BASINGSTOKE, England--(BUSINESS WIRE)--A new study from Juniper Research has found that carrier billing, which allows users to make purchases by charging payments to their phone bill, will generate $9 billion annually for mobile operators by 2022. A threefold increase on 2017’s figure of $2.9 billion.
According to the new research, Direct Carrier Billing: Forecasts, Player Strategies & Emerging Opportunities 2018-2022, growth is increasingly being driven by bundled content such as Spotify (across Europe) and Netflix (in markets including the Philippines and Mexico). The research argued that by using carrier billing for acquisition, OTT content providers can reduce marketing costs by leveraging the brand name of local mobile operators.
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Opportunities & Challenges
The research highlighted the new opportunities for carrier billing in sectors such as ticketing and physical goods purchases, citing the recent deployment by Amazon in Japan as a potential game-changer. However, it also stressed that for operators to compete effectively with card payments and players such as PayPal, they would need to accept a lower revenue share, reducing their cut from 15% or more to the single digit range.
The research also argued that operators needed to be more proactive in promoting carrier billing, but were currently being hampered by limited resource from their marketing departments, which were overwhelmingly focused on smartphones and package differentiation.
Juniper additionally claimed that even where carrier billing was in place, usage was often constrained by low spending limits designed to limit exposure to fraudulent purchases, an issue that could be addressed by implementing improved reporting platforms.
Carrier Billing ‘The Most Significant Underdeveloped Revenue Stream’
Indeed, Juniper argued that carrier billing was the most significant underdeveloped revenue stream for operators. According to research author Dr Windsor Holden, ‘The customer billing relationship is one of the mobile operator’s greatest assets, but consumers are often unaware they can use their phone bill to pay for a wide range of goods and services.’
Juniper Research is acknowledged as the leading analyst house in the digital commerce and fintech sector, delivering pioneering research into payments, banking and financial services for over a decade.