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Would you Buy a Car that Comes with 2 years Supply of Fuel? How about an iPhone with an iData Plan?

MEDICICEO

Six months after Google’s wireless service, Project Fi, made the news and we opined on it from a payments and commerce perspective, there are now similar reports about Apple considering an MVNO (mobile virtual network operator, where an entity that is not a mobile operator offers a mobile service without owning the mobile network). In fact, it was never a secret that Apple has been wanting to do this with relevant patents filed as early as 2006. What’s different this time? For one, we might actually be close to an announcement. What’s also different is that Apple has already made a commitment to payments and commerce, which seems to be the last frontier for mobile! (I still remember, back in the 90’s, when we would call wireless the last frontier of telecommunications.)

Of course, the details are still sketchy. Business Insider does not quote any official sources in its story. However, as one mobile operator veteran put it when I mentioned this story, “The writing has been on the wall...not sure if there’s much we can do!” We will limit our observations on the general mobile industry implications of this so we can focus on the commerce and payments aspects, but it’s worth at least looking at a potential Apple iData and iVoice plan through a consumer’s eyes. I say it makes perfect sense! Why wouldn’t I want to consolidate my mobile experience into one relationship? That too with Apple? Every stakeholder group except the mobile operators will publicly welcome this move. That it’s not easy to actually pull it off, even for Apple, is a different story. How many MVNOs can you name right now? Quick! That’s exactly my point. It’s a tough & expensive business building and running a mobile network and it’s not going to get easier or cheaper just because Apple wants to put its brand on it!

However, selfishly, for the sake of our wishful thinking in payments and commerce, let’s pretend that Apple actually succeeds at an MVNO. What should we expect from such an endeavor? Here’s my Top 5:

1. Allow iPhone users to send or receive quantums of voice or data with a tap on the screen or an NFC tap of the phone. Is this the first step towards a #cashless society? This new $BWC (Bandwidth Currency) could give even $BTC (Bitcoin) a run for its money! Apple may not even need to get money transfer licenses for such a system.

2. Perhaps #1 is too revolutionary. May be simply turn carrier billing on its head: sell apps with pre-allocated data budgets. If you exceed the data budget of an app, then you have to buy it again or utilize in-app data purchases.

3. May be #2 will run into net neutrality considerations. So, how about making all apps free and eliminating unlimited data plans? What will that do to Apple’s iData ARPU, especially if Apple were able to buy an unlimited wholesale plan from the carriers?

4. OK, that could be too harsh on app developers. Perhaps Apple can simply give away data and voice with Apple devices to accelerate its land grab (share of market), in return of course for consumers’ data and the ability to turn every iPhone into an iBeacon that accelerates and incentivizes location-specific shopping and commerce activity.

5. Finally, may be Apple is experimenting with this MVNO thing only to launch another type of MVNO, where the networks are not mobile operators, but payment networks. Does Apple have enough leverage with the big banks and the 4 payments networks to buy payment network capacity in bulk, and offer acceptance services to merchants for a flat monthly fee, called iChange (rather than Interchange)? May be every iPhone or iPad becomes an mPOS, and Apple Pay gets a whole new meaning!

If Apple ends up doing any of the above things in an MVNO play, you can be sure to read about it right here on LTP!

Aditya Khurjekar

MEDICICEO

Aditya Khurjekar is CEO and founder at MEDICI (formerly LTP, Let’s Talk Payments), the trusted source for global FinTech insights and ecosystem engagement.

Previously, Aditya was a founder of Money20/20, and on the the founding team at Softcard, the mobile commerce joint venture between AT&T, T-Mobile & Verizon. Aditya also held a number of leadership positions at Verizon Wireless, CSG Systems, Lucent Technologies and Bell Laboratories.

Aditya holds an MBA in Finance & Management from New York University and an MS in Electrical Engineering. He lives in Charlotte, NC and works with teams all over the world.