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Australian innovation lets the people of PNG pay for electricity using mobile phone credits (and what this means for all technology developers)

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mHITs (pronounced Em-HITS) first came to Anthill’s attention as a finalist in Innovic’s Next Big Thing Awards in 2007.

Since then, the mobile payment company has popped up in our 2009 SMART 100 awards and wowed our readers with its Easy Canteen application, which enables parents to pay for their children’s school lunch orders by SMS.

As managing director Harold Dimpel explained to us way back then, “mHITs is a kind of electronic wallet. It allows you to send and receive money by text message, regardless of which mobile provider you are with.”

This week the company announced the first anniversary of its Easipawa (pronounced Easy-power) application, a payment service that allows consumers to purchase pre-paid electricity using their mobile phones in Papua New Guinea.

The Easipawa service was developed in conjunction with PNG telecommunications provider DataNets Limited and allows subscribers of the mobile phone carrier Digicel PNG to purchase pre-paid electricity by using their Digicel pre-paid airtime credit.

The service now accounts for the purchase of an estimated 40% of pre-paid electricity in PNG.

The rapid adoption of this service obviously demonstrates the suitability of mobile payment technology in developing countries. Yet, it also highlights a trend that Australian software and application developers best not ignore.

The disruptive frontier

Only days ago, at the Young Entrepreneurs’ Night Out Brisbane, I was treated to the news that Australian entrepreneur (and intrapreneur) David Novakovic was finding great success with his Twitter application (m.tweete.net) in… wait for it… Indonesia.

I asked him to provide some statistics about his app’s popularity. He proudly informed me that it generated 80 million page impressions last month. To put that in perspective, the Audit Bureaux of Australia (ABA) offers a web ranking service. At the top of the ABA’s list is Gamespot AU, which generates 18 million page impressions per month.

I asked him why Indonesia. He simply shrugged, as if to say, ‘Isn’t it obvious?’

In many countries, electricity is only available to consumers as a pre paid service. Houses are fitted with a pre-paid electricity meter with a keypad and a display. Consumers purchase a quantity of pre-paid electricity units at their local electricity shop where typically a receipt is printed containing a unique code or number. This code or number is then entered into the meter. Electricity is dispensed and metered until the pre-paid amount runs out.

Also in many countries, a desktop PC is not a common possession. It is shared by a family, an extended family or village. Yet, many members of the community will still have access to a mobile phone.

mHits’ Easipawa service now means pre-paid electricity can be purchased 24 hours a day, seven days a week, from anywhere in PNG with Digicel coverage. Applications like m.tweete.net mean that people in developing economies without access to a personal computer can enjoy the benefits of a service like email, without the PC or heavy download cost.

The phone as vitamin or painkiller

There is, of course, one further logical extension to mobile’s continuing role in global commerce.

Use of the mobile phone as a payment device is the obvious solution for people who do not have access to traditional banking services.

Once again, people in developing countries often lack the formal identity requirements that traditional banking services require. The lack of bank branches, limited number of ATMs, reduced access to the Internet and the general low level of financial literacy in developing countries are contrasted by the large-scale uptake of mobile phones in these same markets.

Places like Papua New Guinea also offer further unique challenges due to its isolated geography and high proportion of ‘unbanked’ citizens.

But what about the needs of consumers in Australia? What do the needs of PNG consumers have to do with the average iPhone user reading this in, say, a cafe in Potts Point?

At a recent X Media Lab event, Nick Yang, one of China’s most successful young entrepreneurs, Co-Founder of KongZhong, China’s leading mobile internet company, and ChinaRen Inc, China’s leading youth website, offered this advice:

“Are you selling vitamins or painkillers? You might buy vitamins to feel healthy, no hurry. But if you get a headache… nothing will stop you buying those painkillers. It’s much easier to sell painkillers.”

At the moment, it is easy (perhaps too easy) for Australians to purchase items on the go. And, so far, most mobile-phone related banking solutions have failed in Australia as a result, simply because the service is only something that’s nice to have.

While mHITs already has a service that allows consumers to pay for coffee or other food and beverage items using their mobile phone by sending an SMS (and, indeed, consumers can also use the mHITs service to pre-order their items before arrival at a venue, meaning less queuing and waiting and faster service), does the service negate any immediate, identifiable pain?

Probably not… initially.

Disruptive technologies service the least profitable first

When Clayton M. Christensen released his seminal book The Innovator’s Dilemma back in 1997, he hatched a term that would fuel the fervour of dotcom mania and send the world’s leading corporations into a spin.

Christensen exposed a crushing paradox behind the failure of many industry leaders.

By doing what good companies were supposed to do – focus on pleasing their most profitable customers – leaders were paving the way for their own demise. How? By ignoring ‘disruptive technologies’ – new, cheaper innovations that initially target small customer segments but evolve to displace the reigning product.

In 2007, I interviewed Deloitte director and co-author of Christenson’s sequel, The Innovator’s Solution’. You can read the full story here. But the main takeaway was that the most successful disruptive technologies are the ones that service the least profitable.

A variant of a mHits cafe payment service was mentioned earlier. Easy Canteen. This uses the same technology to provide parents and students the ability to order and pay for school canteen lunch orders by SMS.

Is it a vitamin or a painkiller?

Many parents and students are likely to place this particular service in the latter category.

And while there are many differences between Australian school students and village dwelling citizens of PNG, they do have one thing in common. They are unlikely to be attractive to any organisation designed to assist the most profitable.

They are, in stark contrast, designed to service the least profitable.

So, who are you servicing?

The mobile revolution has many lessons left. But perhaps the most pertinent to Australian entrepreneurs and technology developers right now is the power of any mobile device or application to open up new markets and the power this reach offers to test the potential of the world’s next disruptive innovation.

And, if you can service the least profitable and still make a profit, imagine how that might translate when you start to service customers that do have money to burn.

Image by *christopher*

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