Canadian firm in talks for arrangement with telcos

BlackBerry-maker Research in Motion (RIM) is in talks with Indian telecom operators (telcos) to introduce ‘carrier billing’ model for app purchases.


The ‘carrier billing’ model is one where the user is charged by the telco directly for purchase of an application/ download from the app store. The consumer need not use a credit card. Instead, the amount is added to his monthly mobile phone bill or deducted from the pre-paid balance.

According to Sunil Dutt, Managing Director, RIM, the company is already in talks with all telcos and an announcement in this regard is likely to be made by the year-end.

“We are in discussions with telcos and you might see us introduce a carrier billing model for app purchases by the end of this year. There are some regulatory issues on the telecom operators’ part that has to be resolved first,” Dutt told Business Line after inaugurating the ‘BlackBerry Premium’ retail store in the city on Thursday.

With low credit card penetration in India – 0.02 credit card per person compared to the 1.25 per cent in the Asia Pacific region (Datamonitor, February 2012); introduction of a carrier billing model will help increase downloads from the ‘BlackBerry App World”. “Downloads are expected to go up substantially through the carrier billing model,” he added. BlackBerry has over one lakh apps on its ‘App World’ and nearly 3 billion global downloads.

According to an independent telecom analyst Kunal Bajaj, considering the poor penetration of credit cards and reluctance to give out details, it makes more sense to partner telcos that have a greater reach.

Other OEMs

Faisal Kawoosa, lead telecom analyst at CyberMedia Research, maintains that the challenge lies in ensuring that people use paid apps rather than opting for free content. “I think payment mode is not a matter here. One has to see how many people are willing to go for an actual app purchases,” he added.

While BlackBerry has gone ahead with the carrier-billing model in other emerging markets such as Indonesia, handset major Nokia, by partnering Reliance, was the first one to introduce the concept in India last year for its Nokia store downloads.

Nokia entered into similar tie-ups with Vodafone and Airtel. It maintains that paid downloads (on Nokia Store) have gone up by over 25 times since all three operators started offering integrated billing services.

(This article was published on October 18, 2012)
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