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Why India’s Carrier Billing Platform Market Is Heating Up

India has seen a series of recent developments in the carrier billing space, especially related to platforms that aggregate mobile carriers and allow publishers from both the mobile Internet and mobile applications space, the ability to enable payments via telecom operators (carriers):

Earlier today, carrier billing and cross-platform mobile payments company Boku acquired Qubecell, and Estonia based mobile payment provider Fortumo, setup its first Indian office in New Delhi. This year alone, three companies — Fortumo, Ver Se and NeoMobile — partnered with telecom operators in the country for carrier billing. In March, Hungama.com had tied up with all telecom operators for billing when it launched a music and video streaming mobile app that also let listeners purchase tracks. Earlier this month, music streaming platform Dhingana signed a carrier billing deal with Idea Cellular to let its users download unlimited tracks from the service for free and without subscribing to a data plan.  Some services such as Times Internet’s BoxTV signed up with Fortumo for operator billing last month.

1. Carriers want it: The wind has gone out of the Mobile VAS sails in India, and that is clearly a segment on the decline. The number of activations declined by 60% between June and July 2013, and with the focus now shifting to the Mobile Internet, it’s likely that they will continue to remain low.

onmobile-q1-fy14

Carriers need to make money, and are now more open to integrating their billing with merchants through third party aggregators. Earlier, merchants had to integrate with carriers directly, which was never an easy task, given the bureaucratic nature of their functioning.

2. Mobile Internet companies want it: The growth in mobile Internet in India (increasing at between 12-15 million per quarter) means that more and more merchants and app developers have the opportunity to monetize a growing user base. Some data:

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– Mobile Internet Subscriber additions: Airtel added 4.047 M, Vodafone 1.3 M, RCOM added 2.9 M and Idea Cellular added 2.7 M.
– Total Mobile Internet connections: Airtel has 50.63 M, Vodafone has 42.5 M, RCOM has 31.1 M, Idea has 33.6 M.
– Data usage went up 23% QoQ for Airtel, 20.2% for Vodafone, 21.6% for RCOM,
– Data usage per data customer was up to 230.64 MB per data connections, up 8% from 202.89 last quarter.

With more Internet companies looking at going mobile, more companies will be looking at monetizing this base. Monetization will come via mobile advertising or payments. Mobile payments will be through carrier billing, credit cards, debit cards and prepaid payment cards. Qubecell, Fortumo and Neomobile address one part of that opportunity.

3. Consumers don’t have other options: India’s credit card base is mostly stagnant or declining: As of August 2013, India had 18.46 million credit cards, down from 24.8 million in January 2009.

cards-in-india

As you can probably tell from the data above, while the debit card base is massive, it still has substantially lower transaction amounts per card, than credit cards.

On mobile, though, every one of India’s has 738.86 million active connections (as of September 2013), can be billed. That’s a bigger addressable base than all the cards in the country, limited only by the number of mobile Internet users.

Timeline

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– May 2010: Ibibo Integrates Telco Billing For Micro-transactions In “Great Indian Parking Wars”

– Mar 2011: Tanla Launches Mobile Payments Service TPAYmobile.com; Airtel, Voda, Idea, MTNL

– May 2011: InMobi Launches Mobile Payments Service; Our Take

– Jul 2012: Vserv Adds Paywall To Mobile Apps With AppWrapper; Deals With Vodafone, Nazara, Indiagames, Jump Games

– Mar 2013: Hungama Launches Music & Video Streaming App

– Apr 2013: Qubecell Raises Seed Round From Kae Capital, Blume Ventures & More

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– Sep 2013: Fortumo Launches 4 Indian Telcos To Launch Direct Carrier Billing; Telco Rev Share Ratio

– Sep 2013: Ver Se Launches Carrier Billing Platform iPayy

– Oct 2013: BoxTV Ties Up With Fortumo For Telco Billing

– Nov 2013: Dhingana Brings Carrier Billing To Android With Idea Tie-Up

– Nov 2013: Neomobile Ties Up With Vodafone And Airtel For Operator Billing

– Nov 2013: Boku announced the acquisition of Qubecell

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Written By

Founder @ MediaNama. TED Fellow. Asia21 Fellow @ Asia Society. Co-founder SaveTheInternet.in and Internet Freedom Foundation. Advisory board @ CyberBRICS

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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