Michael De Jongh, Global Head of Sales, Mobile Billing & Payments at MACH, presented the opportunities available for mobile operators and OTT players to unite and harmonize the mobile ecosystem through direct carrier billing, at Apps World NA, San Francisco, 7-8 February 2013.
Listen to Michael De Jongh Presentation at Apps World North America 2013! (On following page, click first orange button on the left side)
The current mobile landscape has changed significantly over the last few years. In what was once a space predominantly held by mobile operators, the telecoms environment has been infiltrated by Over The Top (OTT) service providers, social media giants, and device manufacturers that are having a direct impact on the mobile industry’s profitability. As part of this dynamic, we are seeing a gradual mobile apps revolution as operators begin to realise the need to evolve their business models.
Mobile operators are in a unique position to ally themselves with OTT providers to ensure gains on both sides. After all, it is the operator that generally provides the handset, the mobile number and has the relationship with the end-user. Operators own the network infrastructure and the billing and customer relationship. Operators are the ones that tailor, deliver and drive the quality of experience that meets consumer’s needs. While OTT services grow in popularity they are still reliant on a broadband connection, which is owned by the operator. As fragmented, closed user communities (a WhatsApp user can only send a message to another WhatsApp user), OTT providers will also struggle to compete for mindshare and look for ways to monetize their service offering.
Users typically engage with OTT services via apps on their devices, often installed via an application store. By providing a seamless billing approach to these purchases, operators can raise their exposure to consumers, and strengthen their brand and relevance in the eyes of their subscribers. Today, there are ample opportunities for operators to work with OTT providers in areas outside of their core competence. Billing is an obvious example. As OTT providers look to enhance their own billing relationships with their users, operators have a chance to form billing partnerships to enable consumers to pay for OTT services via their mobile phone bills. It’s the obvious route to monetizing without the need to enter countless pieces of information to ensure a smooth transaction experience. Direct Operator Billing (DOB) is the simplest and most effective ‘glue’ to unite the different players in this way, and offers unity, from device, network and infrastructure, billing and customer support through to intuitive services, that consumers are demanding from these leading OTT players.
OTT players are hindered by the lack of a solution to effectively monetize their services across all platforms. They are now exploring how DOB could represent a big chance for them to turn this problem around. Internet giants such as Skype have already tackled the issue by upselling premium services to consumers that allow them to perform a number of great additional services over and above the core VoIP service. Skype is also using DOB as a choice to pay for Skype credits, providing users with a seamless experience and creating new revenue streams from both acquisition of new paying consumers and upsell to existing customers. In a survey conducted last year, 38% of consumers would rather utilise DOB as a payment option over other traditional methods, for reasons ranging from perceived risk of exposing credit card details online to convenience through a frictionless checkout option.