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05/07/2012

Direct to bill to drive mobile content monetisation

Telefónica signs global agreements with Facebook, Google, Microsoft and RIM

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05 July 2012Telefónica Digital today unveiled plans to leverage the billing relationships it has with its customers globally to help drive the monetisation of mobile content. Telefónica sees the ability to pay for digital goods and services via a mobile phone bill as a key way of driving downloads of paid for content, particularly in developing markets where credit card penetration is low.

Through its Digital unit, Telefónica now has global framework agreements in place to offer direct to bill payments with Facebook, Google, Microsoft and Research In Motion (RIM). It has started to roll out the capability in Europe and plans to have it live in 14 of its operating businesses globally by year end.

Direct to bill offers a simple and convenient way for customers to purchase goods, particularly virtual goods, via their mobile phone. Whether they are buying an app, mobile game or making an in-app purchase, direct to bill enables the customer to simply charge the payment to their phone bill or prepaid credit, avoiding the need to use a credit card. Recent research from MACH found that over a third of European smartphone users have paid for applications via operator billing*.

The opportunity in Latin America is particularly significant due to the fact that 60% of the population do not have bank accounts and trials of direct to bill in Telefónica operating businesses have demonstrated its potential to drive sales.  Where the capability has started to be rolled out it is already proving popular with customers. In Germany, 400,000 customers per month on average are now making payments for a variety of products and services across different platforms using the capability.

'Few organisations can claim to have a direct billing relationship with hundreds of millions of customers globally,' said Matthew Key, Chairman & CEO of Telefónica Digital. 'The creation of Telefónica Digital has allowed us to better harness the power of this capability and use it to help drive the mobile monetisation 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.'

'Mobile payments are an important part of the business model for mobile web developers, but today the options are too complicated for users,' said Dan Rose, Vice President of Partnerships at Facebook. 'We're excited to be working with Telefonica to implement a streamlined operator billing solution that simplifies the purchase process for their consumers and expands pricing options for mobile web developers.'

'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, Vice President, Partner & Channel, Windows Phone Division, Microsoft.  '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.'

Ronjon Nag, Vice President, Storefronts & Payments, RIM, said: 'The agreement between RIM and Telefónica Digital means direct to bill purchasing can be extended to our mutual customers globally. Our data suggests that customers’ propensity to purchase apps on BlackBerry App World increases when this simple, convenient method of purchase is offered, so we’re delighted Telefónica’s BlackBerry customers can take advantage of this convenient feature. This provides for customers an easier way to pay for the content they download, and drives greater profitability for developers that create and market mobile content.'

Telefónica’s commitment to enhancing its capabilities in direct to bill payments was further underlined by a strategic investment made earlier this year in mobile payments specialist, BOKU. The investment, made through Telefónica Digital, provides access to BOKU’s merchant network, tools, and know how to provide the best possible customer experience in this area.

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Further details of Direct to Bill implementations

Facebook

Telefónica has integrated operator billing with Facebook payments, enabling a frictionless two step process for purchasing virtual or digital goods via Facebook. This capability is now live across several Telefónica markets. More information and a full list of which markets it is available in can be found here: https://developers.facebook.com/blog/post/2012/06/06/helping-monetize-the-mobile-web/

Google

The agreement with Google will see operator billing offered as a payment option through the Google Play Store, allowing customers to buy apps and other content via their bill. In addition, the agreement  allows for the creation of a dedicated ‘carrier channel’ or store-in-store within the Google Play Store per operating business. This will allow Telefónica to create a branded O2 or Movistar channel in respective local markets which will receive prominent placement. This channel can be used for the local operator’s own Android apps (i.e. O2 Priority Moments in the UK) as well as providing an opportunity to strike deals with app developers to create promotions around their apps in the branded channel, or give their apps priority placement.

Operator billing on Google Play is now live for O2 customers in Germany with Movistar Spain to launch shortly. Other operating businesses will roll out the capability in due course.

Microsoft

Operator billing agreement with Microsoft will enable direct to bill as the default payment option for Telefónica subscribers, making purchases in Windows Phone Marketplace.  Direct to bill integration with Windows Phone Marketplace will provide subscribers a seamless, integrated and one step process to complete their apps, games, and music purchases. This agreement also enables Telefónica Digital to setup their prominently placed 'Store within a Store' within Windows Phone Marketplace in local markets.

RIM

Direct to bill payments allows customers to purchase apps via the BlackBerry App World store and charge them to their phone bill. This is now available in the UK via Premium SMS and Germany through its Direct to Bill platform.

*Source: Research commissioned by MACH and carried out by Opinium in April 2000 involving 2000 consumers in UK and Germany

About Telefónica Digital

Telefónica Digital is a global business division of Telefónica. Its mission is to seize the opportunities within the digital world and deliver new growth for Telefónica through research & development, venture capital, global partnerships and digital services such as cloud computing, mobile advertising, M2M and eHealth. It is also driving innovation in over the top communications services under a new umbrella brand called Tu. Telefónica Digital will deliver these new products and services to Telefónica's 309 million customers as well as leveraging the power of the internet to enter new markets. It is headquartered in London with regional centres in Silicon Valley, Sao Paulo, Spain and Tel Aviv. Jajah, Terra, Tuenti, Media Networks Latin America, 48 and giffgaff are all managed under the Telefónica Digital umbrella.

www.telefonica.com/digital

@tefdigital

www.blog.digital.telefonica.com

For further information, please contact:

Nick Wilkins                                                       Jose Maria Hoyos Melendre

Telefónica Digital                                              Telefónica Press Office

Tel: +44 7712 020937                                     Tel: +34 91 482 87 85

Email: nick.wilkins@o2.com                            Email: josemaria.hoyosmelendre@telefonica.es

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