The New Mortals

HDFC Bank has WAP (wireless application protocol)-enabled its mobile banking services, enabling customers to effect payments to utilities using their mobile phones. It plans to give access to customers' demat accounts soon and broking services over WAP by July. ICICI Bank too has jumped on board the WAP bandwagon. Clearly, there's much more to the cellular market than mobile telephony. The convergence of the mobile phone with the internet has opened up a slew of new applications for mobile phones. E-mail, mobile surfing, online stock trading, and even video, to be provided by the third-generation technologies, are some of them.

 

Consider stock trading. Even though wireless accounts for a minuscule 1 per cent of all online stock trading at present, research suggests that as much as 50 per cent of all online financial activity will be done through the mobile phone as early as 2002. Large companies such as Fidelity are making the bet that the future of stock trading will be online, and are positioning themselves to be number one in this emerging field. In India, financial vortals interested in online stock trading are WAP-enabling their internet sites. After mobile banking, m-commerce and mortals (mobile portals) could well be the future of the net here.

Small wonder therefore that there is intense competition to obtain a slice of the m-commerce pie. Internationally, major recent deals have been Deutsche Telekom's purchase of One-to-One, Vodafone' acquisition of Airtouch, the sale of Orange plc to Mannesman, and Vodafone Airtouch's takeover of Mannesman, all aimed at rolling out a pan-European platform. Similarly, in this country, it is Hutchison Max which has moved swiftly to acquire a pan-Indian identity. The Hutchison offensive has already led to an alliance between BPL Mobile and Bharti Telecom, which has several acquisitions of its own , while Gujarat, Maharashtra and Andhra Pradesh are under the sway of the formidable Tata-AT&T-Birla combine.

Even apart from m-commerce, mobile telephony is growing by leaps and bounds. It is estimated that the subscriber base has increased by 56 per cent in the last 12 months. The long-awaited move to the calling-party-pays (CPP) regime will also have the effect of increasing volumes. Lower call rates, and the reduction in import duties in this year's budget should further boost the rate of growth. And takeovers and alliances enable companies to lower costs, essential to fund the increasingly high levels of technology.

But it's not just lower costs which is driving acquisitions. The high valuation put by Hutchison on the Calcutta circle, for instance, is a clear indicator that it is looking more to a WAP and third-generation technology enabled value-added future than to revenues generated from telephone business alone.

Wireless internet space is limited real estate, and the race is on to snap it up. While the acquisitions have so far been limited to the mobile telephony business, the next wave is likely to be alliances of cellular operators with internet service providers, aimed at making the mobile phone the preferred device for internet access. But for that to happen, the government urgently needs to re-think its policy on internet telephony. That will allow mobile phones to go in for packet switching, slashing costs, efficiently using bandwidth and most importantly, creating an explosion of demand, and a new platform for e-commerce.