mopay-logoOperator billing solutions provider Mopay has  launched operations in India with an HTML5 in-app billing solution. The company says that the direct carrier billing platform will be available “on all large Indian carriers” and that it will “support up to 75% of connections” in India. However, it has not mentioned the names of the operators.

Backed by European Venture Capitalists such as T-Venture Mobile, DFJ Esprit and Holtzbrinck Ventures, Mopay supports carriers from 80 countries. It had added Indian carriers (pdf) back in 2010, but it hadn’t revealed the name of the operators or the payout percentages. According to a forum post from 2012, Mopay supported Indian carriers such as BSNL, Airtel, BPL and Uninor. There is a chance that Mopay has worked on fresh contracts with operators before launching operations in India.

Other players: Boku had entered India by acquiring Qubecell, and Estonia based mobile payment provider Fortumo had setup its Indian office in New Delhi last year. Then there is NeoMobile which too partnered with telecom operators in the country for carrier billing in 2013.

Among these companies, Fortumo supports Airtel, Vodafone and Idea; Boku supports payments from Airtel, Vodafone, Idea, Tata Docomo, Loop Mobile, MTNL and Uninor and Ver se’s iPayy says it support five operators, without taking names. This industry has been getting very interesting off late, with severalserviceproviders and OEMs enabling carrier billing options.

Biggest issues with operator billing in India

There is no doubt that operator billing has a huge scope in India, but the way it is implemented here is a recipe for failure.

High commission/fee: From what we have heard, telcos haven’t fully recovered from the VAS mindset and still charge a ridiculously high commission/fee for operator billing. Among operators in India, Fortumo is the only one that has disclosed the payout percentages offered to merchants and it is not going to make anyone happy.

fortumo_revenue_share

For every Rupee earned, a merchant stands to make 40-45 paisa, which is much lower than the 70-30 split that has become the de facto standard thanks to mobile app stores. Microsoft has been pretty vocal about this issue and Vineet Durani, Director, Windows Phone had earlier told Medianama that it wants revenue split to be done with telcos in such a way that the developers will not be affected at all. Microsoft had proposed that the telcos give 70% to the developers and take their cut from the remaining 30%, but there doesn’t seem to be many takers for that.

Ver se meanwhile, had told Medianama that in their system operators take around 30%, while iPayy will get around 5% and the remaining goes to the merchant.

Lack of transparency: It’s not clear why the operators charge such a high fee since they are not even expected to promote these apps like in the VAS era. In an interview with us, Vserv’s Dippak Khurana had told us that carrier billing integration in ads is used by a lot of mobile-only players, since their apps are no longer promoted by the carriers. We don’t know why these operators continue to charge such a high percentage despite this shift.

Airtel and Vodafone have supposedly reduced their rates a bit, but there is still no transparency in the whole system. Some companies have managed to bag good deals while others are still vary to enable operator billing due to the uncertainty. Why can’t telcos put up a standard rate on their website? Can they at least publicly justify why they charge such a high commission?