What is Carrier Commerce ?
A Telecommunications company is generally referred to as either a ‘Operator’ or a ‘Carrier’- depending on location in the world. Of course the Telecom industry is renowned for providing voice communications services since the dawn of telephony in the analog era. As our world transitioned to the Digital Era, so too did the Telecom industry with data communications.
Besides Telecom’s core strategic communications assets, the Telecom industry has a often overlooked and underappreciated its second strategic asset – billing related capabilities that include it’s invaluable known and trusted billing relationships (now with over 7 Billion globally). Near the dawn of monetizing the Internet, industry research consultants (i.e.: Forrester, Gartner, IDC etc.) reported that upwards of 40-50% of online users either did not have a credit card, a debit card nor a checking account, or, feared using any of them online due to ongoing cyber crime fears. This unmet marketplace need influenced the creation of the Alternative Payments Industry. Some major telecoms (i.e.: AT&T, BT, NTT Docomo, Swisscom, TelMex, etc.) saw and understood this consumer need – an opportunity to evolve and enhance some of their billing assets to acquire and retain more customers plus serve these communities in a unprecedented manner.
Direct Carrier Billing/Direct Operator Billing was the telecom industry’s first payment solution for the Unbanked. Additional telco alternative payment solutions emerged including Telco Prepaid Digital Content Cards (i.e.: AT&T PrePaid WebCents) and PSMS (Premium text messaging). B2B web merchant customers of telecoms who added these alternative payment options (i.e.: AOL, CBS Fantasy Sports, Disney, ESPN, Rhapsody Music, Sony and others) were able to reach larger addressable markets, helping them realize a lift of 30%+ in consumer purchasing. Today Direct Carrier Billing [DCB] is used globally by the likes of Apple, Google and countless other online merchants. DCB is now available in well over 100 countries and is a $12B sector of Telco Carrier Commerce and the broader FinTech industry. DCB is forecasted to grow to $22B – $24B in the next 3-5 years.
Due to its impact on the developing world and financial inclusion, the most renowned sector of Carrier Commerce is Mobile Money. Flagship Vodafone M-Pesa, along with Safaricom in Kenya, were able to devise an innovative business/economic/technical model that leveraged the growing ubiquity of mobile phones in Kenya, addressing marketplace needs of transferring money from working family members in distant locales where paying jobs were available, back to their families in remote villages. Distance, time to travel or the cost to pay others to transport cash, along with the risk of crime, were the environmental problems that M-Pesa overcame. Mobile Money has boomed since then into a multi-billion dollar sector, available in nearly 100 countries. Mobile Money can be operated by banks, tech firms or telcos. Generally a nation’s central bank must establish permissions that allow non-traditional financial service providers to operate mobile money. For the purposes of the Carrier Commerce industry, FINCCLUDE focuses on Telco-Carrier operated mobile money (thus mobile money operated by banks or tech firms that use telco-carriers for transport-only are not deemed a ‘Carrier Commerce’ initiative).
Today’s comprehensive view of the overall Carrier Commerce landscape reveals over 100 sectors of Carrier Commerce initiatives, making the Carrier Commerce industry a quiet giant advancing financial inclusion. Carriers operate Payments Banks in India and possibly soon in Nigeria. Financial regulators permit telco-carriers to operate mobile financial services in Turkey and Myanmar, Internet Banks in South Korea, mBanking in Cuba, France, Germany, Ivory Coast, Liberia, Pakistan, Poland, Serbia, Tanzania, Zambia, Zimbabwe and elsewhere. Carrier operated Mobile Money solutions impact Healthcare, Education, Agriculture, Insurance, Alternative Energy, Transportation and more
Innovative new sectors of Carrier Commerce continue to emerge regularly!
Each are growing Knowledge-Cells that FINCCLUDE tracks and works to harness when needed to facilitate finding and sharing of success-knowledge, best practices, etc.
Increasingly, Telco-Carriers are making Mobile Financial Services a strategic imperative (i.e.: Telenor, Orange, MTN, etc.)