by Innovation Observatory (sponsored by Aepona and Bango) | October 2011
The market for digital content delivered to SIM-enabled devices is very large and growing fast, driven by a combination of factors that has resulted in a compelling consumer offer and the extension of existing online commercial models to the mobile market. We estimate the market for mobile content will reach up to USD100bn by 2015.
Though content, including apps, is delivered via mobile networks, much of the value currently passes through a number of third parties and the mobile operator is largely cut out of the value chain.
However, mobile operators now have an opportunity to claim a significant role in the value chain, and earn revenues from the billing and payments processes for mobile and online content. The convenience of direct carrier billing – where the price of the content is added to the mobile bill through a “frictionless” buying process for the user – and the establishment of payment mechanisms that are simple to implement for app developers, content creators and app stores, mean operators are set to play a more central role in creating a “virtuous circle” driving the online content market.
To maximise their opportunity, operators should be aware of the features and functionality needed of their internal platforms: this doesn’t mean replacing existing billing systems, but rather addressing the requirements of the front-end platforms that put the charge on to the bill. They must also understand the benefits that flow from opening up their systems to third parties, bringing relevant partners into their ecosystem.
If they get these two aspects of mobile billing and payment right, they position themselves to earn revenue from the continuing growth in the online content market, both for content designed for consumption on a mobile device, and with other types of digital content too.
