M-Payments Key To m:tel's Expansion

Bosnian multi-services operator m:tel plans to introduce mobile payment services in 2014 as part of its plan to increase its appeal to consumers and raise its profile as a fully integrated services provider. BMI believes the initiative will provide a much-needed boost to the Bosnian mobile market and for m:tel in particular, which continues to report variable subscriber acquisition and retention rates.

Majority-owned by regional fixed-line incumbent Telekom Srpske, m:tel served 1.422mn mobile subscribers as of Q313, yielding a market share of approximately 41.4% according to BMI's mobile operator database. Although its user base increased quite markedly in Q313, by 6.1%, it was actually down by 0.5% y-o-y. Despite its ability to offer converged fixed-line, broadband, IPTV and mobile services, its limited geographic footprint means it lacks the appeal of its principal rival BH Mobile (45.3% market share).

Mobile Payment Adds Value
Bosnia Mobile Market Forecasts, 2010-2017

Mobile billing specialist Fortumo reports that its solutions potentially reach all 3.3mn mobile subscribers in Bosnia-Herzegovina but that a meagre 200,000 Bosnians own credit cards and a little over 45% of the adult population has a formal bank account. Meanwhile, BMI forecasts GDP per capita to grow steadily from BAM7,023 (US$4,939) in 2012 to BAM9,347 in 2017; we believe Bosnians' willingness to spend more on goods and services will increase and, therefore, a wider choice of payment mechanisms should find an appreciative audience

As m:tel reportedly will be the first mobile operator to offer a dedicated, open mobile payments service, BMI believes the move would raise its appeal among consumers and help it deal with its headline subscription churn issues and stabilise revenue generation. This should then help the operator focus on growing spending on virtual goods and services, such as music, video and games, particularly where content distribution deals can be struck with local content producers. Having a secure, dedicated mobile payments system in place would instil confidence in local partners.

Owing to market saturation, the Bosnian mobile market is forecast by BMI to grow only from 3.466mn subscriptions in 2013 to 3.760mn by 2017. With large numbers of subscriptions - mostly in the prepaid segment - considered to be technically inactive, operators are struggling to monetise value-added services and reinvest in 3G/4G networks and services. Mobile payment solutions are an important part of a much broader service-based ecosystem that can help deal with this struggle, BMI believes.

This article is tagged to:
Sector: Telecommunications
Geography: Bosnia-Herzegovina

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