Telcos battle of the banks

According to Booz-Allen & Hamilton, banks are becoming increasingly threatened by the telcos and must adopt the time honoured approach of 'if you can't beat them, join them'.

In a study entitled Why Banks and Telecoms Must Merge to Surge, the analysts point out that telcos have already developed settlement systems.

Telcos can carry out many transactions cheaper than the financial experts and can even use their billing systems as a basis for running a full range of bank accounts.

Therefore, the market analysts advise that financial institutions start working with their new rivals in order to survive. However, the relationship would also prove beneficial for the telcos who would be able to offset the huge costs of 3G licences through alliances with large financial institutions.

However, Holger Kern, a consultant from the Monitor Group, warns that the banks may yet take the fight to the telcos and advises that banks should get involved in m-commerce during the founding days of technology in good time to adapt their business models to the new technological opportunities.

By Irene Binal, journalist, www.silicon.de