Fastlink to bid for m-payment market

Fastlink, the Jordanian mobile operator, is considering the establishment of a stand-alone subsidiary to develop and market its own m-payment system across the Middle East.

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By  Richard Agnew Published  September 15, 2003

Fastlink, the Jordanian mobile operator, is considering the establishment of a stand-alone subsidiary to develop and market its own m-payment system across the Middle East.

Targeted for launch by the end of 2003, the division will initially focus on Jordan before aiming to enter markets covered by Fastlink’s parent company, MTC-Vodafone.

“We strongly feel that we need to embark on an aggressive m-payment strategy,” says Saad Abu Odeh, chief officer, corporate strategy and operations, Fastlink.

“We are still in the proposal stage with our shareholders [but] we’re talking about potentially establishing a new m-payment subsidiary with an eye on the region. Priority would be given to MTC-Vodafone’s properties,” he adds.

The project is one idea of several put forward by Fastlink to help secure future revenue growth as Jordan’s market nears saturation in terms of subscribers.

“Now that the market has reached saturation, part of our diversification strategy is to pick the projects and ideas that are synergetic with our current business and that can leverage our current resources,” says Abu Odeh.

“The most important of these are our customer base, network and channels. All these assets would form the skeleton of the m-payment initiative. The base guarantees the market, the network guarantees the interconnectivity between the different m-payment devices, and the channels can make or break the initiative,” he adds.

With Fastlink holding a dominant market position in Jordan, Abu Odeh also says the initiative stands a high chance of success. “There might be another m-payment entity which focuses on our competition, but we feel that this is an area where we will be dominant because of our market share and the number of transactions that occur on our network on a daily basis. This will give us immediate economies of scale,” he adds.

Considering the slow emergence of common standards in m-payment, the operator is likely to favour partnering with an existing solution provider, rather than developing a proprietary system in-house.

“There’s no standardisation that we can leverage. I’m ‘pro’ circumventing the learning curve and partnering with someone who has the technology already,” says Abu Odeh. “We’ve been soliciting technical and commercial proposals from [firms that] are interested, and we’ve been putting them in a database,” he adds.

The creation of the new division could happen as early as the end of 2003. “I think a decision should happen within the next month or two. If the shareholders approve the project, we will have a company established by the end of the year, with a skeleton management that will start initiating the project,” he adds.

The first phase of the intiative would see wireless vouchers marketed at retail outlets as an alternative means for Fastlink’s pre-paid users to top up their airtime. Once users and retailers become accustomed to the system, it will be expanded to include other services such as utility bill payments and purchasing of mobile content.

“Initially, we’re talking about launching wireless vouchers to partially displace our top up cards. This will give us a good chance to succeed because the amount of change the customer is going to be subjected will be minimal,” says Abu Odeh. “Once the customers are comfortable with the system, we will have transformed our clientele to the virtual payment domain and then we can take them to other places,” he adds.

Fastlink will also use m-payment to drive adoption of its multimedia services, and vice versa.

“M-payment will be associated with the development of mobile portals in the Middle East. We hope that in the next two to three years there will be [more] Arabised mobile portals in the Middle East, and we feel that by [running] an m-payment [project] alongside that, both initiatives will cross support each other,” Abu Odeh adds.

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