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Straight Talk Media & Entertainment

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Apple has started enabling consumers in Germany to charge purchases from its App Store, Apple Music, iBooks, and iTunes services to their mobile phone bills. This should boost the profile of the concept of “carrier billing” – which, although the most tangible means for carriers to secure a stake in the mobile apps market, has been poorly promoted by them.

The sleeping giant finally stirs

Apple has been the sleeping giant of the carrier billing world. While all other app store owners had to a greater or lesser extent embraced carrier billing as a way of boosting app revenue, Apple had until now remained aloof.

Some carrier billing activity had taken place on the edges of the iOS ecosystem – to enable the purchase of iTunes vouchers in Japan and the UK, and direct App Store/iTunes purchases via virtual credit cards in the Philippines – but these moves were independent of Apple itself. Unlike most of its app store rivals, Apple has a direct billing relationship with most of its device users.

Now the giant has finally stirred. News leaked out yesterday that German carrier O2, part of the Telefonica Group, has begun enabling carrier billing on Apple devices. It will be available to all O2 Germany subscribers, both postpaid and prepaid, by the beginning of November.

It will be interesting to see how Apple goes about rolling out carrier billing across its footprint.

My guess is that, rather than dumping all of the integration work on the carriers the way Google has, Apple will take care of it itself to ensure consistent quality. Neither Apple nor O2 have disclosed which carrier billing specialist, if any, is doing the back-end work.

My guess also is that, like Microsoft, Apple is likely to want to enable carrier billing across all of its devices – mobile and non-mobile. Google has not.

Ovum believes that the global carrier billing market will be worth $25.3bn by 2020, with app stores taking the lion’s share.

Straight Talk is a weekly briefing from the desk of the Chief Research Officer. To receive this newsletter by email, please contact us.

Appendix

Further reading

Carrier Billing: Where the Market is at and Where it is Headed, ME0002-000590 (July 2015)

Carrier Billing: Forecast Analysis, by Segment and Region, ME0002-000595 (August 2015)

Author

Guillermo Escofet, Principal Analyst, Digital Media

guillermo.escofet@ovum.com

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