THE EVOLUTION OF THE ITALIAN TELCO MARKET: H3G STRATEGY ON MOBILE PAYMENT

Abstract

My final dissertation aims at describing an innovative business idea that the Italian mobile operators (with the guidance of the Groupe Speciale Mobile Association - GSMA) are developing: Mobile Payments. By combining mobile connectivity together with NFC (Near Field Communication) based services, financial institutions, mobile operators and retailers can provide customers with a unique digital consumer experience, in order to acquire more value from their engagement.

Specifically, the dissertation is going to analyze the economic benefits that innovation can bring to the Italian Telco market, with a special focus on the last player to join this highly competitive arena: H3G. In particular, it will be considered why Mobile Number Operators (hereafter referred to as MNOs) are not only challenging on pricing strategies, but the fight for market share now is also based on technological innovation. The main enabler that will be analyzed in this paper is NFC: thanks to this technology, MNOs are broadening their commercial offer as they can provide a variety of brand new services.

The GSMA, which represents the interests of mobile operators worldwide, is pushing for the harmonization of technological and architectural stardards, in order to “drive economies of scale by creating a common framework for implementation and product interoperability”.

My final dissertation will be structured in five chapters:

• First, I would like to describe the rapidly changing Italian telco market, the role of collaborative strategies for intra industry companies, and the reason why mobile operators are moving toward innovative digital solutions (Mobile Payment and mWallet) to look for new stream of revenues. • Complementary to MNOs strategies, banks and financial institutions are changing their business models in order to meet technological demanding customers and take advantage of the momentum mobile payment is gaining. • The third chaper will examine the mobile payment in Italy: starting from the definition of NFC up to its benefits. It will be shown how the role of the GSMA - pushing for technological standardization - has been fundamental for the cohesion of the four Italian mobile operators. Shared business processes and architecture will be analyzed and then the MNOs progress developing their mWallet monitored. • A business case will be presented from the perspecitve of H3G, one of the four Italian telecommunication operators. The analysis will start from “the reason why”, passing trough the project economics and end with the marketing proposition and expected forecast on the commercial lauch. • A look at future scenarios is fundamental to have a comprehensive view, as the mobile payment will serve as a trigger to a wide arrange of new services. Couponing & Loyalty, public transport ticketing, digital identity and the voucher business are only few examples of how this technological revolution will change consumers’ life.