naveedahmedchoudhury(1)

Accessing the most effective and

efficient business model for M-

Commerce to boost revenue

generation

Naveed Ahmed Choudhury

Head of M-Commerce, Citycell

(a JV of SingTel & Pacific Telecom Bangladesh)

March 06,2013

www.citycell.com c2008. Pacific Bangladesh Telecom Limited. All Rights Reserved

Outline

• New technologies

• Effective business model

• Different business models

• Bangladesh overview & M-Commerce

• Citycell in M-Commerce

• M-Commerce Service & VAS

• Different approaches of M-Commerce

• Revenue growth


New Technologies

•USSD, SMS, IVR or combination

•Contactless technology e.g. NFC

•Other initiatives e.g. Google wallet, ISIS etc.

•following are technology wise break down for M-Commerce in Asia Pacific in 2015* :

•Transaction: US$ 3.6 billion

•SMS: 67%, NFC: 23%, Others: 10% *As per Frost & Sullivan


Business models

•What is an effective business model

•Different business models

•Varies as per roles of different actors in value chains. Need to incentivize based on who provides what.

•For Mobile Commerce, business models vary based on Bank-led, Telecom led or hybrid model. In a Bank-led model, a Telecom provides connectivity for SMS/IVR/USSD and also POS network.


Outline

•Bangladesh overview

•M-Commerce industry

•Citycell in M-Commerce

•Mobile payments

•Current technologies

•Segment without mobile

•Way forward


Bangladesh: country overview

•Population>160 million.

•GDP : US $ 282 billion (PPP)

•Growth rate: 6%(approx.)

•GDP/capita: US$1970 (PPP)

•Bank access: only 13%. But mobile subscribers>90 mln*

So there is a huge opportunity to provide access

to banking services through Mobile phones.


Remittance

Source: worldbank

0

2,000

4,000

6,000

8,000

10,000

12,000

2005 2006 2007 2008 2009 2010

Migrant remittance inflows to Bangladesh

Migrant remittance Inflows (US$ million)

– International remittance accounts for 10% of national GDP.

–Channels: • Formal: Banks, Money transfer

organizations, Postal services etc.

• Informal: Hundi or hawala, hand delivery, travel agencies etc.

– Existing channels are • Costly

• Time consuming

• Bureaucratic etc.

M-Commerce can simplify remittance receiving.


M-Commerce landscape M-Commerce landscape • Bank-driven model: 22 Banks given

approval.

• Only 14 banks able to launch service.

• DBBL, partnering with Citycell first to

launch M-Commerce in March 2011.

• Citycell as an MNO provides retailer

footprint and network connectivity.

• Citycell pioneered launch of Mobile Banking

partnering with a local Bank.

• As per regulatory frame work, Banks have

ownership of product, pricing, campaigns etc.

MNO provides retailers and network.

• Citycell has introduced innovative uses of M-

Commerce e.g. retailer commission

payment(partnering with DBBL).


A growing market • Main players:Bkash(2.2) & DBBL(1)

million accounts. Total 3.3

million(approx.) accounts.

• Total number of M-Banking accounts

was 0.7 million(approx.) in May 2012.

• So > 400% growth in eight months.

• New Banks entering landscape.

• New services e.g. international

remittance, deposit schemes to be

introduced soon.


M-Commerce & VAS

Maturing and upgrading the Telecom customer

Mobile voice

SMS

Various VAS e.g. SMS

based, IVR based, USSD

based VAS

Internet access &

services

The next step in this evolution should be M-

Commerce services.


Different approaches

•Treat M-Commerce as a separate stream OR

•Leverage on VAS for growth of M-Commerce & vice versa.

•Make M-Commerce part of Telecom loyalty & rewards programs.


Which approach to take

•In context of VAS, Telecom operator should

be at least an enabler(subject to local regulation) to reap following benefits:

•Better customer experience

•Create stickiness

•Strengthen customer relationship

•New revenue stream

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