DCB Market potential in post-COVID world
DOCOMO Digital chief executive officer (CEO) Jonathan Kriegel is forecasting a bright future for carrier billing as more Coronavirus impacted consumers around the world switch on to the benefits of purchasing digital content, tickets and in-store goods using their mobile phones.
Here he talks to Mobile World Live managing editor Justin Springham about how telcos and mobile network operators (MNOs) can partner with managed services providers to make it easier for the merchants involved.
Springham: DOCOMO Digital works with more than 200 carriers, 300 merchants globally, what are the big macro trends you are seeing in the market?
Kriegel: What we are observing is that carriers all over the world, like our parent company NTT DOCOMO in Japan, are looking for ways to find revenue growth as they see their traditional voice, SMS and data business slowing down. As they move into digital services – all sorts of lifestyle services like streaming, gaming etc – they are looking for ways to make it safer and simpler for their customers to purchase those digital goods.
Carrier billing is a key to enabling the digital services ecosystem. So we see those carriers that are most successful – it could be large telcos like Bouygyes Telecom in France, or smaller start-ups like U Mobile in Malaysia – those carriers which take a very proactive stance to marketing those services to consumers at key moments like maybe when they buy a new terminal, change tariff plans or look at opportunities to proactively engage with customers, we are seeing those carriers be successful in growing their digital services businesses.
Springham: DOCOMO Digital is well placed to tell us what’s keeping carriers up at night – what are the big challenges and opportunities for operators at the moment?
Kriegel: Operators that want to get involved in carrier billing think about things like fraud and bad debt, for any payment method but certainly for carrier billing. They think about the challenges of onboarding multiple merchants. Traditionally VAS services were all local merchants in a particular country and those merchants would write to the operator’s application programming interface (API).
Now we have got situations where operators want to engage with a global over the top (OTT) merchant and that is just adding complexity to their lives. Working with a managed services provider allows the operator to focus on what they do best which is engaging with their customer and good local marketing, and it allows the managed services provider to take care of fast onboarding to bring anti-fraud and bad debt solutions as part of the package. It allows the operator to focus on growing that digital service experience for their customers.
Springham: DOCOMO Digital also works with merchants as well as carriers, and is one of the largest integrators for Google Play – what has your experience been with app store volumes and app store behaviour in the wake of the COVID-19 pandemic?
Kriegel: We have seen transaction volumes grow by up to 30-35% year on year in recent months as consumers are sheltering in place and accessing more streaming videos, audio content, games etc, and doing it and paying online for it through carrier billing.We have seen that not just here at DOCOMO Digital but also across the industry. We believe that behaviour will in fact persist after the pandemic. This isn’t just a temporary spike – we believe that some substantial proportion of this will be a persistent change in behaviour going forward.
Springham: What needs to change for direct carrier billing to live up to its potential?
Kriegel: It is a combination of things. We need to think of carrier billing as a part of a broader ecosystem connecting merchants, network operators and consumers. When we think about that ecosystem today it is primarily driven by online goods. In the future, and again looking to Japan and South Korea’s example, we would like to see an expansion into ticketing for transportation and events as well as physical goods – online purchases and in-store.
We have seen in-store purchase using QR codes with carrier billing as the payment method in Japan and we’d like to see that happen in other places. For that to happen we need carriers to work together with all the integrators in the industry to convince regulators to make it happen, but together we see a really bright future for carrier billing.