Mobilicity hammers banks, big carriers on m-commerce

In the many countries it’s easy to buy things in stores with a swipe of a mobile phone, but Canada remains “very stunted” in progressing towards this form of mobile commerce, complains the head of a wireless startup.

“We need as an industry to grow up and realize we can’t own the customer relationship, we can’t own a technology,” David Dobbin, CEO of Mobilicity told a panel discussion in Toronto on Thursday.

The problem, he said, is that big Canadian carriers and banks refuse to give up their links to their customers to third parties that offer new technology, slowing down the spread of mobile commence. Meanwhile in other countries companies like Google are stepping in.

Google Wallet is an Android application lets consumers set up a link on the latest handsets with near field communications chip to a MasterCard credit card account or Google prepaid account. The sensor detects a short range signal from a wireless point of sales device in a store to register a sale and then forwards it to the account. At the moment Google Wallet is in beta, only working on the Samsung Nexus S handsets. But MasterCard said Thursday that it will be rolled out commercially in the U.S. in a few weeks.

“It’s a staggeringly cool service that would be awesome to roll out in Canada,” Dobbin said. But it won’t work here.

There is a similar technology called ZoomPass, a co-operative owned by Bell Mobility’s parent BCE Inc., Rogers Communications and Telus Corp. But, Dobbin says, our banks – which have deep relations with credit card companies – aren’t interested in working with it..

So m-commerce won’t go anywhere fast here, he concluded, until banks and big carriers give up their close relationships with subscribers and customers .

Dobbin was on the panel at the Canadian Wireless Trade Show with John Kennedy, director of mobile at handset maker LG Canada, and David Keegstra, chief technology officer at network equipment maker Ericsson Canada, where the topic was the future of wireless.

Dobbin, whose company offers wireless service in five cities, had more to say about carriers and their subscribers.

“I think the wireless carrier of the future becomes a pipe and becomes a conduit for over the top services and content that the consumer will use,” he said. By contrast, Rogers and BCE have been getting deeper into being content providers and buying television networks. But Dobbin suggested the role of the carrier will become merely an efficient transporter of data.

 “As hard as we try to hold on to the consumer relationship and add value to it, I don’t have the intellectual horsepower to figure out how to beat Google. I cannot figure out how to beat 50,000 developers working on the next app,” he said.

He gets “crazy” pitches from people who urge Moblicity to do things like build its own applications store as Google, Apple Inc. and Research in Motion have done. Apple has proven the app store approach can be wildly popular.

But why, Dobbin asked, would he want to duplicate that effort? 

At another point, Dobbin was asked about the sensitive issue of pricing. Carriers are abandoning unlimited monthly voice and data plans, instead offering combinations of voice minutes and buckets of data. Would he like to drop minutes?

“I would love to be out of the minutes business tomorrow,” he replied. “A voice over IP solution is less intensive on the network infrastructure than a standard circuit-switched call.” While the data side of cellular transmissions are on an IP network, voice is still circuit-based, and will remain so until the all-IP LTE Advanced technology is standardized. That’s still at least a year away.

In the meantime, Dobbin would like to see wireless subscribers use voice over IP solutions like Skype, but he admits there are still configuration issues. “The problem is it’s not easy yet.”

When asked what mobile feature he’d like to see in the future, he got a round of applause when he said “a battery that lasts.”

In his look into the future, LG’s Kennedy forecast unnamed handset makers will release devices with 5-in. screens next year.

But he also had a thoughtful observation that the wireless industry needs to cut technology from its sales pitches and instead get back to simple “story telling” to encourage buyers of the usefulness of wireless.

Show the practicality of wireless “as if we’re the next door neighbour,” he urged, “not the geek that works for a tech company.”

He also gave a peek into his relationship with Mobilicity. When the carrier launched, aiming its service largely at people who didn’t have cell phones, Kennedy was surprised that Dobbin didn’t deeply discount LG handsets. Carriers typically take a financial hit by subsidizing phones. “It involved us taking a risk with each other,” Kennedy said of the Mobilicity relationship.

But, he admitted, handset makers can’t compete only on price. They have to offer value, even if its on things like a no-hassle return policy and leveraging the handset makers’ brand.

For his part, Ericsson’s Keegstra predicted that “anything that can benefit from a wireless connection will eventually have one.”

That doesn’t mean automatically all will succeed, he suggested. Application developers will still have to try 1,000 ideas to get one that sells broadly, he said. It’s the job of equipment makers like Ericsson to make sure carriers have the networks that can handle what the future brings.
(With a file by Marc Ferranti, IDG News)

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