Telenor harnesses Android carrier billing in 11 markets

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Telenor harnesses Android carrier billing in 11 markets

Operator partners with Google to create a store within a store in Android Market, with enhanced ease of use

By CAROLINE GABRIEL

Published: 16 November, 2011

READ MORE: Telenor | Billing | App Store | Android

Operators have become adept at exploiting Android's open nature to turn it to their advantage, and increasingly Google sees the advantages of this as rivals like Amazon vye for the top spot in the Android ecosystem. The latest example comes from Telenor, which has worked with the search giant to create its own 'store within a store' in Android Market, sporting carrier billing across 11 countries and ease of use.

The initiative, which mirrors similar moves by T-Mobile and others, allows the operator to promote its brand and differentiate itself to the customer, but without investing in its own app store. This strengthens Android Market, by keeping cellcos from going it alone as Verizon Wireless and others have done.

The Telenor agreement covers all the Norwegian cellco's markets, with an initial launch in the first quarter next year in Thailand, Malaysia, Hungary, Sweden and Denmark. Its home market plus India, Bangladesh, Serbia and Montenegro will follow later in 2012.

The carrier aims to improve on the quality assurance and ease of discovery of the vanilla Android Market by setting up an editorial team in each country, responsible for selecting and presenting up to 50 apps with high local relevance.

And carrier billing has been demonstrated to be a significant driver of app store purchasing as well as giving the operator a key role in the apps value chain. Telenor quoted industry data which indicated that, given a choice of paying by credit card or the operator bill, 70% prefer the latter since it is quicker and simpler, and does not involve trusting payment card details to the network.

Analysts at Ovum say there has been a rapid rise in billing partnerships between mobile operators and handset or platform vendors since the start of the year. It cites examples such as RIM with Vodafone, Microsoft with Orange, Nokia with Reliance (and many others), and Google with AT&T.

Some cellcos, like Verizon and China Mobile, have set up their own Android app stores with links to their billing systems, but in August Vodafone blazed the trail for the cooperative approach when it announced it was looking to bring its facilities to the Android Market itself, enhancing its place in the mobile apps process. It claims to be the first cellco in Europe to offer carrier billing for the Google-run Market and initiated the service in the UK and Germany, with all its territories to follow.

The analysts said: "Telco billing can also make the current holy grails of one-click and in-application charging much more convenient for the consumer. However, third party app stores will find that telco billing comes at a substantially higher cost than the 2%-3% charges levied by credit card issuers, even if few details of the revenue sharing arrangements have been publicly disclosed so far." Ovum believes the figure is 15% to 25% in emerging economies, where carrier billing is most important because of the low penetration of credit cards, and around 10% in mature economies.

That may affect apps developers - Ovum has found some agreements where the usual 70:30 revenue split between developer and store will apply only after the telco has taken their fee. However, the greater volumes driven by carrier billing should still ensure software houses see a net benefit from the trend.