Customer Level Interoperability: A Story of Two Mobile Handsets
In this fourth post in our series on interoperability, we describe interoperability at the customer-level. Read the first three posts here.
In our work on interoperability, we find that there are some questions that we are unable to adequately address at the platform and agent levels alone. For instance, the opening of USSD gateways by mobile operators may allow customers of one operator to access services of another operator without either platform interconnection or agent sharing.
We identify two interoperability scenarios related to the mobile handset:
1. Customers can access their account through any SIM on the same network. For instance, one service in East Africa allows its customers to access their service from any handset as long as it is on their network.
2. Customers can access multiple accounts on one SIM. For instance, SMART in the Philippines allows customers to access SMART Money on their SMART SIM, as well as access accounts with various banks through different enabled interfaces.
Allowing customers to access their account via other SIMs or other accounts via one SIM increases the potential size of the market and increases customer convenience. In the latter case, providers may fear that customers will readily switch to another provider. MNOs run the risk that another service accessible to their subscribers will cannibalize their own service. Providers with large market share, in particular, may be less inclined to allow customers of other services to access their accounts. In addition, number portability has made it easier for customers to switch telecom providers.
Mobile money and the link between the mobile phone number and mobile financial services are supposed to help retain customers. Even if providers permit access to other services, they may use pricing, marketing and other features to try to keep customers from churning (e.g., make it hard to find the other service on the menu).
The government promotion of number portability is even more important when accounts are linked to mobile numbers. For instance, can customers take their mobile numbers to another provider if their mobile number has also become their financial account number? The bundling of the financial service with the underlying technology to provide that service may be considered restrictive on competition.
Governments are also looking into fair pricing and the availability of USSD gateway access by mobile operators. More secure than basic SMS as a bearer channel, USSD is still the preferred option for services that are MNO-agnostic. Governments are monitoring the anti-competitive practices of MNOs that have known to block USSD gateway access, price it too high, switch it off arbitrarily, or simply delay access to potential competitors, especially banks and third-party providers. In one market, the government has mandated that mobile operators make their USSD gateway available even to their competitors. Regulators may want to permit customers to change their MNO without having to change their bank account and vice-versa.
How important are interoperability questions at the customer–level? With the increasing use of feature phones and smart phones, what should policy makers expect to emerge as new challenges to interoperability at this level?
- Kabir Kumar & Michael Tarazi