Juniper: Ticking off the demand for mobile ticketing


Windsor Holden

Windsor Holden

There is an increasing public expectation that the mobile device, having moved on in recent years from the good old Gran Vals ringtone to a number of rather more sophisticated applications, can be used as an interface for pretty much all activities in everyday life. This expectation becomes stronger as more and more activities fall within its remit; so much so that when our expectation is not fulfilled, we feel aggrieved: if it can't do that, then it should; why can't it? And so on.

Thus--so the thinking goes--given that I can make a restaurant reservation, read a novel, watch the brilliant Parks and Recreation on iPlayer or buy a Ferrari Testarossa, then surely those clever chaps at [insert name of your handset vendor of choice here] will have come up with a way in which my phone, in addition to being a bookshelf/personal video recorder/Ferrari showroom, can also function as (and pay for) my ticket on the 07:43 to Basingstoke.

To which the answer is: it depends. It depends on what you want a ticket for; it depends on where you are; it depends on whether various stakeholders in the pertinent value chain have somehow managed to come to an agreement on little things like revenue shares and implementation standards, assuming they have agreed to meet in the first place.

Each of the key markets--airlines, trains, metros and events ticketing--has its own unique hurdles to be addressed before a ticketing solution can be implemented. However, in many cases, the pent-up demand for a solution may be such that within a comparatively short space of time service adoption soars. A case in point here is the Massachusetts Bay Transportation Authority, which introduced mobile ticketing on its metro at the end of 2012 (and where on-device tickets were validated by the conductors' iPhones): within seven weeks of launch, mobile tickets accounted for 10 percent of all MBTA ticket sales.

Interviews subsequently conducted by MBTA implied that consumers believed that mTicketing deployments were far more widespread than was actually the case in the U.S. Thus, high adoption levels of and familiarity with existing remote (and, increasingly, proximity) payments on the mobile device suggests that a significant number of consumers would adopt the mobile device as a ticketing channel were it to be introduced as such.

But while the prospects for mobile ticketing in general, fuelled by this pent-up demand, are encouraging, those for NFC Ticketing are rather less so, especially in the case of NFC transport ticketing. There have been trials and more trials, and some more besides, but precious few commercial deployments. Three years after the first pre-commercial pilot in Nice, France has only one other commercial deployment (in Caen). While in Singapore (another city which has thrown its weight behind NFC), only 15,000 mobile users had upgraded to NFC-enabled SIM cards, representing 0.2 percent of active SIMs in the country. The fact remains that the structure of most transport industries, with their welter of local players, militates against rapid decision making; indeed, militates against any decision making. Then factor in the issue that there is no agreement on implementation specifications, to describe the minimum functionality required for operation and ease interoperability between devices. (Interestingly, one spectacular growth area here is in the number of competing standards and certification bodies, whose major preoccupation appears to lie in disagreeing over the number of angels that can dance on the head of a contactless pin). Finally, add into the mix the fact that municipal authorities--whose budget for transport capital expenditure, in these times of fiscal restraint, is precisely two shillings and sixpence--will need some convincing if said two 'n' six is to find its way to NFC, and one does not have an environment that is conducive to the growth of NFC ticketing.

So NFC ticketing remains in limbo for the time being. Meanwhile, the conductors on the Boston metro scan barcodes on their iPhones--hundreds of thousands of barcodes--and commuter demand on the MBTA is fulfilled. Thanks to similar solutions, expectations are gradually being met elsewhere; the mobile remit is remorselessly, inevitably extended.

Dr. Windsor Holden is Research Director with Juniper Research. He has authored more than 50 full length reports for Juniper Research, including four editions of its much heralded Mobile Entertainment series: his recent reports include Mobile Commerce Markets: Sector-by-Sector Trend Analysis & Forecasts, Mobile Ticketing Strategies: Air, Rail, Metro, Sports & Entertainment, Mobile Music: Market Prospects and Mobile Content Business Models: OTT & Operator Strategy & Forecasts. Windsor has a PhD from the University of Leeds and is also a former Research Fellow of the Institute of Communications Studies, University of Leeds.