Asia Times: Southeast Asia


	June 25, 2002	atimes.com

Southeast Asia

Singapore telcos unite in payment first
By Tony Sitathan

SINGAPORE - Singapore could pave the way for the telecommunications industry by being one of the first in the world to implement a national payment system by uniting the various mobile phone companies to offer a standardized m-commerce solution.

The three mobile phone companies - Singapore Telecoms Mobile, MobileOne (M1) and StarHub - said in a joint statement that they would work together with industry partners to develop a common nationwide mobile payment solution. This was announced late last year, but the real rollout and implementation of the program will only commence in the second half of 2002.

"This is the first of its kind in Asia or, for that matter, in the world where mobile operators provide a common mobile commerce solution to serve an entire country," remarked Winston Low, a telco consultant from Axle Consulting (Hong Kong). "Although Singapore is small compared to other countries like Malaysia, Thailand or Indonesia, it certainly leads the way in developing cutting edge technologies especially in wireless solutions for the mobile community," he said.

Although there were some initial drawbacks and delays standardizing the system and sorting out the problems of incompatibility with the different network systems, the Infocomm Development Authority (IDA) is confident that it will only be a matter of time before this technology becomes a norm in Singapore that is used as effortlessly as the short message service (SMS) or wireless application protocol (WAP) system already in place in the city-state.

"So far SMS usage in Singapore has exceeded all expectations, and it won't be long before this m-commerce payment system will act as a gateway for other wireless solutions to be implemented effortlessly by the consortium," said Vijay Prabu, a regional telco consultant from I-Mercury Consulting based in Malaysia. He is confident that telcos are taking a right step in the direction of offering a wider choice of services to mobile customers.

According to an official from the IDA, this is the first collaborative venture of its kind among Singapore's three mobile operators. "By providing the right economies of scale and the ability to share resources, it would be significantly less expensive to implement an m-commerce standard as compared to just one operator doing it alone," the official said.

M1 was the first of the three mobile operators to offer m-commerce solutions. It has tied up with Yeo Hiap Seng, a beverage company, to allow its subscribers to buy drinks from the company's many vending machines located throughout the island. It also allows its customers to top up cash cards on their mobile phones and pay their utility bills through the mobile banking services with Citibank.

In order to create more bulk services, the IDA intends to entice more merchants to sell their wares over the mobile network, as they can now sell to a bigger customer base using a common platform. "There won't be repetitive entries made on multiple databases on every operator's system. Instead a single platform will save development time and lower execution costs that could be better spent on offering lower prices to the end consumers," said the IDA official.

Currently, M1 and SingTel Mobile have their own proprietary payment systems using different payment modes and mechanism, which will become a thing of the past. However, in order to provide a standardized system, a shared common database will have to be built, supported by the requirements of the IDA as well as accepting a universal payment gateway by both the merchants and the mobile operators. New and innovative services have now been added on to the existing solutions. Even Virgin Mobile Communications, the new kid in the block, has plans to announce similar m-payment solutions within the next few weeks.

Despite all the hype, StarHub, which was rather reluctant at first to be one of the key players in the payment standard, has raised a legitimate concern. It charged that so far no critical mass of merchants has come on board and that there might be a slow pick-up rate among vendors and later consumers. Although StarHub has been slow in adopting m-commerce standards, it reassured the rest of the participating operators that it is still a part of the m-commerce consortium that will decide on a common payment solution.

Leon Perera, the managing director of Spire Research and Consulting, a Singapore environment research company, pointed out the similarities between the creation of a single payment solution and m-commerce on the whole as compared with Singapore's broadband bandwidth initiative called Singapore One Network for Everyone (ONE). "When you scrutinize the success of Singapore ONE, you have the impression that there were not enough merchants on board in the early stages of Singapore ONE to give it a mass appeal to all its Internet subscribers. Likewise, what does m-commerce offer to its mobile-phone subscribers? What is needed, if you look at the lessons of Singapore ONE, is enough merchants and applications that drive m-commerce."

Nonetheless, according to estimates from international research group IDC, m-commerce transactions in Singapore are estimated to exceed US$200 million over the next year. IDC also reported that a seamless and open standard would mean less confusion and messiness for all the mobile operators as well as mobile subscribers.

Neil Montefiore, M1's chief executive officer, said the collaborative effort undertaken by the three mobile operators will be a key facilitator for the growth and future viability of m-commerce in Singapore. "The creation of a common mobile payment platform is fundamental to harnessing the full potential of m-commerce that will ultimately determine the degree of success that m-commerce will enjoy in Singapore," he said.

SingTel Mobile said its effort will focus on working with partners who are committed to simple, secure and inexpensive solutions that work without any complications. "The best of breed m-commerce applications and payment solutions will be the mainstay, instead of expensive solutions that are complicated to execute. Among SingTel's offering is its ease of use that will be considered a big draw," said Winston Low.

All three mobile operators intend to work closely to evaluate, test and ensure the operational, commercial and technological viability of the proposed mobile payment solutions. Among the building criteria are the provision of an open standard, security, scalability, end-to-end solution and payment in multiple ways.

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