Despite industry concerns that operators aren’t making as much money from OTT digital services as they could be, carrier billing arrangements for digital and physical goods remain a significant growth area for telcos, according to new figures from Juniper Research.
According to a new Juniper report on carrier billing, the value of end-user spend on digital goods via direct carrier billing will reach an estimated $54 billion globally in 2022, and will grow 37% to over $74 billion by 2026.
In terms of operator revenues, that translates to $8 billion in operator-billed carrier billing revenue attributable to digital goods in 2022, growing to $11 billion by 2026.
That growth reflects the increasing relevance of carrier billing as an option for digital commerce spend, the report says. While high costs per transaction remain a limiting factor for carrier billing payments versus card and digital wallet payments, operators still have the key advantage of reach and direct customer relationships.
“In the face of a rapidly accelerating digital transformation within payments, operators can be in the driver’s seat for reaching potential users, given their access to existing subscribers,” said research co-author Nick Maynard. “Leveraging this subscription base is critical to accessing this potential revenue source.”
The report adds that gaming spend will account for a little over half of digital goods spend via carrier billing in 2026, which will be driven by accelerating monetisation strategies, including 5G cloud gaming and gaming subscription models. This is why Juniper recommends carrier billing vendors prioritise partnerships with leading gaming platforms, including emerging cloud gaming players, in order to best serve the market.
Meanwhile, there’s also money to be made from physical goods – more, in fact, as physical goods spend is rising much faster in carrier billing than for digital goods at a rate of 270% over the next four years.
Juniper notes that while the physical goods market is growing from a lower user base, it still represents a significant new opportunity for operators, with spend set to exceed $13 billion globally in 2026. The report recommends targeting cross-border e-commerce vendors for partnerships, given their need to quickly onboard localised payment methods.
More info on the report here.
A white paper is also available here.