Are Operators Heading For A Showdown? Mobile App Tweetchat Asks Matt Anderson & Ajit Jaokar
The avalanche in apps and app stores doesn’t just mean more choice for consumers and more opportunity for developers. It also ushers in a new App Economy with new players and new rules. What is the impact of the Amazon app store? What is the role of the mobile operator? What revenue share operators realistically expect? And finally – with mobile commerce poised to be THE next big thing– are operators heading for a showdown with banks and credit card companies?
These are a few of the questions I explore in a podcast interview with Matt Anderson, an active blogger and outspoken commentator on the industry, who also heads up product marketing at Amdocs Interactive. Tomorrow (April 6, 5 pm CET/ 11 am EST ) Matt and Ajit Jaokar, author, speaker and mobile app authority, join me in a Tweetchat (#doxchat) to debate how the App Economy might play out and the impact on all the players.
Mobile payments
Matt is back from a “world tour,” a trip during which he had the opportunity to speak with mobile operators and learn how they see the market and the challenges. He reports that mobile operators are increasingly aware of the larger opportunities in mobile payment, but they aren’t the only ones.
“You’re also seeing the emergence of these mobile payment companies like BOKU and Zong that are billing on behalf of basically any merchant, any merchant out there – it could be an online merchant, anyone….So, there’s a lot of money to be made out there on buying virtual goods, and consumers prefer to direct bill or put purchases on their mobile bill. If operators don’t seize the opportunity, the profits are going to go to other people.”
Real transactions
Based on the close to 7 billion transactions that have gone through Amdocs systems since 2004, Matt can confirm the steady move to off-portal (off-deck). “What I’m seeing is: if you look at on-portal versus off-portal in terms of revenues, off-portal is growing a little bit faster than on-portal. This is primarily in the North American market where most of our billing customers are.” Why the shift to off-portal? One key driver is the success of off-portal merchants with a subscription model.
Moreover, smartphones are driving more off-portal traffic. In the U.S. it’s roughly “a little bit more 50/50 with the trend toward off-portal.” Latin America, Matt adds, is more like “60 percent off-portal.”
Direct billing
Currently, North American carriers are “more advanced” when it comes to understanding (and advancing) a direct billing strategy. Europe is also a similar story. Latin America is seeing more action, with off-portal on the rise.
Asia is diverse. In India, where mobile operators have been able to take a whopping 60 percent of revenues, the market is out of balance. “I think worldwide operators get the opportunity, I’m not sure if they get the urgency of getting into the business and asserting themselves more aggressively [in direct billing]. But they’re also going to have to pull back and share more with customers.”
Matt suggests that mobile operators will have to accept that their share of the revenue will fall. However, even 20 percent (what Amazon is charging, for example) is still a sizeable piece of the revenue pie. “The market’s huge, it’s a $327 billion market, so there’s lots of money to be made and if [operators] can get their 20 percent or whatever, that’s a significant revenue stream.”
Last Call: #doxchat Tweetchat
Come join Matt Anderson and Ajit Jaokar, author, speaker and mobile app authority, for our tweetchat on the Mobile App Economy. Participating is easy. You just follow the hashtag #doxchat – and include it in your tweets.
WHEN: Wednesday 6 April, 11am EST / 4pm GMT
Everyone is invited and I hope to see you there!
Podcast interview with Matt Anderson
Listen to the podcast here [14:40].
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Disclaimer: Amdocs Interactive is an MSG client and supporter.
