Booming mobile commerce revenues top R50m per month

A Johannesburg-based value-added service provider is fast becoming South Africa`s first genuine mobile commerce success story, recording revenues of R48 million in December alone - while the country`s entire Internet retail industry recorded sales of just over R20 million in the same period.

Cointel, which provides easy-to-use systems for charging prepaid mobile accounts by cell phone, has quietly taken on the mantle of trailblazer for m-commerce by growing its monthly revenues from R30m in October 2000 to more than R50m in January 2001. The company has since signed contracts, which should raise its revenues to R100 million per month by the end of 2001.

"The reality is that m-commerce is here, and it`s alive and working well," said Ahmed Ayob, MD of Cointel. "By focusing on key customer needs of m-commerce rather than the technology, we`ve shown it`s possible to do m-commerce without turning your cell phone into a web browser, or needing any special devices. We`re simply taking advantage of what`s already in the hands of nearly 8 million South Africans already."

Paddy Gray, a director at Cointel`s payment gateway ECnet, e-commerce company within the PQ Africa, has no doubt that cell phone-based transactions will drive South Africa`s m-commerce boom.

"Far too many industry players have been distracted by technologies such as WAP and GPRS, and have failed to see the immediate opportunities presented by m-commerce in this country," said Gray, who calls Cointel "the best-kept secret" in m-commerce in South Africa today.

"The fact is, you can`t afford to wait for the promise of the next technology. It`s time to leverage existing capabilities in m-commerce."

For Gray, Cointel`s success is one that finally shows the enormous potential of m-commerce, even in areas where basic infrastructure does not reach.

Much of Cointel`s success has been on the back of two automated airtime recharge systems, Autocharge and Sigi Autocharge, which it developed for Vodacom. The Autocharge concept is unique in the world, combining cellular telephony, information technology and the banking system to allow Vodago clients to recharge airtime without physically having to buy a voucher. Customers simply dial in using their cell phones, key in a PIN, and follow voice prompts to purchase the airtime they require. The funds are automatically debited from their credit card and the airtime is credited to their Vodago account.

Sigi Autocharge, which allows Vodacom`s community service franchisees to order airtime for the phones in their phone shops, has seen Soweto become the unlikely centre of m-commerce in South Africa, far ahead of more glitzy areas like Sandton and Rosebank.

Although Cointel`s systems are currently limited to prepaid account charging, the technology can easily be deployed to cover other obvious B2C m-commerce applications like ticketing, flowers and shopping - but the real growth, predicts Ayob, will come from B2B applications, especially where suppliers communicate regularly with established customer bases.

"Cointel offers a uniquely South African solution for a South African situation to move beyond the hype and deliver on the m-commerce promise. This is the ultimate convenience proposition of m-commerce," she says. "A cell phone user can literally re-charge from anywhere and be making their next call within seconds."

"Cointel`s success in the m-commerce arena has been the relevance of our systems to the markets we seek to serve," says Ayob. "You have to offer something that is easier, cheaper, faster and more convenient, otherwise people won`t use it."

Cointel is currently investigating opportunities to launch and operate its systems in Europe.