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Going mobile, do-or-die.
Thursday, 23rd October 2008
Source : Abacus International
Mobile phones are now the most pervasive form of technology and harnessing the new technology available for the mobile platform must be a central part of travel agents' strategy for growth.

President and CEO of Abacus International, Mr Robert Bailey says with some 1.5 billion mobile subscribers in Asia Pacific the sheer penetration makes mobiles a powerful tool for interacting with consumers.

This figure is projected to grow at a rate of 15.4% CAGR according to Euromonitor. The top five countries for mobile subscribers; China, India, Japan, Indonesia and Pakistan account for 1.2 billion or 80% of mobile subscribers in Asia Pacific.

China already has the largest number of mobile phone subscribers, 540 million as of March this year and India has overtaken the United States to become the second largest mobile market. According to telecommunication companies in the two countries, China and India are adding, on average, a total of 15 million new subscribers each month. 

"Currently three billion people in the world have access to a mobile phone and only one billion to a computer," says Mr Bailey. "With mobile phone users expected to rise to four billion by 2010, it is not difficult to imagine the now humble cell phone will become the world's portal to the internet as well as the key to inter-personal communication."

The mobile market is filling with relatively cheap handsets that have the functionality to access the internet and carry out searches, downloading and purchasing anywhere the user wishes.

In Japan, mobile technology and user confidence has been at this sophisticated level for many years and while it may be a less mature market technologically, many Indian mobile users can search, book and pay for travel as well as receiving their ticket on their mobile phone.

"Mobile as a travel tool is still a very context sensitive channel," says Mr Bailey. "Most business and leisure travellers currently view mobile as a method to receive real-time updates and information, such as flight delays, gate information and directions. While the capability obviously exists, there is not yet a universal demand for using a mobile to book the next family holiday."

However, Robert Bailey believes that the travel industry has the opportunity to drive innovation in the mobile marketplace as consumer needs and corporate wants are very much aligned for the sector.

"Travel is by its very nature mobile and travellers benefit from real-time information and increased simplicity in their travel arrangements."

"Agents and airlines both see increased efficiency and richer contact with their more-informed consumers, meaning the whole travel machine becomes just that little more well-oiled," says Robert Bailey.

 Asia plays leapfrog

The development of advanced mobile technology is likely to have the greatest impact in Asia and this is all due to ‘leapfrogging'.

Leapfrogging is the extent to which developing countries can accelerate their development by skipping over inferior, costly technologies and adopt the most advanced ones. And the growth of mobile in the region is a text-book example.

In the two biggest developing countries, China and India, it can be a struggle to find a corded phone connection, or land line, however many people have cell phones. On a per capita basis computers are also scarce with far fewer people having access to a home computer than wi-fi-capable handsets.

In India a high-end phone and a personal computer can be purchased for approximately the same price, however, computer usage is around one fifth the level of mobile usage (PhoCusWright).

A recent study by Frost & Sullivan of eight emerging markets in Asia (Bangladesh, Cambodia, India, Indonesia, Laos, Pakistan, Sri Lanka and Vietnam) show that in 2007 these markets accounted for just over 37% of all mobile phone users in Asia Pacific, or 487 million mobile users. By 2013 that number would leap to over 1.13 billion, or 46% of users.

Frost & Sullivan's report points out that these eight markets have mobile penetration rates of below 50% and this reason these markets show the most promising prospects for mobile industry growth.

"Mobile in the Asian context is quite different to the rest of the world, as there is not a huge amount of legacy technology to transition consumers away from," says Abacus Vice President of Agency Marketing, Mr Brett Henry.

"For many people a mobile phone is the most advanced technology they have access to and by empowering that device with more ‘computer-like' functionality, suddenly a massive group of consumers are literally mobilised." 

Spurred on by the incredible popularity of the Apple iPhone and Nokia N-Series handsets and the very recent unveiling of Google's Android mobile operating system, more and more technology companies are getting into the mobile market.

"Mobile is where the battle for technological supremacy is being waged, and not just by traditional mobile companies," says Brett Henry.

"Microsoft and Apple and even web-based companies Google and Yahoo have entered the fray. If these companies see the future has gone mobile, the travel industry should not wait around for an invitation to join in."

Have phone, will travel

The travel industry is already at the forefront of mobile application development which benefits the consumer and broader industry alike.

"There is obviously a great synergy between travelling and the use of mobile technology. Most travellers carry a mobile phone and many would like their phone to do more for them," says Abacus' Robert Bailey.

In the recent Travel 2.0 Consumer Trends survey from PhoCusWright, 64% of respondents from the United States were keen to use their phone to access directions, over half to receive flight status alerts and over a third thought receiving special offers on their phone would be a bonus.

However, another study by the same group revealed that 41% of respondents had only used their phone for making calls and just over half had sent or received text messages. The numbers dropped dramatically for those that had accessed the internet and again for those that had purchased anything using their handset.

The same report, however, points to the advent of more accessible mobile technology such as Apple's iPhone, as a turning point in mobile functionality saying "Usage is expected to increase in all age groups as more user-friendly devices (such as the iPhone) become mainstream." 

But the travel industry is not simply waiting for the technology to evolve and has already begun utilising the capabilities of the current generation of mobile phone.

Late in 2007, IATA advised its members to upgrade their boarding pass bar-coding systems from traditional magnetic, or one-dimensional, barcodes to what is referred to as two-dimensional barcodes that store more information.

Unlike the magnetic barcodes, two-dimensional barcodes can be scanned from both paper tickets and mobile devices such as a phone or Blackberry.

At the beginning of 2008 Continental Airlines trialled a paperless boarding pass system using mobile phones to carry the encrypted barcode on the screen of a passenger's mobile phone. And a number of North American airlines have followed suit with trials of their own.

Harnessing this sort of technology is more than just a case of keeping up with the corporate Joneses. Streamlining the check-in process can create huge savings with an automated, kiosk-style check-in costing an estimated US$2.50 per passenger, compared to the traditional counter system which costs US$9.00 per passenger.

And a recent study from Cambridge University picks that ‘going mobile' will save the travel industry more than US$600 million over one year, and that figure will grow as the technology becomes even more advanced and readily available.  

While the technology is updating and streamlining the aviation industry, it presents a whole new range of opportunities for the broader travel retail sector.

With mobile penetration on the rise in India and proportionally much higher than computer usage, tapping into the mobile network was a vital step for leading online travel agency MakeMyTrip.

In February 2008, MakeMyTrip announced a new MCommerce platform to give its customers the ability to search, book, pay and even receive the e-ticket on their mobile phone. The applications are available to 60 million subscribers on a specific provider network in India and in addition to the company's traditional online site.

This search process is initiated when the user sends a text message and the response is a menu allowing search, purchase and receipt of flights. The system does not require users to have GPRS access but works over the mobile network on all handsets.

"MakeMyTrip's MCommerce platform was conceived, created and executed in India and has been received well by consumers there. It shows the flexibility that can be achieved with mobile solutions in a particular market if you know your technology and you know your end users," says Brett Henry.

Mr Henry says that travel agencies like MakeMyTrip have created a business of being at the forefront of new travel technology, but new solutions mean that now every agent can get online and go mobile.

"Abacus will be launching a solution that provides high level online and mobile functionality to any travel agency," he says.

"Abacus VirtuallyThere not only allows travellers to access flight information online or from their mobile device. It also proactively feeds destination information to the traveller upon arrival. And in true web 2.0 style, the communication is not one-way, agents can send updates and assist their clients around the clock, even when they are on the go."

Mr Henry adds that agents should not get too overwhelmed when it comes to mobile solutions as most mobile users are not yet using their phone as their primary access to the internet.

"While this is already changing, a solution like Abacus VirtuallyThere offers as much or as little functionality as is required. The capabilities of mobile phones can differ wildly, as can the services of different network providers, so it is important that our solution is functional and flexible enough to move with the ever-changing technology."

Abacus VirtuallyThere is one of the new generation of intelligent mobile platforms, designed to optimise travellers' viewing experience by responding to their device-type. Agencies using the solution can offer clients round-the-clock access to their travel schedules, instant notification of flight delays and changes to gate information, confirmation and details of ground reservation and information about entertainment options regardless of the model of mobile phone their client is using.

"When an agency adopts a service channel solution such as Abacus VirtuallyThere, they put a travel agent into the pocket of every one of their clients. This has implications not only for increasing agency efficiency, but also improves customer satisfaction and reinforces the travel agent's position in the travel supply chain," says Mr Henry

Phoning ahead

From the launch of the very first mobile phone in 1978, to the unveiling of Google's Android operating system 30 years later, the technology in cell phones has accelerated almost as quickly as the number of users.

Last year almost 800 million people used their mobile device to access the internet at least occasionally. The iPhone and similar smart phones are making it easy and more habitual for consumer to check emails and begin using mobile devices for more commercial activity.

The mobile industry is already buzzing about 4G technologies that will make internet access faster, more accessible and cheaper.

"The new mobile technology is blurring the lines between online and mobile," points out Mr Bailey. "However, there are also pitfalls as accessing the internet on a mobile device is very different to a computer with smaller screen size, less data capacity for searching and often slower processing speeds."

According to a recently survey from mobile technology company The Handy Group in the UK, half of travel agents questioned were looking to develop specific mobile-friendly websites over the coming year.

"Mobile may be pervasive and accessible, but it also has limits and to capitalise on what the medium has to offer, travel agents need to think very carefully about what they want to achieve with the technological capabilities and what their consumers are able to use their phones for," advises Mr Bailey.

However, Mr Bailey believes that just as the travel sector has a vested interest in driving advances in mobile, Asia is the region where the greatest impact of those advances will be felt.

"With proportionally low internet usage, vast distances and cultural differences between countries, mobile phones are the most important piece of technology in this region."

"As the functionality of the mobile handset explodes and the price of using these new features drops, consumers will become more connected to the world through their phones and it is important for Asia's travel industry to be at the crest of this wave, not trying to play catch up," says Mr Bailey. 
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