Research Notes

Mobile broadband – one click to buy, two clicks; bye bye

A new business model can turn the sales of Internet services upside down.

Through the years there have been many attempts at creating a micro payment model on the Internet and PayPal is probably the closest you will get to a global solution that is being widely used. On the other hand PayPal is a model that has the same limitations as using credit- and banking cards – you need to actively take action to gain access to the payment solution.

Almost 10 years ago, a number of mobile operators launched a business model based on premium SMS and WAP billing. That model, which is called the CPA model (Content Provider Access), has developed into a global success, annually selling digital content to mobile phones worth billions of Euro.

There is no doubt that the mobile premium services market for mobile telephones is a huge success in almost all countries. The business model that is the foundation of this market is a business model that partly uses the operators’ billing systems, while at the same time enabling content providers to market services across different mobile operators’ networks.

The advantages of this model from the mobile phone market, which is used when customers e.g. purchase ring tones and Java games, is that all mobile customers can use it without needing any special registration and that it helps reduce the marketing costs for those marketing and selling services. The fact that this model has helped reduce the operators’ costs for distributing services to their customers, is simply an extra bonus.

With the growth of mobile broadband, a new business opportunity is opening for both operators and service providers. In the report Show me the money – The future Business models for mobile Broadband Services Strand Consult has described and analysed this new BCAP business model (Broadband, Content, Application Provider) which will most probably dominate the services market on the future mobile broadband market.

We already know for a fact that a number of mobile operators are already implementing IP billing and the BCAP model, allowing their mobile broadband customers in the future to simply click on a service or a webpage to acquire and pay for a given service. Simply put it will be one click to buy, two clicks bye bye.

In the report we have reached the conclusion that there will be a premium value added services market on the mobile broadband market and that this market can easily become larger than the current 32 billion USD services market for mobile phones.

We believe that the premium services market will spread from mobile phones to PCs with mobile broadband connections and over to the traditional broadband market. Operators doing business on this market can use their billing systems to create a solution that will function on all customers’ broadband connections and across different operators networks, thereby both benefiting all the market players – and especially the customers.
In practice it will become far easier to acquire and pay for online digital services, services like news, extra storage space, applications, games and entertainment like movies and music. The sky is the limit for what this type of micro payment can be used for.

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More information: Show me the money – The future Business models for mobile Broadband Services

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