Telefónica Digital signs deals on direct carrier billing, financial services

July 5, 2012

Launched last October, Telefónica Digital is the R&D and investment unit of Spanish telecommunications company Telefónica. It was created to bring new services to Telefónica's 309 million worldwide subscribers and move the company beyond simply providing connectivity services.

As a part of its strategy, Telefónica Digital made several announcements today, the most important being agreements with Facebook, Google, Microsoft and Research In Motion to offer direct carrier billing services. 

Direct carrier billing offers consumers the ability to place purchases on their monthly phone bills. It is particularly useful for digital goods like gaming or social media, which are popular with younger consumers who may lack access to bank and credit accounts. Additionally, in some markets where access to banks is limited, direct carrier billing allows underbanked consumers to participate in online commerce.

Telefónica Digital said it has already started to roll out direct carrier billing capabilities in Europe. The plan is to have the capabilities live in 14 of its operating businesses globally by year's end, the company said. Telefónica Digital said that where it has rolled out direct carrier billing capabilities, the payment method has proven popular. In Germany alone, an average of 400,000 customers per month have made payments using direct carrier billing.

"Few organizations can claim to have a direct billing relationship with hundreds of millions of customers globally," said Telefónica Digital Chairman and CEO Matthew Key. "The creation of Telefónica Digital has allowed us to better harness the power of this capability and use it to help drive the mobile monetization strategies of some of the world’s largest technology companies. We believe that direct-to-bill will become an increasingly significant part of the overall mobile commerce market."

The agreements with Google, Microsoft and RIM allow Telefónica subscribers using Android, Microsoft Phone and Blackberry devices to place mobile app purchases on their monthly phone bills. In the case of Google apps, Telefónica brands like O2 and Movistar will also be able to create their own branded pages within Google's app store, Google Play. With Microsoft, direct carrier billing through Telefónica will now be listed as the default payment method for purchasing apps. 

"Enabling direct-to-bill with Telefónica Digital is yet another important step to continue growing our more than 100,000 apps in the Windows Phone Marketplace," said Tony Mestres, VP of partner and channel for Microsoft's Windows Phone division. "Direct-to-bill for Windows Phone makes it convenient for Telefónica subscribers to make digital purchases on their Windows Phones and also helps grow our app developer ecosystem with increased monetization."

The Facebook agreement means Telefónica Digital has integrated its operator billing services with Facebook payments, giving its subscribers a quick, two-step process for purchasing digital goods through Facebook.

"Mobile payments are an important part of the business model for mobile web developers, but today the options are too complicated for users," Dan Rose, Facebook VP of partnerships, said in the announcement. He said Facebook is excited to work with Telefónica to provide a streamlined operator billing solution.

Along with direct carrer billing, Telefónica Digital also announced an important new partnership with wireless carrer Etisalat. Etisalat operates in 17 countries, mostly in the Middle East and Africa. Along with developing cloud computing and mobile advertising solutions, Telefónica Digital and Etisalat said they will partner on mobile financial services for Etisalat's 170 million subscribers.

"Like us, Etisalat recognises the enormous potential of digital services for our sector," Key said. "We strongly believe that open collaboration and partnership is the best way of driving innovation and delivering the best products and services to customers across our combined footprints."

For more stories like this, visit the carriers/card schemes research center.


Topics: Carriers / Operators , Direct Carrier Billing , Mobile Banking , Trends / Statistics

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