Many things have changed since the first mobile call was made in Chicago in 1979. Then no one could imagine that the mobile phone would enable man to make calls so easily to any part of the world, and what is more, to receive video images, read world news from a phone display or buy products or services over the Internet... All of these things can be done in just a couple of seconds, doing nothing more complicated than just pressing phone keys. What was just a sphere of fantasy in the late 80s has been realised only one decade later.
In May this year a Motorola Symposium held in Barcelona suggested that soon conversation, the traditional form of communication, would be replaced by data transfer via the mobile phone. In particular, the introduction of 3G technologies, designed for high speed and quality of data transfer, will decrease the share of voice communication on the market by 30 or 35 per cent. The Symposium presented one of the novelties of 3G: the possibility to carry out financial settlements and transactions by mobile phone.
Mobile Commerce is the worldwide name for commercial and business operations carried out by mobile phone. Today more than 19 million people have the possibility to make financial settlements by mobile phone, and this number is constantly increasing.
The development of Mobile Commerce was preceded by the so-called e-commerce, which involved the participation in bids using the Internet. The chance to purchase products or services over the Internet is not a new thing any more. However, the possibility to do such things by mobile phone can be considered a real achievement. Though comparatively young, e-commerce has many users with a turnover of billions of dollars. Today the number of mobile phone owners has reached 400 million, and a considerable number of those people can be deemed as potential users of different types of transactions made by mobile phones.
Different communication companies and financial institutions offer various models of effecting trade and business operations by mobile phones. The British company Cellnet is considered to be the pioneer in Mobile Commerce having offered an absolutely new type of service since 1997. Subscribers can, using a model specially designed by Alcatel (Alcatel One Touch Pro) and a Gemplus SIM equipped with updated features, watch the operations made on their credit cards on the display of their mobile phone and check the amount of credit remaining.
This service offered by Cellnet became the basis for a new project in e-commerce - a joint initiative by France Telecom and the French banks Credit Commercial de France and Credit Mutuel. The project gave subscribers the possibility to make purchases over the Internet with the new model manufactured by Motorola, the Motorola StarTac-D (very popular among our customers) used as a terminal. The principle of the system is quite simple: the subscriber issues his order by phone, which is followed by a short message and product pricing on his display. If he finds the price acceptable, he puts his credit card into the phone, dials a personal code, the corresponding amount is withdrawn from his account and the transaction is completed. Information safety is guaranteed by the credit card reader built into the mobile phone.
Leading manufacturers of mobile phones have worked intensively to design new models intended for the use of credit cards while operating companies have been trying their best to make such a service readily available. Subscribers to the Austrian company Mobilkom can buy a train ticket by mobile phone without paying even a shilling in cash. The point is that the subscriber orders the ticket in advance and pays the corresponding amount later as it is included on his telephone bill. The only thing he has to do to receive his ticket is to submit his mobile phone at the station, or to be more exact, the short message on his display containing encoded information with the indication of the amount paid.
New technology has encouraged companies to get involved in e-commerce and most of these companies specialize in selling products or services over the Internet. WAP (Wireless Application Protocol) is the name for a new standard allowing the owners of mobile phones to enter the Internet and examine the information offered on WWW pages on the display of their mobile phones. Experts say the sphere already covered by mobile communications is so vast that very soon it will completely change the working style of business people worldwide.
One more thing our readers may find interesting with respect to e-commerce, is a joint project offered by the Swedish company Ericsson and Visa International aiming to increase safety in e-commerce. One of the first joint products is a model supposed to appear on the market by the end of 2000. The model has, in addition to voice signal transfer equipment, a built-in credit card reader and data transfer system and, appropriately called, "e-purse".
Since 1999 Nokia has been implementing a joint project together with the Finnish-Swedish group MeritaMondbank, a leader of electric banking activity in Europe. The project will enable mobile phone owners to purchase products from the Internet using a Visa credit card and to enjoy absolute safety. Safety has always been associated with the effecting of operations by credit cards and in order to achieve a high level of safety in e-commerce, a consortium has been set up by European telecommunications companies. A number of well known companies such as SmartTrust (Finland), Brokat Infosystems, Siemens, Manessman Mobilfunk, E-Plus Mobilfunk (all from Germany), etc. are members of the Consortium which aims to work out a standard for a digital signature, which will undoubtedly increase the safety level while purchasing goods or services by mobile phone.
The rate of development of mobile and e-commerce is so fast that it has attracted the attention of many companies which had nothing in common with mobile communications earlier. Bill Gates, the President of Microsoft, a company with an international reputation, believes that new technologies are of paramount importance in the development of mobile Internet. He understands the significance of new projects and is interested in its large-scale implementation so much that Microsoft has made a decision to start negotiations with leading manufacturers of mobile phones in order to become the main provider of software.
The potential market of users interested in Mobile Commerce is already huge. Analysts believe that by 2003 the number of Mobile Commerce users will reach 111 million. To encourage this, 15% of mobile phones to be issued and sold during 2000 and 2003 will be equipped with software enabling the owners to receive necessary information from the Internet, such as listing and prices of goods and services, sport results, weather forecasts, train and flight schedules, currency rates and stocks and shares quotes. By the end of this year mobile phones will be used by 40 million customers to effect banking operations.
Soon the world, together with Magti GSM subscribers, will experience fantastic possibilities. This article was written to help you start to comprehend technical innovations more easily now, and to use them properly and efficiently in the future.
GIORGI AVALIANI
Haed of the Sales and
Distribution Deparment
MAGTICOM