OPINION: MACH on the beauty of operator billing

Charles Damen of MACH explains how it can sell more apps, improve UI and put operators at the heart of the app revolution.

App store billing specialist MACH is a sponsor of next week's Monetising Mobile conference. Here, it explains the power of operator billing within the sector...

The mass market uptake of smartphones and the simultaneous tablet explosion have defined the industry over the past 18 months.

Recent figures from Gartner revealed that global smartphone sales will reach 468m units in 2011, while Forrester expects over 24m tablets will be shipped this year.

It's mostly down to apps and their extraordinary impact, with Gartner recently estimating that global mobile app store revenues will triple from $5.2 billion in 2010 to $15 billion this year and reach $58 billion by 2014.  

With such vast potential, commentators could be forgiven for thinking that Application Service Providers (ASPs) need only develop compelling products and wait for the money to roll in.

In reality, it not this simple.

They've been restricted by the reliance on credit card-based systems that exclude millions of consumers, and are generally overly-complex for those who can use them. They also give rise to inevitable fears of identity theft.

Finally, the rigid pricing structure of premium SMS has prevented the opportunity for more competitive pricing flexibility which could stimulate user uptake and developers’ revenue streams.

There needs to be a sea change. And operators need to ensure their role extends beyond purely serving as a bit pipe for third-party content.  

Direct operator billing is quickly emerging as the optimum approach to overcome these challenges.

It enables apps and other services to be paid in real-time via a ‘one-click’ buy process, regardless of whether the consumer has a pre- or post-paid contract or credit card.  

The signs are that this ease of use encourages apps consumption. According to Nokia, one-click billing leads to 13 times more payments being made than over credit cards.  

Furthermore, direct operator billing also plugs revenue leakage, with authentication and authorisation conducted in real-time.

Pricing flexibility can definitely help developers’ bottom line. Since app sales dictate visibility on a store, the ability to differentiate prices can move apps up the popularity ratings, helping them to drive even more sales.

This points towards a more sophisticated apps ecosystem not previously seen, further changing the way we pay for mobile content.

It is also important for such flexibility to extend to the connectivity method used when buying apps.  

Smartphone users tend to consume more data and for cost reasons, they tend to use wi-fi more often – especially at home.

This is a problem for some platforms, although MACH’s Direct Billing Gateway service can manage operator billing on 3G and wi-fi.

Since our research shows that more than 30 per cent of transactions come from WiFi, you can see how critical this connectivity flexibility is.

Operator billing represents a mobile billing revolution. This is why direct operator billing solutions such as MACH’s Direct Billing Gateway that support real-time, one-click billing for apps and in-app purchases are so important. And that goes for short term app sales, and long-term evolution of the space.

Our solution is also cross-platform (for Android, Windows, Symbian and Java-based phones), so the ability for app developers to monetise apps is maximised.  

Direct operator billing unites operators and ASPs by connecting their businesses, while at the same time allowing end-users to download apps with ease.

It simplifies the process, optimises the end-user experience, drives revenue for ASPs and keeps operators in a competitive position within the value chain.

* Charles Damen is the head of MACH’s Mobile Content & Application business