Carrier billing helps mobile operators to grab more value from online content

The value of online content (including apps) purchased and consumed on mobile devices is large and growing, yet mobile operators have found it difficult to capture this value: their attempts to be the provider of content have been unsuccessful in comparison with third-party content aggregators and app stores. But the relationship the operator has with the customer,and the simplicity for the customer of having charges for content and apps added to a mobile phone bill, have meant that mobile operators have a chance to be a more significant part of the value chain than in the past. This “direct carrier billing” has been embraced by app stores and content owners over the last year or so. A virtuous circle can be established if easy payment mechanisms accessible to all mobile phone users (rather than just credit/debit card holders) can be combined with attractive revenue shares for developers. Picture of virtuous circle For mobile operators to create and benefit from this virtuous circle, they need to address some internal and external issues. They must

  • be prepared to trade percentage of the retail value of online content and apps for volume,
  • put in place a sufficiently adaptable billing and payments platform to cope with current and future business models, and ensure the platform delivers effective and efficient billing and payments processes with all necessary functionality,
  • establish direct carrier billing relationships with as many content providers, aggregators, app stores, platforms and merchants as possible to increase the volume and value of the transactions they handle, and
  • enhance what they are able to do themselves by opening up their systems and buying in some services in order to either make their own operations more effective, and to enable the development of additional value-added services.

A white paper written by Innovation Observatory for mobile payments specialists Aepona and Bango looks in detail at these issues, examining the rapid evolution of the mobile content payments market, and the platform and partnership requirements to make a success of direct carrier billing. If you would like a copy of this paper please email jdd@innovationobservatory.com indicating your company and job title. This article is taken from Opinions, our industry newsletter. If you would like to receive Opinions, please email us at enquiries@innovationobservatory.com to sign up

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