By
Enrique Velasco-Castillo

Mobile penetration in emerging economies has accelerated with the advent of increasingly affordable and capable handsets. IHS Screen Digest data reveal that the compound annual growth rate (CAGR) in mobile subscriptions for the period between 2001 and 2015 will reach 27 per cent in Africa and the Middle East, and 21 per cent in Asia Pacific. Contrast this with the more mature scenario in North America and Western Europe, with CAGRs of eight and five per cent respectively. This creates an extremely large potential audience for mobile money services, particularly in the developing world.

But to succeed, operators must explore innovative services unfulfilled by traditional banking institutions. In developing countries, such services include person-to-person (P2P) domestic and international remittances, government-to-person (G2P) disbursements (pensions or subsidies), and bulk payments (e.g. salaries). In developed countries, operators must focus their efforts in complementing rather than supplementing plastic cards, as reinventing these in the mobile handset form-factor is not enough.

Areas of competitive advantage in which mobile devices can easily outperform traditional plastic cards are card-not-present (CNP) transactions (e.g. online and mobile commerce), operator-billed mobile credit purchases coupled with loyalty incentives, international remittances, customer data analytics coupled with mobile advertising, and mobile money services which target the underbanked youth.

Highlights:

• Compound annual growth rate (CAGR) in mobile subscriptions to reach 27 per cent in Africa and the Middle East, and 21 per cent in Asia Pacific, whereas North America and Western Europe grow at eight and five per cent respectively for the period between 2001 and 2015.
• Mobile penetration in the BRIC countries between 2000 and 2011: Russian Federation went from 1.4 to 157.7 per cent, China went from 4.6 to 72.2 per cent, India rose dramatically from 0.2 to 75.9 per cent, and Brazil went from 12.3 to 121.2 per cent.
• 138 live operator-led mobile money deployments worldwide with 94 more in the planning stages.
• In India, Brazil, and China pre-pay amounted to 97, 80 and 73 per cent of active subscriptions in Q4 2011 respectively.
• Safaricom's M-PESA initiative in Kenya is currently the most successful mobile money deployment in the world, with over 14.9m users, and revenues of $190m in FY 2012.
• M-PESA users account for 78.4 per cent of Safaricom's active subscriptions as of September 2011.
• M-PESA now accounts for 16 per cent of Safaricom's revenue.
• Ratios of mobile to financial services penetration for Russia, Italy, Argentina, UK, Germany, Chile, Brazil, Thailand, Colombia, France, USA, Mexico, Kenya, Canada, China, and India.
• IHS Screen Digest does not expect NFC to play a significant role in mobile payments and commerce until NFC attach rates cross the 30 per cent milestone in 2014.

In this report:

• There are five common themes in successful mobile money deployments:
• Clearly differentiated use-case scenario.
• A progressive regulator.
• The interplay between high mobile penetration, low traditional financial services penetration, and high ratio of customers to mobile money agents.
• Transparent transaction tariff structure.
• Intuitive, low-friction user experience and interface.

Tables and charts included:

• Mobile penetration in BRIC countries
• Nokia handsets ASPs
• North America and Western Europe: Share of mobile media revenues
• Vodacom M-PESA Tanzania transfer fees to registered customer
• Vodacom M-PESA Tanzania transfer fees to non-registered customer
• Vodacom M-PESA Tanzania withdrawal fees for registered customers
• Mobile and financial services penetration
• Ratio of mobile to financial services penetration
• Safaricom's revenue from M-PESA
• Safaricom ARPU
• Share of Safaricom's Revenue
• Number of M-PESA customers and agents
• Number of M-PESA customers, agents per 1,000 customers
• NFC handset attach rates
• NTT Docomo Mobile wallet's share of subscriptions
• Mobile money deployment matrix by type, use-case, and number of users
• Table of deployments covered

Pages: 16

Tables & charts: 17

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