M-Commerce Crawls Along in Singapore

The growth in mobile electronic commerce (m-commerce) is lagging far behind the take-up rate for mobile phone lines in Singapore, industry observers here have said.

At the recent Computerworld Awards, Yong Ying-I, chief executive of the Infocomm Development Authority, noted that there were some 1.97 million mobile to 1.9 million fixed-line subscribers in Singapore.

This is in stark contrast with the estimated 60,000 subscribers to Wireless Application Protocol (WAP) services in Singapore, a figure given by Nicholas Khoo, cellular industry analyst at Gartner Group Inc.

WAP is a set of communication protocols for wireless devices used for m-commerce designed to enable manufacturer, vendor, and technology-independent access to the Internet and advanced telephony services.

Wee Way Kiat, general manager of mobility at StarHub, noted that voice traffic still accounts for about 91 per cent of mobile operator revenue in Singapore. Mobile customers are still very heavy users of voice services, he said.

One reason for the lack-luster performance of data-driven m-commerce in Singapore is that wireless standards are still evolving. Many organizations are probably still evaluating how they can exploit wireless technology without investing too heavily into equipment and infrastructure that may be obsolete in a matter of months, said Terence Kok, chief strategy officer of WAP developer WAPworkz Technologies.

Wireless Markup Language (WML) versions 1.2 and 1.3, are expected to roll out next year with enhanced features that support downloads, security and even color.

Not helping m-commerce's case at all is the current disillusionment with WAP technology among users.

Consumers have the misconception that they are able to surf the true Internet on their mobile phones, which is generally not true. Many advertisements allude to applications like videoconferencing over WAP phones. Thus, the first adopters were generally disgusted with the speed, resolution and response time of their new WAP phones.

Inadvertently, this has affected the take-up and adoption rates, said Kok.

Singapore is not alone in terms of slow m-commerce adoption, said Chye Hoon Pin, director, Mobile Consumer Products, Singapore Telecom (SingTel). In fact, SingTel Mobile was the first in the world to launch a mobile electronic-trading service in June 1999 said Chye, who noted that m-commerce has yet to take off in a big way in other Asian economies too.

According to a report from Frost & Sullivan, the m-commerce market in Singapore is more skewed to the business-to-consumer (B2C) sector.

We would probably see lifestyle applications taking off first, things like booking and paying for cinema tickets, utilities payments and food/restaurants payments. These are predominantly B2C-based services, said Wee Way Kiat of StarHub.

Its competitor SingTel, too, started out with B2C applications.

SingTel introduced the first WAP service in Singapore, branded under e-ideas (short form for intelligent do-it-yourself electronic access services) in January this year. It is a suite of mobile e-commerce services that allows customers to obtain information and perform wireless transactions using their mobile phones, said Chye Hoon Pin of SingTel. Today, SingTel has over 30,000 customers with access to e-ideas using either WAP phones or PDAs.

However, m-commerce applications are not restricted to B2C. Logistics provider DHL, for example, has a business-to-business (B2B) m-commerce application that WAP-enables its parcel tracking services.

Many companies are beginning to realize the potential of business-to-business (B2B) m-commerce applications. SingTel has customized WAP services for companies to make their business operations more efficient and to improve communication with their business partners. This will be a high growth sector in the near future, said Chye of SingTel.

Frost & Sullivan said three main issues: infrastructure, the nature of enabling technology, and security stand in the way of widespread m-commerce adoption.

The lack of new and additional investments in infrastructure will hurt development of m-commerce, said Frost & Sullivan, as "limited bandwidth will result in limited content in the short term."

Chye of SingTel noted that "a higher data rate will see a rapid pick-up of transactional applications and services being offered in mobile services. Customers will then be more likely to use mobile data services to complement their mobile communication needs," he added.

For example, SingTel has already launched High Speed Circuit Switched Data (HSCSD), capable of supporting a data rate of 38.4K bps (bits per second), four times faster than the standard speed. It will also be able to support data speed of up to 115K bps when the telco introduces GPRS (General Packet Radio Service).

As for enabling technologies, Frost & Sullivan expects WAP to benefit the industry as a whole since it is network-independent and acts as a universal standard to bring Internet content and advanced value services to mobile phones and wireless devices. Despite the hiccups, WAP has today achieved overwhelming global and regional support including 90 percent of global handset manufacturers.

Addressing the security question, Frost & Sullivan noted that there was still no secure standard that ensured authentication, integrity and that spurs confidence in electronic mobile transactions.

A fourth factor may be added to the obstacle list: lack of content. While mobility adds one layer of value, the more important or longer-term value is directly linked to the content and that requires vision from the retailers and suppliers, said Dennis Shen, managing director, telecommunications business unit, Scient.

Despite the slow take-up rate, a lot of resources and investments are being poured into developing m-commerce opportunities, and Chye of SingTel. Everyone in the industry seems to agree that mobile is a profitable venture with a huge market potential. Now what's left is for the industry to agree on which business model can work for these opportunities and how much their investments should be.

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