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Mannesmann
has done exactly the right thing in its defense against the hostile
takeover from Vodafone Airtouch. The question is whether the shareholders
will have the understanding to see why the management are correct.
Mannesmann management has shown tremendous vision and a boldness
to admit that telecoms firms want to be the new banks. The new Tele-Commerce
Bank is the shape of things to come.
If
there is one thing that telephone operators know how to do, it is
to send you a bill! Telcos know all about charging, billing and
transaction processing. The volumes of transactions in telephone
billing systems are simply stunning. A long way behind, in terms
of volume, are banking transactions, credit card purchases, cheque
processing, standing orders, direct debits, ATM withdrawals and
the like. They might be lower volume but they are big business and
there is big profits in mediating a sale or purchase between the
vendor and the consumer. With Credit Cards it can be 2% or 3% of
the value. Now the telcos want their share of that market and the
banks are powerless to stop them. The weapon in the battle for precentage
on your transactions is called Bluetooth.
Bluetooth
Bluetooth
is the standard for a local short distance radio protocol which
will enable electronic devices to talk to each other. Your phone
will have a bluetooth, so will your laptop. You may purchase a whole
host of bluetooth enabled devices. A bluetooth device polls the
atmosphere around it to see what it can talk to.
In
the supermarket, the checkout will have a bluetooth chip. In the
department store, the till will have a bluetooth chip, so will the
check in at the airport, so will the drinks vending machine in the
office kitchen. Bluetooth will be everywhere and it will be like
Don Norman promised, "the invisible computer". Bluetooth
will be talking and secretly negotiating on your behalf even while
you sleep.
Pretty
Amazing New Stuff
Telcos
have been after ways to make better use of all those hand phones
you've been buying. They have a sales outlet in your pocket and
they know how to bill you. Now they want to make better use of it.
They want vendors to send you SMS messages, they want you buying
e-services with WAP, but most of all they want to mediate your transactions.
Already
telcos are offering services to internet sites. Services like security.
Rather than ask for an on-line credit card, send the customer a
message on the digital hand phone. Digital signals are secure. Use
it for passwords, use it for transaction confirmation but best of
all use it because the customer needs to be holding the phone. It's
instant security. Providing no one is duplicating the SIM cards.
Billing
If
the phone company is working with the service provider to offer
security and validation services over the phone, then why not just
send you the bill too? It's obvious! Who needs a credit card when
the phone company can bill you. It has got to be more convenient.
This
is market the telcos are after.
Bluetooth
eats Credit Cards
With
the advent of Bluetooth it gets even easier. The telco doesn't even
have to run a server side transaction processing system for the
vendors. Nope! The vendor's till talks bluetooth speak to your hand
phone, you are prompted to pay for your groceries. You press, "OK"
and the deal is done. Your phone tells the telco server and the
grocery bill is added to your phone bill.
Sounds
great! What's the catch?
Well,
on the face of it, it seems that life is going to get easier for
us Users of technology. Well maybe. However, business is likely
to get in the way of usability for its own greedy ambition. As discussed
last month, there is a
battle for your pocket and different vendors are likely to talk
to different phones. Different alliances of these suppliers and
intermediaries are likely to offer competing services which are
not fully compatible.
The
picture from last month painted an outline of competing, incompatible
phone handsets, but just wait until the banks and credit card vendors
wake up and smell the coffee. I predict that it will not be long
before you see names like Visa, Amex, Citibank and their ilk joining
up with the WAP alliances and protecting their slice of your spending.
Meanwhile,
banks seem obsessed with getting bigger and more "efficient"
through technology. The British National Westminster has been subject
to a hostile takeover from the much smaller but more aggressive
Bank of Scotland. Meanwhile, Vodafone Airtouch have been trying
to buy up Mannesmann against the will of the German management.
None of this made any sense to me.
Banks
are trying to get larger so that they can compete against other
big banks, and phone operators are merging so that they can compete
against other phone operators. The management of these companies
seems to be missing the big paradigm shift in transaction processing
and mediation which is under way. Phone companies want to bill you
for your groceries and that means they need to offer you credit.
They need to become banks. Banks need to protect their market and
continue to handle your on-line and bluetooth transactions. That
means that they need to become telco vendors. Mannesmann seem to
have got it right!
On
the face of it life seems to be getting simpler. So long as you
have a handphone you can do all your banking business from the comfort
of your palm. However, deals between the large credit vendors and
phone operators and/or manufacturers, could lead to your phone and
your credit card merging. You might end up with an Voda-Visa phone,
an Ericsson-Amex phone and who knows an Orange-Mastercard phone?
So
much for making life simpler.
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