Saturday, April 10, 2010

Banking & Telco : Co-opetition

Porter Competitive Model is used to undertand and evaluate the structure of an industry 's business environment and the threats of competition to a specific company. The competition in an industry is based on five forces, e.g Intraindustry Rivalry, The bargaining of Buyers, The bargaining of suppliers, The treat of new entrants and the Threat of Substitute Products or Services.

Banking and Telco are actually two different industries, so evaluating Banking Industry using Porter Competitive Model I hardly think of Telco able to be as the treat of new entrants and providing a substitue products or services. However, telco companies have entered Banking Teritory and provide alternative products in the area of digital money or sometimes it is called eletronic money (e-money). This e-money mostly is used for micropayment.

In the 90's, banks in US has tried this with products such as MondEx, VisaCash, GeldKarte, however now telco also can provide similar functions. In Indonesia, telco provider such as Indosat has launched mobile commerce as well as Telkomsel with its T-cash. Banks like BCA also promote its e-purse which is called BCA Flazz, with similar purpose other businesses such as cinema and gas station also developed their own e-money.

A data that was quoted from Warta Ekonomi, telling that e-Money that is launched by Telco has increased quickly. In 2008, there are less than 1 million card, by the end of 2009 there are 2.9 million cards. Average transaction amount in Desember 2009 is about USD 3 / transaction. Overall Telco company has a customer almost 100 million, meaning that it is a huge potential market.

Phillipine is a another sample of which e-Money is very much developed. Mobile Banking with the with the helped of telco has become a huge succes in Phillipine. The services is also very rich including remittance services. So, at this stage Telco and Banks can be coexistence in providing this e-money services to customers.