telecom

Wireless Growth Prompts New Cashless Payment Trial

motorola smarphoneWireless subscribers racked up more than 1.12 trillion minutes during the first six months of 2008, accounting for $72 billion in revenue-- up 10.9% from the same period last year, according to a study released this week by CTIA, The Wireless Association. Some believe the uptick could make mobile advertising and marketing the perfect tool to reach consumers.

The growth in popularity prompted Texas Instruments (TI) to run cashless payment trials with credit card companies like MasterCard and Visa. Rather than carry around a plastic card, consumers affix a branded one-square-inch sticker to the back of their phones. "MasterCard and Visa are looking for aftermarket products, such as this phone sticker, to offer cashless payment options," says Julie England, VP/GM for TI's radio frequency identification (RFID) business. "This is a step toward electronic payments without having to install anything in the phone."

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Like American Express's credit card Blue, the RFID chip inside the sticker makes it possible for consumers to tap and go when purchasing items. Aside from credit card companies, McDonald's, Starbucks, Nike and other brands could use the sticker as loyalty or payment cards.

Text messaging also set new records this year. In June, subscribers sent 75 billion messages, about 2.5 billion daily--up 160% from the 28.8 billion messages reported in the year-ago month.

Aside from text messaging, consumers find downloading and sending pictures and other multimedia messages easy to do, which provides more opportunities for brands to connect with wireless subscribers. Subscribers sent more than 5.6 billion multimedia messages in the first half of 2008--nearly as many as they sent in 2007.

The study also suggests that revenue from data services rose 40%, to $14.8 billion, between January and June 2008, compared with the same time period last year.

Good news for brands that plan to spend an estimated $2.6 billion for display and search mobile advertising next year to reach consumers, according to eMarketer. That's up from $1.5 billion in 2008.

The increase might signal a brighter future for mobile advertising and marketing, but a recent study from Nielsen Mobile points to several factors holding back campaigns in the U.S. The study says advertisers and agencies are not yet fully aware of the size of mobile audiences, the complexity of mobile ecosystem intimidates media buyers, and there is a lack of trust in the medium because of survey results showing consumers are not receptive to mobile advertising.

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