Report: In-app billing will reverse operator revenue decline

Operators will see their share of mobile content revenues steadily decline over the next four years, according to a new study from Informa Telecoms & Media. However, the firm believes this revenue drop will be partially offset by an increase in-app download and in-app payments charged to mobile phone bills.

The study claims that operators will see their share of revenues generated by content and m-commerce drop from 44 per cent in 2011 to 31 per cent in 2016 as OTT providers become dominant.

However, while Apple has excluded operators from its app ecosystem, Informa believes that companies such as Google, Microsoft, Nokia, RIM and Samsung need operator billing to get paid for downloads from their app stores.

"Operators could miss out on the opportunity afforded by operator billing if they don't make it more affordable and accessible to app-store owners and developers, and if they do not introduce more efficient and flexible systems than the clunky and unreliable PSMS," said Guillermo Escofet, senior analyst at Informa. "More compelling alternatives are already appearing in countries such as Russia, where instant-payment terminals in streets allow users to turn cash into e-money to spend on digital goods."

Escofet claims that the level of app revenue gained by operators will grow from 10 per cent in 2011 to 17 per cent in 2016. "Not because operators will increasingly act as a direct retail channel for apps, but because they will increasingly act as enablers of paid-app downloads on third-party stores," the analyst said.

Of note, the Informa study predicts mobile content revenues (total data revenues minus Internet access and P2P messaging) to grow from US$40.7 billion in 2011 to US$131 billion in 2016.

For more:
- see this Informa Telecoms & Media report

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