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ITU TELECOM WORLD 2009: Special report: Reflecting new needs and realities
Snapshot of the VIP programme
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Teppo Paavola
Vice-President and General Manager of Mobile Financial Services, Nokia, United States
 
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Samuel Poghisio
Kenya’s Minister of Information and Communications
 
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Mike Lazaridis
President and co-CEO of Research In Motion
 
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Patricia Szarvas
CNBC, United Kingdom
 
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From left to right: Christian Salbaing, Deputy Chairman and Managing Director, European Communications, Hutchison Europe Telecommunications; Sunil Bharti Mittal, Chairman and Group CEO, Bharti Enterprises; Robert Conway, CEO and Member of the Board of the GSM Association; Jon Fredrik Baksaas, President and CEO of the Telenor Group; Naguib Sawiris, Chairman and CEO of Orascom Telecom Holding Egypt; and Tom Phillips, Chief Government and Regulatory Affairs Officer, Public Policy, GSM Association
 

Looking at the benefits of mobile broadband

A VIP session on “Benefits of Mobile Broadband for the Economy and Society”, looked at how the mobile industry has responded to the global economic downturn, in comparison with other sectors. Participants and panellists also considered how it might contribute as new technologies are adopted around the world. “The mobile industry will lead us out of the financial crisis,” said Dr Touré upon opening the session, which was moderated by Tom Phillips, Chief Government and Regulatory Affairs Officer, Public Policy, GSM Association (GSMA), United Kingdom.

Today, broadband connections to the Internet via mobile phones and other devices — mobile broadband — can be used for many data applications, from e-mail to multimedia streaming and file downloads. Mobile broadband has been a bright spot for the sector, especially in mature markets where the recession (and regulation) has had an impact on revenues for voice and short-message service (SMS) transmissions. Over the last 18 months there has been a huge rise in the adoption of mobile broadband globally, with customers using netbooks, dongles attached to laptops, or smartphones.

Several technologies are competing to deliver commercial mobile broadband services. One of them is high-speed packet access (HSPA). According to GSMA, there are now 321 HSPA networks in 120 countries worldwide, and 285 of these networks are commercially live, supporting more than 167.5 million connections. GSMA says that there are now more than 9 million new HSPA connections being added globally every month, compared to 5.5 million a year ago. Europe and the Asia-Pacific region each account for an estimated 3 million of these new connections, with North America contributing 1.3 million.

During the panel discussion, industry leaders stressed that competition, not regulation, should drive mobile broadband development. Robert Conway, CEO and Member of the Board of the GSM Association, recalled a letter which key players in the mobile industry had addressed to the leaders of the G20 countries meeting in London in April 2009. He said the letter had asked the G20 governments to meet the industry’s requests for less intrusive regulatory regimes, and for the additional radio-frequency spectrum needed to extend the reach of mobile broadband services. Mr Conway said the mobile industry is forecast to invest USD 800 billion over the next five years, of which USD 550 billion will be spent on mobile broadband with the aim of connecting 2.4 billion people to the Internet.

The mobile industry is forecast to invest USD 800 billion over the next five years, of which USD 550 billion will be spent on mobile broadband with the aim of connecting 2.4 billion people to the Internet.

Participants in the session underlined that access to mobile broadband has the ability to improve people’s lives, create jobs, and generate tax revenues. India and China are seen as huge engines of growth in this market. “The fact is, when we bring a radio signal to a remote part of the country (India), people who have no address nevertheless have a mobile phone. And income levels go up as people start using mobile phones,” commented Sunil Bharti Mittal, Chairman and Group CEO, Bharti Enterprises, India.

When you ask anyone today, what is the last thing they would give up, the answer is “my mobile phone”, said Christian Salbaing, Deputy Chairman and Managing Director, European Communications, Hutchison Europe Telecommunications, Sarl, UK. As technology evolves, we should get a reality check by listening to young people, he added. They live in a virtual community with all their friends, and their needs have to be taken into account.

For Jon Fredrik Baksaas, President and CEO of the Telenor Group, Norway, “innovation happens when there is not too much regulation”. Norway is one of the world’s most advanced countries in ICT usage, and the Telenor Group’s footprint covers more than 1.8 billion people in 13 countries in Europe and Asia. A new study by Telenor demonstrates how Internet access can boost economic growth and social welfare. According to the study, 10-percentage-point increase in Internet penetration could increase gross domestic product (GDP) by 1 to 2.5 per cent, increase new business activities by approximately 1 per cent, and boost total government revenues in some countries by as much as 8 to 9 per cent. Mobile broadband will boost GDP growth in countries where it is deployed, commented Mr Baksaas. Expressing a similar view, Naguib Sawiris, Chairman and CEO of Orascom Telecom Holding Egypt, explained that “in Egypt, we grow 1–2 per cent every year in mobile broadband. By doing this, we are increasing GDP by 1–2 per cent every year”.

In general, the panellists concluded that, in order for operators to deliver feature-rich mobile broadband connectivity, it is crucial that they innovate in a defined and stable environment, confident about securing the necessary spectrum. Effective management of spectrum across all technologies, and in every region of the world, is vital for the long-term growth of the mobile industry.

Cash goes mobile

Another VIP session examined how to create the environment needed for mobile financial services through cooperation among regulators, financial institutions and mobile network operators. The speakers were Teppo Paavola, Vice-President and General Manager of Mobile Financial Services, Nokia, United States, and Kenya’s Minister of Information and Communications Samuel Poghisio.

Nokia believes that with more than 4 billion mobile phone users worldwide but only 1.6 billion bank accounts, global demand for access to financial services presents a strong opportunity to combine mobile devices with simple but powerful financial services. The company plans to roll out its “Nokia Money” service in some of its markets in early 2010. The service has been designed to be as simple and convenient as making a voice call or sending an SMS.

For many consumers, especially in emerging economies, this will be the first time they have had any access to such financial services. Rural consumers, said Mr Paavola, will particularly benefit from money transfers and, for urban consumers used to online services, they will be able to pay utility bills, buy train and movie tickets,or top up their SIM cards, all through their mobile phones. The service is expected to be available across different operator networks and on virtually any mobile phone. Mr Paavola underlined that for the service to succeed, cooperation will be needed between regulators, banks, consumers and mobile device vendors, as well as international interoperability.

The session also looked at Kenya’s success story in bringing mobile financial services to millions of its unbanked population. Kenyan mobile phone service provider, Safaricom (an affiliate of Vodafone), has become well known for its money transfer service, M-PESA. It offers a simple way for people to safely transfer and carry money using their mobile phones, and is a necessity for Kenyans who have no other access to banking facilities. Launched by Safaricom in March 2007, M-PESA now has close to 7 million customers.

The significance of mobile banking to the Kenyan economy is better understood by looking at the value of M-PESA transactions compared with commercial bank deposits and the country’s GDP. According to statistics from the Central Bank of Kenya, in July 2007, the value of M-PESA transactions was about 0.17 per cent of commercial bank deposits. In July 2009, that value had grown to 4.36 per cent. Kenya’s annual GDP in 2008 was estimated at USD 30.24 billion, but in the month of July 2009 alone, M-PESA transactions accounted for USD 535 million. “M-PESA has transformed life in rural Kenya and revolutionized national payment systems” said Mr Poghisio.

This success demonstrates the demand for easily accessible, secure cash payment services in emerging markets. The Kenya Communication Act that was implemented by the Communication Commission of Kenya enabled reform of the telecommunication sector, providing a base for successful mobile banking as a value-added service, explained the minister. Dialogue between the private sector and government authorities has contributed to the continuing success of M-PESA, he said. Providers receive the necessary support from government, which also evaluates possible repercussions of new products to the integrity of the financial system.

Kenya’s policy has been to allow innovations in mobile banking, but under careful monitoring and review. The Central Bank of Kenya Act was amended in 2003. This enhanced the bank’s mandate to formulate and implement policies to promote the establishment, regulation and supervision of efficient and effective payment, clearing and settlement systems. At the institutional level, the bank has various strategies to enhance its oversight capacity and keep abreast of technological innovations in financial services. This has made it possible to increase access to financial services, but at the same time maintain stability.

Meet a leader

The “Meet a leader” session of the VIP programme featured Mike Lazaridis, President and co-CEO of Research In Motion (RIM), the maker of BlackBerry smartphones. Opening remarks were made by Helen McDonald, Assistant Deputy Minister at Canada’s Department of Industry, Spectrum, Information Technologies and Telecommunications. The session was moderated by Patricia Szarvas of the television broadcaster CNBC, United Kingdom. Mr Lazaridis highlighted a number of issues at the core of the wireless industry’s success. From the importance of security as a fundamental foundation for the wireless industry, to the role of technology in e-health, he drew on his many years of experience in the industry.

Mr Lazaridis is known in the global wireless community as a visionary and exceptionally talented engineer. A Canadian whose hometown is Windsor, Ontario, he founded RIM while a student at university. As President and co-CEO, he is responsible for research and development, product development, and manufacturing. He is also a passionate advocate of education and scientific research, and personally invested USD 150 million in the Perimeter Institute for Theoretical Physics, which opened in 2001 in Waterloo, Ontario. He has also helped generate more than USD 100 million in additional private and public-sector funding for the institute, a centre of scientific excellence that is now associated with over 30 Canadian universities and a growing number of others worldwide.

 

*All photos are by P. Christin/ITU, D. Keller/ITU, V. Martin/ITU, and F. Rouzioux/ITU unless indicated otherwise

 

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