Advanced M-Pay shifts strategy

Advanced M-Pay shifts strategy
Bangkok Post (17 October 2007)

Expands services in bid to turn profitAdvanced M-Pay Co, the mobile payment arm of AIS, is penetrating the online community and making inroads into the high-margin international direct dialing (IDD) services in an effort to turn a profit in 2008 for the first time ever. The 70:30 joint venture firm between the local cellular market leader Advanced Info Service and Japan's NTT DoCoMo expects the strategic shift to improve its performance by 30% next year in terms of transaction volume and value, revenue and profit. Managing director Waroonthep Watcharaporn said Advanced M-Pay expected to increase the number of active M-Pay users from 600,000 now to one million by the end of 2008. Transaction volume should rise from 35 million to 45 million transactions for a value of 2.6 billion baht, he said. The company would post a profit on expected revenue of 175 million baht next year. Advanced M-Pay has invested 300 million baht in equipment and software. Mr Waroonthep said the company was stepping up promotions of mobile payments as the second M-Pay flagship service line in 2008 under the theme ''Your mobile, Your wallet''. ''We are working closely with AIS to allow our prepaid customers to make overseas calls via their mobile handsets through M-Pay,'' he said. Advanced M-Pay has posted losses since its inception in August 2005. Mr Waroonthep attributed the losses to a lack of confidence in mobile payment security, less marketing and the razor-thin margins of M-Pay services, dominated by small transaction fees for topping up refill cards. Advanced M-Pay expects to register 35 million transactions this year, 90% of which would be One-2-Call prepaid customers refilling accounts through 40,000 M-agent vendors. The remainder involved bill payments and purchases through vending machines. In 2006, the company had only about 100,000 transactions for 10 million baht. Mr Waroonthep said the company was shifting its focus from One-2-Call customers to internet users and the existing one million AIS non-voice customers. The company is in talks with several commercial banks to provide mobile ATM services. The service would enable customers to pay bills for credit cards and conduct financial transactions through handsets. AIS now allows customers to pay water and electricity bills through their handsets. It will allow GSM postpaid customers to pay bills through M-Pay over the next two months. The company is also on the verge of developing Java software to improve the user interface. ''We expect the proportion of transaction volume between end users and customers conducting financial transactions through M-agent at 40:60 next year, compared with 10:90 currently,'' he said. Mr Waroonthep said the company was also preparing to introduce a shopping website, providing auctions and a variety of trendy products such as iPhone mobile handsets and Harry Potter books. Customers will need to pay for the products they buy online through the M-Pay service. The web is aimed at creating an online community to promote M-Pay. The country's mobile payment market would explode once near-field communications technology takes hold in the Thai market, expected over the next two years, Mr Waroonthep said. With the technology, customers could use mobile phones to pay for transport fees, including the skytrain and s