would make multiple services available at least cost and high convenience and these services include all financial services like insurance, investment, etc, thus driving financial inclusion to other critical players in the ecosystem-regulators (like IRDA/SEBI), industry players (insurance companies, mutual funds, etc), and also provide adequate support by introducing the right products for the segment.”

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Challenges Ahead

Customer awareness and education is key for this category, and the right incentives, in the form of automatic or simple registration for the service at the time of opening a new account or even migrating the current Internet banking or ATM user into it are useful first steps. But that by itself is not enough.

According to Jain, “Some of the key prerequisites are a broad regulatory environment that supports the use of mobile financial services, enforceable financial contracts and the fostering of widespread access to telecom policies, in addition privacy and data security must be ensured. Telecom companies will have to be better equipped to handle cash management and disbursement and must forge partnerships with banks to efficiently handle these areas of operations. Similarly, banks must exploit the distribution reach of mobile networks to penetrate unbanked areas.”

Will 3G Really Make a Difference?

There are those that believe that 3G will not make a big difference to the gaming experience in India at first. Explains Samir Bangara, Indiagames, “Only 10-15% of 3G will be used for data, most of it will be for voice. 3G penetration will be 10% of total subscriber base, and the base of the pyramid will drive growth in India, which will be 2.5G. Thus, while this base of the pyramid gets higher bandwidth with 3G coming in, 3G users in urban areas will get a higher quality format game like the one abroad, while for the majority of 2.5G users, the same game will be supplied in a lesser-quality format. Content will be the same, but the user experience is what will differ in a 3G environment. Also, with increased bandwidth on the mobile, multi-player games in real-time will become a reality. Customers will pay more for games and content-as with better quality, better games will be offered. Same games can be offered on different speeds with slight differences, standard and higher-end version. We have tied-up with a lot of 3G operators for gaming, and we currently run the Idea games station, as a managed services provider.”

Indeed, taking from experience in other markets like Europe, Korea and Japan, active multiplayer games in real time are the in-thing. Jump Games-the largest Indian publisher globally for smart phones-is creating co-branded IPs with some of the largest console makers to create an engaging experience on 3G-ready handsest, taking the experience from 3G carriers in the US, UK and other parts of Asia. Meanwhile back home, Nazara Technologies has already tied up with MTNL on 50/50 revenue sharing.

According to Nitish Mittersain, CEO of Nazara Technologies, “With 3G round the corner, the mobile gaming experience is going to become much richer, and we have aggressive plans to drive this change. However, 3G enabled mobile gaming will take time to become as popular as the regular mobile games. It will also be an expensive affair as the 3G equipped mobile handsets will be quite costly and may not easily be adaptable in the rural market. But we will definitely look forward to tap the opportunities that 3G mobile gaming will throw up in the rural areas.”

Challenges, and Overcoming Them

Some of the key challenges for 3G-powered m-gaming will be pricing and volume. For content providers, existing revenue share structures are very low, whereas for operators, 3G may not rake in the moolah as far as gaming is concerned, at first due to low adoption of the technology by a primarily niche market. Thus, higher-priced content with low volumes driving it, may be a major challenge. Other challenges are also consumer adoption of a new technology, shortage of 3G games or content in India, education by operators to their subscriber base, and a high-ratio of device fragmentation. The key to overcoming these of course is all based on how content is pushed, and the marketing of the same, offering something for everyone and all segments, at varying price-points or a pay-per-download model.

And while some content providers estimate that the new games will be available from year-end to between August and September next year, depending on 3G roll-out, there are others who think that 3G gaming as a trend will take at least a year to catch up in India. Says Mittersain, “I think 3G gaming is the next big trend in India. It is yet to catch up, but I think in about a year's time social gaming is going to grow really fast. The coming in of 3G and faster data rates will surely boost this sector of gaming.” As infrastructure and networks evolve, access to new technologies and the base of mobile games is expected to increase to 10-12% over the next two years.

Beryl M
berylm@cybermedia.co.in