Light Reading

Telefónica + Samsung: Digital Dream Team?

Ray Le Maistre

I've been at Management World 2013 in Nice, France, this week, where the industry, realizing that voice and mobile text messaging will not sustain the sector for much longer, was trying to figure out how to generate new revenues in a digital world. As the event closed down and more than 3,000 people wondered whether they would get through customs without having to declare the Microsoft Corp. Surface RT tablet they'd picked up gratis at the show, Telefónica SA and Samsung Electronics Co. Ltd. reminded everyone that there's still hope for the telcos. (See MW13: QUICK – FREE STUFF!!) That hope springs from the strategic development and deployment of Service Provider Information Technology (SPIT) capabilities and is based around a combination of the new -- the development of APIs that hook up telecom operator assets to third-party partners -- and the old, the carrier billing system. In a nutshell, Samsung has agreed to integrate the BlueVia payments applications developed by Telefónica Digital in its smartphones and tablets. The BlueVia API (application programming interface) creates a link between the devices and Telefónica's billing system, enabling Samsung device users to add the cost of buying mobile apps and services to their mobile bills, without the need to enter any credit card details or hook up manually to an external payment platform. (And if it all works OK, then Telefónica gets a cut of the transaction along with increased customer satisfaction.) That's a relationship known as "direct carrier billing." It's not new and we've already highlighted the potential of developing such relationships. (See How Telcos Can Deal With OTT and Telefónica, Telenor Team on APIs.) But direct carrier billing is gaining momentum and this new relationship marks a significant step in the adoption of such relationships because it brings together one of the world's largest telecom operators, with about 250 million mobile customers in Europe and Latin America, and the world's biggest mobile device manufacturer. (See Smartphones Outpace Feature Phones, Samsung Leads.) Now, this isn't going to change the market overnight. Samsung has to integrate the BlueVia API and Telefónica needs to update its billing platform: The direct carrier billing capability will be launched first in Germany "in the coming months." But in time I expect this will make a difference to Telefónica, not only in generating additional revenues but also in attracting other key partners and in holding on to its most valuable mobile customers. I'll be very surprised if this relationship isn't getting a name-check in Telefónica's quarterly earnings reports in 2014. — Ray Le Maistre, Editor-in-Chief, Light Reading

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User Rank: Light Beer
5/17/2013 | 5:00:46 PM
re: Telefónica + Samsung: Digital Dream Team?
Maybe the telco's have been making far too much money for far too long, and maybe Karma really does exist. It's only natural for any company to identify new value add opportunities for those loyal subscribers (what some would call customers). Besides being nothing new, this may be more of a lifeline for telco than real value for customer. If the Internet is to genuinely become a human right, then maybe it's time for a complete rethink...
User Rank: Blogger
5/17/2013 | 2:22:14 PM
re: Telefónica + Samsung: Digital Dream Team?
Carrier billing is the one carrier API that just makes sense to me. It's upside for the operators and something consumers would welcome. I was surprised to hear Skype's Neil Ward say that it wasn't even able to work out carrier billing with the operators, instead working through an aggregator (although hasn't said to reach which operators). That's a little different since it's an OTT that's directly competitive, but still seems like a no-brainer since it's going to ride their networks either way.
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