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eBay highlights growing importance of m-commerce

Mobile broadband presents the single largest opportunity for operator revenue growth until 2016

Research released by eBay’s UK operation this week claims that m-commerce could deliver a £4.5bn boost to Britain’s economy by 2016 and a further £13bn by 2021, if nurtured correctly. The research gives the auction house yet more reason to go after Google for allegedly upsetting its mobile activities last week.

The analysis was carried out by retail research firm Verdict, on 1,500 UK consumers in May, concluding that m-commerce in the UK is to be worth £19bn by 2021 as consumers become more comfortable with shopping on their handsets.

There’s a downside, however, with eBay using the research to appeal to regulator Ofcom to address the shortfalls in Britain’s mobile broadband performance. Apparently, UK retailers are missing out on at least £1.3bn as a result of consumer frustrations with patchy coverage, unreliable connections and slow connection speeds driving shoppers away. So in a submission to Ofcom, eBay is calling on policy-makers to do more to address consumer frustrations when rules for the next generation of mobile networks are agreed later this year.

Indeed, some other research carried out by network measurement firm Epitiro last week found that there were significant differences between the five carriers’ performance, with O2 delivering the best performance, and Orange the worst. 3UK outperformed T-Mobile, with which it shares a 3G network.

But back to eBay, which claims that 16 per cent of the UK is an “m-commerce not-spot”, where mobile spending is at least 20 per cent below the national average. Sparsely populated areas, such as the Scottish highlands and islands, rural Wales and rural counties of England are the worst affected, as expected. But the evidence also shows that mobile shopping is underperforming in certain heavily populated areas like central London, with broadband reliability and coverage acting as a brake on the potential mobile retail market.

Angus McCarey, UK retail director for eBay UK said that mobile continues to be the fastest growing part of eBay’s business, with global mobile sales set to double again in 2011 to over $4bn. More than 16 million people use their iPhones to shop through eBay, McCarey said, highlighting the growing importance of mobile as a revenue stream for the firm.

Last week, Google unveiled its plans for NFC mobile payments via the handset. Plans allegedly formed by two ex-eBay/PayPal employees. As a result, Google was hit with a lawsuit from PayPal and parent eBay, over the misappropriation of trade secrets.

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