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Amazon Prime ties up with BSNL for carrier billing

BSNL subscribers can now pay for Amazon Prime memberships with their mobile bill or pre-paid balance as part of a carrier billing deal between the two companies, reports TelecomAsia. BSNL’s carrier billing deal is backed by mobile technology company Trident’s Bundling Platform. Carrier billing is a payment mechanism in which users can pay for goods and services through their prepaid phone balance or their monthly phone bill. This is important in India, where most mobile users don’t have credit cards and debit card use is low.

Fortumo’s VP for global business development Andrea Boetti said Fortumo’s technology would enable onboarding users without the need to enter a credit card number for payment.

In October 2018, Amazon tied up with Airtel, which gave a one-year Amazon Prime subscription free with many of its postpaid plans – Rs 649, Rs 799, and Rs 1199. Earlier that year, Airtel started offering the Prime with it Rs 499 postpaid plan and to V-Fiber broadband customers. Amazon’s first tie up with a telecom company in India was with Vodafone in March 2017, when it offered Prime Video to Vodafone customers using Android for Rs 249.

Netflix has, meanwhile, adopted a similar strategy and signed its third carrier billing deal in India with Hathway last year. It had existing billing deals with telecom service providers Vodafone and Airtel.

Carrier billing in India

On April 18, 2017, India’s Department of Telecommunications allowed pre-paid and post-paid mobile users to buy digital content such as apps and e-books up to a value of Rs 20,000 through carrier billing. This followed a recommendation from the Watal Committee report on digital payments, which explicitly said that direct carrier billing was not permitted under current regulations, but that the RBI, TRAI and the DoT should allow it. Though direct carrier billing had been launched in early 2016 with a deal between Idea and Google, it had subsequently been limited to postpaid consumers, which is noteworthy since 95% of India’s mobile user base is prepaid. Google later launched carrier billing for the Play Store with Airtel, with the same limitation.

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The Department of Telecom had also said that “Such purchase of digital content shall not be treated as pass-through revenue for the purpose of computing Adjusted Gross Revenue (AGR) for license fee and spectrum usage charge.” We termed this myopic and said it created a massive disincentive for carrier billing as content creators would have to pay the additional charges on their content, and much of the revenue would get lost in transmission. For example, we had calculated that after the government deducted its WPC charges, the telecom operator and the aggregator took their respective shares of the pie, the content creator would be left with Rs 17 on every Rs 100 spent on Mobile VAS services in the worst case scenario or Rs 40 on every Rs 100 spent on Mobile VAS in the best case scenario.

In addition to tying up with the likes of Amazon and Netflix, many telecom companies in India have launched their own OTT platforms for streaming video and music. These include Vodafone Play, Airtel TV and JioTV, which offer a combination of live TV, TV shows, movies and music. Telecom companies typically bundle a subscription to these own-brand platforms with their plans.

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