Granted the App Store created an exciting (and single) marketplace for developers to create, test and sell apps to consumers. But the model also totally disintermediated operators from app revenues.
Since then mobile operators have sought to reassert themselves in the value chain by offering their own app stores, a me-too strategy borrowed from Apple that has so far failed to pay dividends for a variety of reasons.
But there is one strategy mobile operators would do well to copy down to the letter. (And it isn’t the Apple model!) Instead, operators should borrow a page from eBay, a commerce giant who made the grade by extending an API that allows others to sign up merchants on its platform. The result is a robust business ecosystem with eBay at the center of the action.
Connect the dots, and mobile operators have a lot to gain by opening up their billing capabilities to third-parties (an approach known in the industry as ‘billing on behalf of’ or BOBO).
Some mobile operators recognize the advantages of this approach, but they are not alone in understanding where the real money is.
Mobile payments start-ups and aggregators (such BilltoMobile, a direct carrier billing company with roots in Korea) also sense a business opportunity. BilltoMobile, for example, has direct billing arrangements with Verizon and AT&T — and just added Sprint to the list last week.
Are mobile operators correct in working with aggregators (effectively adding more mouths to feed in a value chain that is already in a huge state of flux?) Would it be better for mobile operators to open up their APIs and asset themselves in the value chain as the true billing experts?
I argue the later. My message to mobile operators: Don’t be a passive payment option. Cut out the middlemen and be the mobile payments platform for all.
Read the rest of my post over at the Amdocs Interactive blog.
Disclaimer: Amdocs Interactive is an MSG client and supporter.