Feature Article

June 27, 2012

Will Carrier Billing 'Save' Mobile Operator App Revenues?

Mobile service provider content and commerce revenue is going to drop between now and 2016 with service provider share of mobile content and commerce revenue dropping from 44 percent in 2011 to 31 percent in 2016 globally, according to Informa Telecoms & Media. 

That represents a growing share of market that will be taken by over the top providers of mobile music, mobile games, mobile TV or mobile video, mobile messaging, location-based services and chat and social-networking over the next five years, as these services go increasingly “over the top.” 

And no, to anticipate the answer to the question, carrier billing used for in-app or app purchases will not be a substitute revenue stream for mobile service providers. But the fall in market share would be more precipitous if it wasn’t for the growing role that operators will play in mobile app payments, Informa Telecoms & Media believes. 

Carrier billing used to support app-download and in-app payments will allow operators to claim an increasing share of payment revenues over the coming years and the slice of app revenues going to operators will grow from 10 percent in 2011 to 17 percent in 2016,  “not because operators will increasingly act as a direct retail channel for apps, but because they will increasingly act as enablers of paid-app downloads on third-party stores,” says Escofet.

Some might argue that for this forecast to prove correct, mobile service providers will have to make some changes. Up to this point, carrier billing charges have been excessive, in comparison to other alternative methods such as billing to a credit card. Oothers might tend to agree that the process of using carrier billing, from a third party retailer’s point of view could use some work. 

But the Informa analysis assumes major app stores except for Apple iTunes will continue to rely on service provider support of their native app stores on mobile devices. If that were to change, the forecast might have to be revised.

Want to learn more about today’s powerful mobile Internet ecosystem? Then be sure to attend the Mobility Tech Conference & Expo, collocated with ITEXPO West 2012 taking place Oct. 2-5 2012, in Austin, TX. Co-sponsored by TMC Partner Crossfire Media the Mobility Tech Conference & Expo provides unmatched networking opportunities and a robust conference program representing the mobile ecosystem. The conference not only brings together the best and brightest in the wireless industry, it actually spans the communications and technology industry. For more information on registering for the Mobility Tech Conference & Expo click here.

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Edited by Jamie Epstein

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