Archive for: Telecom

Vodafone’s M-Pesa mobile phone payments and transfer service in Kenya has signed up an impressive 140,000 customers in just 3 and a half months, according to Vodafone’s head of mobile payments. Although there are anecdotal reports of customers who are confused by the service, glitches in the sign up process, etc., it’s a good start. With this in mind, one wonders about India.

India’s cell phone user population doubled during the past year to 150 million at the end of 2006. That’s amazing growth and helps explain Vodafone’s recent purchase of most of the shares of Essar, India’s fourth-largest mobile operator.

So what about mobile phone banking? The Reserve Bank of India has so far been less open to allowing a mobile operator to issue e-money, at least in comparison to the central bank of Kenya.

One strategy an operator might take would be to partner with a financial institution that could hold customer accounts. If Vodafone could partner with a bank to make sure customers have accounts at  a licensed financial instution rather than offering virtual accounts as it does in Kenya, then the regulatory hurdle becomes much more manageable. However, the business arrangements naturally grow in complexity.

A second major regulatory question, also dealt with in CGAP’s recent diagnostic on the regulatory framework in India, concerns agents. Key to a successful m-banking model is the ability to use agents such as airtime resellers to open accounts and take in and give out cash.

Recently I had the opportunity to talk with Lazarus Muchenje. Based in South Africa, Muchenje is the CEO of Celpay Holdings (Pty) Ltd., which operates mobile phone banking in the Democratic Republic of Congo and Zambia. He says working within existing regulations – which often do not take into account the technology – is Celpay’s toughest challenge.

Tell me about Celpay. We really operate in two markets, Democratic Republic of Congo and Zambia. If I was to compare the two then Zambia is a little less challenging, the stage of development today vis-a-vis the Congo. Zambia has been a democratic country for a long time, while DRC has just had its first democratic elections last year.

Regulations are not clear-cut? In DRC we don’t have clearly defined legislation governing e-commerce yet. This is quite normal in a post-conflict country, however, if tomorrow a new law to regulate e-transactions, that does not support our current business model is promulgated this may jeopardise our investment. The Central bank of Congo has assured Celpay that they are working on the necessary regulatory framework. In Zambia, the National Payments Systems Act has just been promulgated last month. It is very broad in its current format but it is an excellent starting point in defining how e-commerce is regulated. Generally I would say the regulatory environment is extremely challenging, from undefined to starting to define how to manage e-transactions, e-commerce. Read the rest of this page »

…potential access points for payment services.

It also happens to be the number of handsets that Nokia has manufactured in India in the 18 months since its operation openned in Chennai, according to numbers released Thursday in New Delhi.  Those phones are not just for India or its neighbors, as LiveMint reports:

Kallasvuo said the firm exports nearly half of its Indian unit’s production, comprising low and mid-end GSM phones, to 58 countries in South-East Asia, Africa and West Asia. The firm started the plant to assemble entry-level handsets, mainly for the local market, and started exporting phones produced there only in mid-2006. Higher-end models, such as the Nseries are still not manufactured in India.

Meanwhile, more than one-third of Indians responding to a survey of Asian consumers said they would consider switching to a bank that offered mobile banking services.  As the Economic Times reports:

Among Indians, 49% of respondents to the survey claim to actively use their mobiles to check their bank balance, well above corresponding figures of 13% for Australia and 9% for China.

Seems like the days of subscriber trunk dialing are a bit numbered.

Full disclosure: I penned this for psdblog! 

Okay, we’re three days into the era of the iPhone. While my first-hand experience playing with one over the weekend was exciting (I’m intrigued but will keep my beat-up Treo 650 for awhile, thanks very much), there’s another nascent development in cell phones that could potentially be a much bigger deal over time: mobile (cell) phone banking and its potential to increase access to financial services for poor people.

At CGAP, we’re partnering with companies like Globe Telecom to explore how poor rural communities might be better served with appropriate, responsible services through mobile phones. As this effort gets underway, we’re also taking a look at how regulators in several countries, including the Philippines, are dealing with mobile phone banking. Here are some highlights from our preliminary assessment of Pakistan’s banking regulations when it comes to so-called branchless banking:

- Several mobile network operators (MNOs) have started developing concrete proposals to offer mobile phone payments and banking directly;

- Improving access to financial services features highly on the agenda of the Government of Pakistan;

- Key regulatory issues that may help “branchless banking” increase access to financial services are (a) allowing the use of agents (such as retail shops) outside bank branches; (b) easing account opening (both on-site and remotely) while maintaining adequate “know your customer” standards; and (c) permitting a range of players to participate in payment service provision and e-money issuance (especially MNOs), enabling innovation from multiple parties.

In addition to Pakistan, CGAP is working on similiar assessments in Brazil, India, Kenya, South Africa, the Philippines, and Russia. So, more to come…

BBC reports on how villagers in India can request web content — from cricket scores to photos of Britney Spears — as part of

The business was dreamed up by MITians a few years ago. The underlying technology is called DakNet — a wifi “village area network” created when vans and motorbikes fitted with short-range wifi devices are driven through villages giving people access to the internet for a short period of time. Kiosks, schools, and other common locations are equipped with PCs and wifi devices.

DakNet may have borrowed its name from Dakiya which is what bicylce riding postmen were called in India and for many still symbolize a remote village’s only connection to the world.

Not sure if the business is sustainable but villagers subscribe (Rs. 50 for a lifetime membership) for a range of services from email to SMS. You can also shop online. Delivering web content on-demand might be a new service.Villagers submit a request for specific content which is available hours later as the van or bike drives through the village broadcasting it over a wifi network.

The Consultative Group to Assist the Poor (CGAP), United Nations Foundation (UN Foundation) and The Vodafone Group Foundation (VGF) today released the first public findings on how low-income individuals in South Africa use mobile phone banking (m-banking). The findings confirm early optimism about the potential for mobile phones to bank the poor, in particular showing that m-banking can be up to a third cheaper for customers than the current banking alternatives.”Mobile phone ownership is exploding in developing countries, presenting a tremendous opportunity to deliver financial services cost effectively to the nearly three billion people who do not currently have bank accounts,” said Elizabeth Littlefield, CEO of CGAP. “And that matters because financial services can help poor people increase household incomes and build assets, making them less vulnerable to crises so that they can ultimately plot their own paths out of poverty.” Globally, there are more than 2.5 billion mobile phones, more than half owned by people in developing countries.

press release | download the report

Focus Note No. 32, January 2006
Using Technology to Build Inclusive Financial Systems
Some of the innovations commercial banks need to service poor clients may be found in information and communications technologies (ICTs).This Focus Note addresses the following questions: Can banking technologies, applied innovatively in developing countries, make microfinance profitable for formal financial institutions? Will they reduce costs to such an extent that banks could profitably serve even those whom MFIs have mostly excluded to date, such as very poor and remote rural customers? Will these customers be comfortable using technology?

English pdf | French pdf | Spanish pdf | Russian pdf | Arabic pdf