Telekomunikacja Polska (TP SA) and mBank are to establish a new mobile financial services company. The move reflects the incumbent operator's effort to diversify its revenue growth opportunities and will assist the newly-restructured mBank in reaching more customers in the retail market. BMI believes the new unit will be well-placed to take advantage of the growing demand for branchless banking services in Poland and will be aided by mBank's participation in the development of a national mobile payments platform.
Mobile financial services are to be offered under the Orange brand, as TP SA is partly owned by the France-based multinational. TP SA will be responsible for marketing initiatives and the acquisition of customers in the consumer and small and medium-sized business sectors. mBank will provide banking services on behalf of the partnership. The joint venture will be managed by mBank, although BMI believes Orange will provide considerable support to key decision-making processes, given its success in rolling out mobile money services in other markets worldwide.
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Services are expected to be launched later in 2014, although mBank has already launched a mobile banking application for smartphone and tablet users. It is targeting the 3.695mn retail banking customers it serves in Poland with the aim of quickly boosting that customer base, which has grown at a relatively sedate pace in recent quarters, from 3.409mn in Q112. With Orange serving 15.325mn mobile subscribers and millions more fixed broadband subscribers at the end of 2013, mBank clearly sees significant potential for expansion, particularly in areas of the country not yet penetrated by its branches and automated teller machines (ATMs).
Orange, too, has been recording insipid mobile subscription growth of late and its fixed broadband business is under threat from strengthening competition in the multi-service operator sector. Expanding into mobile financial services should make it more attractive to both existing and new customers. However, it will not be the only provider of such services and it will have to work hard to differentiate itself from rival service providers, most notably T-Mobile.
The partners will be leveraging the IKO mobile payments platform developed by PKO Polski Bank and supported by Alior Bank, Bank Millennium, Bank Zachodni, mBank, ING Bank Silesia and eCard. PKO reported that 60,000 IKO accounts had been activated by July 2013 and that transactions totalling PLN40mn (US$13.1mn) had been completed during a six-month period. Although BMI is generally supportive of bank-led initiatives to develop mobile commerce platforms, we tend to take a fairly cautious view regarding projected user engagement and commitment levels. With mBank establishing a partnership with a large and well-established telecoms operator, we take a more bullish view of the commercial viability of the new national mobile payments platform, but caution that there is still a long way to go before the service contributes significantly to both partners' revenue streams.