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Germany presents massive carrier billing opportunity, says study

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The German direct carrier billing market is set for staggering growth and offers enormous potential, suggests the latest country focus from B2B carrier billing company DIMOCO.

As one of the biggest economies in Europe and with a mobile handset penetration of 119.9% – in comparison to 35.7% credit card ownership – Germany shows a huge potential in billing digital content via direct carrier billing.

According to the white paper on direct carrier billing in Europe, published by DIMOCO in collaboration with market research partner Juniper Research, conversion rates up to 70% at the first transaction and 60% at the second transaction can be achieved with direct carrier billing.

The countries 115.2 million mobile subscribers are shared among the four big German mobile network operators Telefonica Germany (O2 Brand, market share 16.6%), E-Plus Group (market share 21.9%), Telekom Germany (33.7% market share) and Vodafone (market share 27.8%). As the worldwide trend shows, the smartphone penetration rate is also increasing in Germany and is currently at 33.9% compared to 66.1% legacy handsets available on the market.

The wider content market is also increasingly ripe for the picking too, suggests another study. The Price Waterhouse Coopers “Entertainment and Media Outlook 2014 – 2018” report shows real development in the digital content industry: The ePublishing segment, the area with the biggest growth, will grow from $655 million in 2012 to $2,287 million revenue in 2017.

The home video market is set to grow from $162 million revenue in 2012 to $674 million in 2017, and the eMusic market from $387 million in 2012 to $620 million revenue in 2017.

Another huge market is the eGames segment. The revenue growth rate shows a development from $889 million in 2012 to $1,589 million in 2017.

And this is where the opportunity lies. To tap into this enormous digital content potential, carrier billing is starting to offer a really viable alternative to other payment tools. It is quick and convenient and starting to see consumer interest.

“Direct carrier billing is an additional payment method to credit card billing and gives digital content providers the chance to maximize revenues and to reach their entire target group”, says Gerald Tauchner, DIMOCO CEO, adding: “The sales potential in big economies like Germany is tremendous, as this study by Price Waterhouse Coopers confirms”.

Starting next year, O2 users in Germany will be able to use carrier billing to pay for goods on Amazon following a deal between the retailer, Telefonica Deutschland and UK billing company Bango.

The news comes a month after Bango announced that it was set to power a range of carrier billing based payment services for Deutsche Telekom across a range of apps stores and content services on mobile.

The move marks a sudden shift in the balance of power in European m-commerce, with Germany taking an unexpected lead in proceedings and showcasing the power of carrier billing for driving impulse purchases of not just digital, but physical goods too.

Bango signed a deal with Deutsche Telekom in August for the use of carrier billing in Apps Stores. The partnership enables Deutsche Telekom to accelerate DOB deployment, bringing frictionless ‘one click’ payment for apps, music, games and other digital content, to its subscribers across Germany and other European markets.

DIMOCO offers companies a variety of mobile payment products. Depending on the business customers’ needs and the mobile network operators’ capabilities, digital content on the web can easily be billed as one-off or subscription service between a tariff range of 0.19 and 30 EUR at Vodafone, Telekom, E-Plus, O2 plus the virtual mobile network operator Mobilcom Debitel.

“As DIMOCO we provide the technical hub between all the mobile network operators on the one hand and the business customers on the other hand. The main advantage for digital content providers is that they only need to integrate one connection and technical interface into their infrastructure”, explains Tauchner.

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