MOBILE TRADING WILL INTRODUCE NEW INVESTORS

MOTILAL OSWAL, MOTILAL OSWAL

POSTED: OCT 02, 2010 AT 1014 HRS IST

New Delhi the Internet has redefined the ways in which financial transactions, including broking,
are carried out. The last few years have seen online trading in India develop and grow into a
mature business, with products being developed continuously and volumes stabilising.

Internet penetration in India is low, with 45 million Internet users. However, there are 127
million mobile users capable of accessing data services through their handsets. With mobile
trading, investors who lack Internet connections, together with investors who can’t trade through
wired Internet, can now enter the market. Though most users of mobile trading may initially use
it to have information at their finger tips, customers will increasingly start conducting business
through this medium.

Increasing smart phone penetration and the availability of Internet browsers as a basic feature in
entry-level phones is increasing the base of subscribers with access to the Internet. In the second
quarter of FY10, a total of 127 million subscribers were capable of accessing data services
through mobile handsets. The non-voice revenue mix of Indian wireless operators remains low at
10-11%, compared with 25-30% for mature markets due to non-availability of 3G services.

Thus, as these services become operational, we expect data mix to increase to 20-25% by 2015.
Apart from mobile applications, 3G services will also allow GSM operators to offer mobile
broadband services—a fast-growing market with a significant potential, given the negligible
fixed broadband penetration in India. 3G spectrum will provide telecom companies the
opportunity to offer real-time trading, as well as interactive and real-time equity research-based
services, thus leading to increased revenues through subscription-based research services and
increased data usage

A customer wishing to avail the facility should carry out a few pre-checks. The user should
ensure that the GPRS is enabled by the service provider and that the handset supports the
application/ portal. It is also important to note that the strength of the Internet connection plays
an important role in user experience, especially during travel, though most mobile
sites/applications take consideration of this aspect in design.

The variety of mobile phone devices and the technology associated in terms of operating
systems, browsers and screen sizes are a few challenges faced by brokers and their software
development partners.
Mobile trading is an extension of traditional online trading and works either through a browser or
an application provided by the broker. The low Internet speeds on mobiles also limits features,
compared to a web version of online trading.

The security of transactions pose challenges which are addressed by the guidelines laid down by
regulators. The use of encryption, secure socket level security and time-based password expiry
are a few key technological initiatives to secure information and transactions of end users.

At MOSL, we have launched our browser-based mobile trading system and are gearing up to
manage increased customer activity in the mobile space.