Asia must manage risks from mobile commerce boom: Experts

Asia must manage risks from mobile commerce boom: Experts

SINGAPORE (AFP): The Asia-Pacific region has greater potential
for business via mobile phones than any other market but there
must be safeguards against non-payment and other risks, experts
said here on Tuesday.

Telecom operators and wireless technology developers attending
the CommunicAsia trade fair said cellular phones would boost
mobile commerce (m-commerce) and encourage consumers to do
business the wireless way.

Dirk Leopold, head of mobile commerce for the Asia-Pacific
region of Brokat Asia Pte. Ltd., a German company, said m-
commerce has more potential than electronic commerce using
computers.

This is because hand phones are more widely available and more
secure, as well as portable.

By 2004 there will be more mobile phones than television
households in the region, he said.

"We believe in general that mobile commerce is going to be
successful because it overcomes all the obstacles that are
inherent in Internet transactions," he told a forum.

Craig Will, director for Asia-Pacific and Japan of Palm Inc.,
which popularized personal digital assistants (PDAs), said "one
thing we find quite unique is that the Asia-Pacific has a unique
wireless infrastructure emerging."

But Hoong Ngee Khoon, regional director for the global
consultancy firm Cap Gemini Ernst and Young, cautioned against
inherent business risks.

With the volume of business done through the mobile phone seen
to boom, it is important to determine whether consumers, telecom
operators, merchants or financial institutions will bear the
risks, he said.

"Quite a few years ago in the Philippines when mobile phones
had just taken off, mobile phone companies were busy going out
there to acquire subscribers so they did not look into the credit
risks. A couple of mobile companies went bankrupt because
subscribers cannot pay," he said.

"In those scenarios the mobile operators actually bear the
risks. So in a mobile economy, this issue has to be addressed
especially if we are using the mobile phone to make purchases,"
he told AFP.

In buying a can of Coke using a mobile phone for example, the
amount can be charged to the buyer's telephone bill, putting the
risk on the carrier.

But in purchases involving bigger amounts, there is a question
of who will bear the risk, he said, noting that telecom operators
are not equipped to manage financial risks.

"This leaves room for who will bear the credit risk. And
there's a lot of discussions around this area," Hoong said.

"We have been working with operators and financial
institutions to see how we can come out with a hybrid model for
financial services."

One model is issuing pre-paid mobile phone cards, but this
would limit the amount of transactions. A post-paid scheme would
lay the risk solely on the consumers and the merchants, he said.

"We believe that there will be a shift from the merchants to
operators and to financial services and consumers. Right now,
merchants manage the risks but over time, there will be a spread
because of competition," he said.