With Juniper Research putting the cost to mobile operators from OTT messaging in 2017 at $104 billion, the search for quick new revenue streams must surely intensify. With revenue models from IoT, 5G, VR, AI and Who Knows What still crystallizing, there is one immediate opportunity that seems to be slipping through operators’ fingers: carrier billing.
Carrier billing (a.k.a. direct operator billing) was very much in the news, and probably on Gartner’s hype cycle, a couple of years ago, Around that time, Telefonica and Telenor were making a lot of noise about their incursions into carrier billing with BlueVia, which between both operators became available to 400 million customers.
But it since seems to have gone quiet.
This is not to say the opportunity is any less. Indeed, according to a paper by SLA Digital, the reverse is true. And according to Ovum, revenues from carrier billing will reach $25.3 billion by 2020, most of it generated in the Asia-Pacific region.
The benefits of carrier billing have been presented many times. Customers are far less likely to abandon a purchase, particularly an in-app purchase such as a game, if they can buy more bullets/guns/firepower/wizardry with one click of a button. Operators can increase loyalty by providing this functionality, and app developers can increase their findability, revenue and loyalty as well.
It is easy to see why Asia should lead the carrier billing field. There is a lower penetration of credit cards than in Western Europe and North America and the games market in China (and elsewhere in the region) is staggering. Google is still quietly rolling out its offering in Google Play, and in countries such as Japan and South Korea, carrier billing accounts for 70% of Google Play purchases.
Why, then, is it not close to the top of operators’ priority lists?
Is it because they are still red in the face from Premium SMS disasters? Is it because they are too busy trying to differentiate their other digital offerings from those around them? Is it because they think that it somehow makes their revenue streams more vulnerable to erosion from the OTT players that they will need to partner with in order to bring it online? Is it because they do not see it as part of the journey towards being a digital player?
Is it, simply, because billing is boring?
Whatever the reason for the lack of noise about carrier billing at the moment, operators should look at it again, if they aren’t already. It is, without question, a win-win opportunity and a lot easier than figuring out how to make money out of connecting people’s fridges to the internet.