Telefonica is today announcing a deal with Samsung that will see it make an even bigger move into the area of carrier billing. Samsung will integrate the carrier’s billing backend directly into its own mobile services, meaning that the Telefonica customers (it has 316 million worldwide) who use the Samsung Hub and Samsung Apps portals on Samsung smartphones will be able to buy apps, music, videos, books, games and more and charge them directly to their phone bills.
The agreement, which will use Telefonica’s BlueVia payment APIs, is a significant one for Telefonica. So far it has inked deals with app portal operators, including Google, Facebook, Microsoft and RIM, and with billing providers like Bango; this effectively closes the loop for it by securing a deal with the world’s largest handset maker, although a recent deal to help the carrier finance the procurement and distribution of BlackBerry devices could point to Telefonica gearing up for a similar deal with that handset maker, too.
In addition to Bango, Telefonica also works with BOKU, where it led a $35 million investment last year. It’s not clear how this deal with Samsung will play out between these two rival billing providers. In the past Telefonica has been vague on the subject, saying that it will work one or the other depending on the situation.
Telefonica has been especially bullish on trying to come up with a way to get a piece of the action on apps and other content that is getting purchased on smartphones and tablets. Apple’s early move into the area with its very popular App Store (just this week marking its 50-billionth download) set a precedent for all but cutting carriers out of the picture, with Apple handling the payment on its own platform and then dividing up resulting revenues with the app publishers.
Mobile advertising alongside often-free apps is one other area where carriers and others have tried to play, although these revenues are still small in relation to those collected from downloads and in-app purchases.
But the promise of carrier billing, as we have noted before, is that it not only offers carriers a look in to the growing pot of money being made from smartphone content, but it also provides a route for publishers to better target consumers in parts of the world where smartphone usage is growing rapidly, but payment card penetration is not so much.
The carrier framework can be used not only for consumers who take monthly plans, but also for prepaid accounts, with each purchase deducted from there, as already happens with phone minutes, data bytes and SMS messages. This is an area where Spain’s Telefonica, which has more users in emerging markets in Latin America than it does in any single market in Europe, can hope to gain a foothold with its carrier billing offering, even if it has (so far) missed the boat in more developed markets.
Nevertheless, this deal will be implemented in phases, starting first with a rollout with Telefonica’s subsidiary in Germany “in the coming months.”
“We strongly believe that carrier billing has the potential to drive the monetisation of digital content,” Wayne Thorsen, vice president of Global Partnerships at Telefónica Digital, said in a statement. “Partnerships like this allow us to harness the power of the billing relationships we have with our customers to make it easier for them to consume content on their tablets and mobile devices.”
For Samsung, meanwhile, it gives the company the ability to promote its own content portals as easy to use — one way of driving more users there instead of to Google’s services. As Samsung tries to further differentiate itself from the other OEMs using Android, and Google itself, little things like this could help it along the way.
“Samsung is committed to ensuring that our customers have choice and convenience when purchasing content on our devices,” Lee Epting, VP of Media Solutions Centre Europe for Samsung Electronics Europe, said in a statement. “Our partnership with Telefónica Digital allows us to deliver yet another easy and convenient purchasing experience to our Samsung Hub and Samsung Apps customers.”
Telefonica and Samsung are not strangers to each other in the area of new services; they have co-invested in the latest round for semantic, real-time search startup Expect Labs.