CONNECTING PEOPLE, AGAIN

Nokia Turns to Mobile Money to Revive Fortune

Drops ‘Nokia’ from fin service name, makes it accessible on all handsets

OMKAR SAPRE PUNE

Nokia, whose domination in the mobile handset market is under severe threat, is betting on mobile money — a service that lets people without bank accounts pay bills and retailers, send money and save money through their handset —to revive its fortune.
The Finnish firm has formed a company, Nokia Mobile Payments, to roll out this service, branded Money, across the country after pilots in Pune, Nashik and Chandigarh.
And it won’t use the ‘Nokia’ name because its accessible on all mobile phones.
“We have branded the service as Money because it’s built on open architecture and works on all phones,” Nokia Mobile Payments General Manager Gary Singh says.
Unlike mobile banking, which is an additional channel to those with bank accounts, mobile money is positioned as an alternative to cash for the unbanked and underbanked population.
Nokia is among the first bench of companies offering mobile money in the country, a new buzz among banks and mobile service providers after it got the central bank clearance in 2010 with the condition that the money must be parked in a traditional banking system.
“We aim to work across all handsets, all operators and all banks,” says Singh.
MAKE OR BREAK Analysts say mobile money will be crucial for Nokia to check the free fall in its mobile handset sales.
“Over the last two years there has been a huge onslaught of local (handset) brands, which have had a deeper penetration into the market. So to get closer to those customers, Nokia has taken a right strategy to go with an open brand name,” says advisory firm Deloitte India Director Sandip Biswas. The world's largest handset maker is losing its hold in the market. According to Gartner, Nokia’s global market share stood at 25.1% in Q1 2011, down from 39.1% Q1 2008. In India, its share slipped to around 30% in 2011, down from over 70% in 2007 and 54% in 2009. That explains why the most respected brand in the country opted not to use its brand name in perhaps its most ambition project in the country.
SLOW START Mobile money has huge potential in India where nine out of 10 villages don’t have a bank branch and 97% retailers lack facility to accept credit cards. On the positive side, there are some 84 crore mobile phone users in the country and this number is growing around 2% every month.
But there is strong competition. While Nokia has tied up with Yes Bank and Union Bank of India for the service, its rivals include mobile operators Airtel, Vodafone, Idea Cellular and Aircel that have combined with SBI, ICICI Bank and Axis Bank.
However, despite the launch of pilots by all, mobile money is still to gain popularity.
The number of registered mobile money users has risen to 1.13 crore in June 2011, from 400 in August 2010, but the number of transactions has crawled to 6,401 from 430.
Observers say none of the operators, banks or even the RBI is promoting mobile money. On the ground, agents find it challenging to convince end users. “Many do not know about it and there is a very less use by those who have enrolled,” says Shailesh Khandelwal, a sub-agent of Nokia in Pune. “The company should tell people about it.”
Rajashree Malusare, another Nokia agent, says that text message-based system is a hindrance. “Sometimes the transaction does not go through, but the customer is charged for the SMS.”
She, however, says many customers like this service and are eager to explore it.
Mahesh Pardeshi is one such customer. “It is great to see I can recharge my talk-time using my phone itself, and not walk to the shop every time. They (the agents) told me I can also pay for services, though I have not used it yet,” he says.