O2 Germany moves to adopt operator billing for apps

In an effort to simplify how consumers pay for mobile apps, O2 Germany has confirmed it will start managing the payment process for app downloads for handsets using two "major" app stores.

O2 said last month that it will start allowing customers pay for apps from Samsung's Bada OS on their operator bill rather than at the time of purchase. The company said it would also manage app payment for another smartphone OS later this year, with Google's Android platform a likely candidate.

While Samsung is thought to have done the majority of the work required to integrate its Bada store with the operator's billing system, fitting Android's Marketplace service into the O2 system might be problematic, given that Google would have little incentive to make a huge effort to help the process. Google has pledged to work more with operators on carrier billing though. The rewards could be significant; earlier this week the research firm Gartner forecast that worldwide mobile app store downloads would reach 17.7 billion in 2011, a 117 per cent increase from the estimated 8.2 billion downloads in 2010.

This activity, claimed Gartner, would generate revenues of around $15 billion (a 190 per cent increase on 2010's revenue of $5.2billion) driven by both end-users buying apps and also apps themselves generating advertising revenue for their developers.

Operators are increasingly interested in gaining a slice of these revenues having been effectively shut out of the value chain for downloads from Apple's iTunes App Store, among others. Commenting on this move to support operator billing, O2 Germany CEO, Rene Schuster, told Bloomberg: "Payments were a huge opportunity for mobile operators, and we have more projects in the pipeline."

Vodafone's CEO, Vittorio Colao, confirmed last year that the company would offer third-party billing for service providers, taking advantage of the bank details already held in Vodafone's payment system.

For more:
- see this Register article
- see this Bloomberg article
- see this PC World article

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