Telefonica today has announced a deal with Telenor as its first carrier partner to the BlueVia API platform — one of the Spanish company’s many efforts, via Telefonica Digital, to create new lines of revenue around its operator assets. In this case, it’s a platform that it opens up to developers to incorporate different carrier-based actions into their mobile apps, such as messaging and billing services, which they can in turn offer to Telefonica’s 311 million customers. (Think Twilio but run by a carrier.)
The Telenor deal will see the Norwegian telco — which has operations not only in the Nordics but in three other countries in Europe, five in Asia and a 48 percent share of Russia’s Vimplecom — share in the platform but contribute its own APIs and give its developers access to Telefonica’s APIs to use in apps for Telenor customers. The first APIs that the two will share cover carrier billing, which now can be offered to 460 million users worldwide.
It’s a sign of how telcos are trying, and trying again, to work together to squeeze more revenues out of their ageing telecoms assets in the face of falling revenues in voice and data. So far the track record hasn’t been great. “Don’t call this WAC!” Matthew Dicks, the new head of marketing for BlueVia, said with a little alarm when describing the service to me. WAC, for background, is the ill-fated Wholesale Applications Consortium operator alliance that got whacked in July when its operations were folded into the GSMA and its API assets got bought by Apigee.
Telefonica is now, perhaps, thinking that taking matters into its own hands and approaching the partnership concept with slow steps might be a better route to getting it to work. Dicks says that after Telenor, Telefonica expects to announce a few more carriers to the platform. It’s likely that they will be more along the lines of Telenor in terms of size and market cap rather than other big boys like Vodafone or AT&T.
And looking at BlueVia precedents, it’s likely that direct carrier billing will be the first feature to be rolled out with future carriers: other partners that Telefonica has added to BlueVia include Facebook, Google, Microsoft and RIM, which have all signed a framework agreement with Telefonica so that BlueVia developers can also incorporate Telefonica’s direct carrier billing into apps for those platforms.
But carrier billing won’t be the only thing BlueVia will be rolling into the partnership. “From the beginning, BlueVia’s aim has been to gather scale and experiment fast on API business, not sticking to Telefónica’s footprint but opening our vision to a pure global ecosystem,” said Jose Valles, Head of BlueVia, in a statement. “Telenor is leading the industry embracing this vision. We are glad to work with them, initially in mobile payments, but also exploring other innovative APIs.”
Why direct carrier billing first? Because carriers believe that this is one of their strongest weapons against the growing power of companies like Apple. Direct carrier billing means that users who, say, buy an app or make an in-app purchase put the charge for the service directly on to their phone bills, rather than route it through other platforms like iTunes.
That not only gives operators a potential cut of revenues, and a basis for further relationships with consumers (such as around data usage and using that data for other business ventures), but it also potentially spells better business. Research from carrier billing specialist Bango, which works with Facebook, Amazon and RIM for carrier billing services, has found that conversion rates on apps with direct carrier billing incorporated into them are around 77 percent compared to 40 percent that use other billing mechanisms.
But with all the fragmentation in the mobile world across carriers, apps, app stores and devices partnerships like the ones Telefonica is trying to build are important to get the right economy of scale into these services to make them worthwhile for developers to use.
So far Telefonica has provided little in the way of global stats about how well its BlueVia platform is being used, although it does note that in Germany it has already rolled out its direct-to-bill payments service, linking up all of the Facebook/Google/Microsoft/RIM partnerships, and there are now 400,000 people per month using those services.
Technologies used by BlueVia include RESTful APIs and OAuth.