The relationship between operators and Android Market is getting closer. Not only is carrier billing featuring much more prominently on the application store, but so are operator storefronts.
In July we heard that Vodafone was launching its own content channel within Android Market in the UK, Germany, Italy, the Netherlands and Spain, with Greece, Ireland and Portugal following later. Then in August, Vodafone announced that it would be enabling payments on Android Market across its European footprint, starting with the UK and Germany.
Vodafone is not alone. US carriers Verizon and T-Mobile and South Korean carrier SK Telecom are all offering both payments and their own storefront on Android Market. Others are offering just payments, including the US’ AT&T Mobility and Sprint and Japan’s KDDI and Softbank, and others, such as Australia’s Telstra, just a storefront. Japanese carrier NTT DoCoMo, meanwhile, is offering payments and has its own separate Android apps store.
The open-source nature of Google’s Android ecosystem means that operators have always had a greater chance of playing a role than in Apple’s walled-garden iOS ecosystem. Operators have been able to order own-brand, custom-made Android handsets from manufacturers and launch their own Android application offerings. They either launch a separate Android apps store, parallel to Google’s Android Market, the way many Android-handset makers have done (see for example Samsung’s launch this week of its Premium Samsung Apps Store for Android in the UK). Or they launch a storefront within Android Market itself.
The latter is only possible on Android handsets distributed by operators. Usually, the way it works is that the “My Apps” tab that appears on Android Market’s user interface is replaced with the operator’s storefront tab – or “content channel” tab, to use the Android parlance.
Operators believe that their channel adds value by offering a more select set of apps, tested for quality and adapted to local needs – rather than what they would describe as the daunting and hit-and-miss choice available in the main store, which is crammed with hundreds of thousands of apps. In other words, they see themselves as offering quality over quantity.
Compared to Apple’s App Store, Android Market does relatively little to localize content according to which country the store is being accessed from. And it’s seen by many as a bit of a Wild West, with loads of underrate, malfunctioning apps and a growing piracy problem. One might argue, therefore, that there is a need for someone to step in with a more “curated” offering.
But judging by comments posted online, users are not that chuffed by the operator-branded tabs that have suddenly appeared on their screen. Many see it as patronizing and dumb of operators to narrow down choice on behalf of users – especially since operators have a terrible track record of delivering what users want on the content and apps front.
The views of these outspoken users might not be representative of the whole. There might be a silent majority of occasional app users who feel less strongly about these things and might welcome some handholding by operators. But there is no getting away from the fact that operators do tend to mess things up when they try to take ownership of what content and apps are offered to end users.
Still, you can’t blame operators for wanting to retain relevance in the content and apps market by exploiting the opportunities that the Android platform offers them to wheel out their own offerings. After all, they have seen the power of their once mighty mobile content portals rapidly dwindle over the past three years with the phenomenal takeoff of over-the-top, native-app stores.
But where the operators are likely to make the greatest difference is with billing.
August was a busy time for carrier billing announcements. Beyond Vodafone’s tie-up with Android Market, rival carrier group Telefonica’s BlueVia developer program added API access to the carrier-billing-aggregation service offered by online and in-app mobile payments provider Boku; Boku also struck direct billing deals with French operators Bouygues Telecom and SFR, in addition to its existing deal with Orange France; and rival billing aggregator, PaymentOne, established a direct billing relationship with German operator O2 Telefonica.
Earlier in the summer another carrier-billing aggregator of online and in-app payments fame, Zong, was acquired by e-commerce brand eBay to integrate with online payments platform PayPal. Yet another aggregator, Bango, signed an agreement with mobile-browser maker Opera Software to enable carrier billing on the Opera App Store. Meanwhile, US carrier Verizon teamed up with aggregator Payfone to enable its subscribers to purchase digital goods online via their mobile bill.
There is definite momentum there, and a mutual interest among carriers and iOS ecosystem competitors to keep that momentum going.
Guillermo Escofet is a Senior Analyst and a member of Informa’s Mobile Content and Applications (MCA) team
This article is originally published on Informa Telecom & Media