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Market Research Report

Direct Carrier Billing: Giving CSPs a Share of the Mobile Payments Market

Published by Analysys Mason Product code 263745
Published Content info PPT (63 slides)
Delivery time: 1-2 business days
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Direct Carrier Billing: Giving CSPs a Share of the Mobile Payments Market
Published: March 1, 2013 Content info: PPT (63 slides)

Over-the-top (OTT) services are challenging CSPs' traditional revenue, but direct carrier billing provides them with a unique opportunity to monetise the OTT market in the future.

Direct carrier billing (DCB) enables communications service providers (CSPs) to directly participate in the over-the-top market by providing a payment option for consumers directly on to their mobile phone bills. CSPs can take a margin for providing the payment service, which might grow to provide significant revenue. Analysys Mason forecasts that DCB will provide CSPs with more than USD12 billion in revenue in 2022 - a significant stake in the growing mobile payments market.

This report provides:

  • a definition of the DCB market
  • an analysis of the drivers and inhibitors of DCB
  • a 10-year forecast of CSP revenue from DCB and a 5-year forecast of vendor revenue
  • recommendations for CSPs and vendors
  • brief summaries of significant vendors
  • use cases of DCB implementations.


The following companies are mentioned in this report.

  • Aepona
  • Bango
  • BOKU
  • Facebook
  • Fortumo
  • MACH
  • Netsize
  • payvia
  • SFR
  • Skype
  • Virgin Media

About the authors

John Abraham (Analyst) is a member of Analysys Mason's Telecoms Software Research team and contributes to the Revenue Management, Service Fulfilment and Customer Care programmes. He has more than 5 years' experience in the telecoms industry. He has worked for a global OSS vendor and implemented revenue management solutions for Tier 1 telecoms operators in Europe, India and the Middle East. John joined Analysys Mason in early 2012. He holds a bachelors degree in computer science from Anna University (India) and an MBA from Bradford University School of Management (UK).

Justin van der Lande (Senior analyst) leads the Revenue Management programme (formerly Billing), which is part of Analysys Mason's Telecoms Software research stream. He specialises in business intelligence and analytics tools, the functionality of which cuts across all of the research programmes in this area. He also provides project management for large-scale projects within our Telecoms Software research. Justin has more than 20 years' experience in the communications industry in software development, marketing and research. He has held senior positions at NCR/AT&T, Micromuse (IBM), Granite Systems (Telcordia) and at the TM Forum. Justin holds a BSc in Management Science and Computer Studies from the University of Wales.

Table of Contents

Table of Contents

  • 5.Executive summary
  • 6.Executive summary [1]
  • 7.Executive summary [2]
  • 8.Recommendations
  • 9.Recommendations for CSPs [1]
  • 10.Recommendations for CSPs [2]
  • 11.Recommendations for vendors
  • 12.Market definition
  • 13.Direct carrier billing is only one of many mobile payment options but offers the best opportunity for carriers to generate mobile revenue
  • 14.Direct carrier billing provides another payment option at checkout
  • 15.Process flow between the entities involved in direct carrier billing
  • 16.DCB has to support a multi-channel delivery ecosystem that is changing rapidly driven by technology, economics and regulations
  • 17.The role of mobile payment vendors within direct carrier billing
  • 18.Business environment
  • 19.The business environment in 2013 is encouraging mobile operators to develop new value-added service revenue
  • 20.Mobile payments are set to grow as the world continues to move to mobile devices - 400 million European users will pay for mobile content in 2016
  • 21.In developed markets, including Europe, CSP revenue from voice and messaging is declining, so is their share of mobile content and apps
  • 22.The potential market for DCB addresses not only the ‘unbanked', but all users of smartphones worldwide
  • 23.Younger consumers use more apps, indicating that teenage users are a ready target for direct carrier billing
  • 24.CSPs should initially target contract customers because they are more likely to have smartphones and margins are better
  • 25.DCB has much lower drop-out rates than other payment methods, so although settlement rates are lower, overall revenue can be higher
  • 26.Direct carrier billing
  • 27.CSPs' DCB revenue will grow significantly during the next 10 years and will replace PSMS as the payment option for CSPs
  • 28.Direct carrier billing functionality is provided through managed services as well as traditional on-premises software
  • 29.Developments in the direct carrier billing market
  • 30.Regulation of the direct carrier billing market
  • 31.Trends in direct carrier billing
  • 32.Revenue splits [1]
  • 33.Revenue splits [2]
  • 34.Market drivers and inhibitors
  • 35.Direct carrier billing market drivers [1]
  • 36.Direct carrier billing market drivers [2]
  • 37.Direct carrier billing market inhibitors [1]
  • 38.Direct carrier billing market inhibitors [2]
  • 39.Use cases
  • 40.Facebook offers direct carrier billing as a payment option for its platform purchases
  • 41.Skype implements direct carrier billing to widen its market reach
  • 42.Virgin Media offers direct carrier billing as a means to pay for digital content
  • 43.SFR implements direct carrier billing as a means to generate revenue from the burgeoning mobile apps market
  • 44.Vendor snapshots
  • 45.Aepona
  • 46.Bango
  • 47.BOKU
  • 48.Fortumo
  • 49.MACH
  • 50.Netsize
  • 51.Payvia
  • 52.Vendor analysis
  • 53.Vendor analysis [1]
  • 54.Vendor analysis [2]
  • 55.Vendor analysis [3]
  • 56.Mergers and acquisitions
  • 57.Mergers and acquisitions in the direct carrier billing market
  • 58.About the authors and Analysys Mason
  • 59.About the authors
  • 60.About Analysys Mason
  • 61.Research from Analysys Mason
  • 62.Consulting from Analysys Mason

List of figures

  • Figure 1: The mobile payment ecosystem
  • Figure 2: Segmenting mobile money
  • Figure 3: The entities involved in DCB process flow
  • Figure 4: Typical DCB process flow
  • Figure 5: DCB ecosystem relationship
  • Figure 6: Types of role that vendors play within direct carrier billing
  • Figure 7: Mobile handset content and applications subscribers by region, Europe, 2011-2016
  • Figure 8: Messaging revenue by type and its share of total mobile revenue, Western Europe, 2009-2017
  • Figure 9: Frequent users' share of total mobile content and apps user base by age
  • Figure 10: Smartphone ownership by pricing model
  • Figure 11: Publisher revenue, credits cards versus direct carrier billing
  • Figure 12: CSP revenue for direct carrier billing, worldwide, 2012-2023
  • Figure 13: Vendor revenue from direct carrier billing software solutions, worldwide, 2012-2017
  • Figure 14: Revenue splits for direct carrier billing
  • Figure 15: Revenue splits for traditional payment methods
  • Figure 16a: Direct carrier billing market drivers
  • Figure 16b: Direct carrier billing market drivers
  • Figure 17a: Direct carrier billing market inhibitors
  • Figure 17b: Direct carrier billing market inhibitors
  • Figure 18: MACH's billing relationship with Skype
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