On-bill App Store Purchases – finally, an operator leveraging their own infrastructure in new ways, on the new era of app stores

Operators have so much infrastructure already in place and it has taken them so many years to take advantage of it in news ways — to leverage such infrastructure for their own benefit and the benefit of the ecosystem, by repackaging and offering this infrastructure as “open” Services: their payment system, their marketing/reach methods, their customer support systems and other…

Recently T-Mobile announced (PC World) that they will start support for on-bill Android App Market purchases; up to this point the only way to buy applications on the Google App Market has been via Google Checkout.

“T-Mobile will let its subscribers pay for Android applications on their monthly mobile bills starting Nov. 17, also introducing its own section of the Android Marketplace that day.”

These news though, I’m surprised, haven’t made much noise within the developer community yet. This announcement is VERY interesting and important. A number of us, including William Volk (Extremepreneur blog) have been advocating this as an important approach to help simplify the app store application purchase (and/or purchase decision) and as a way to better ‘compete’ with Apple who already have a robust, established, recognized and independent (from operators) billing/payment framework.

For developers, this on-bill purchase/payment support means (in theory) that because the process of buying apps is becoming simpler for subscribers (no registration required, one-click buy) the resistance to buy applications should be less than before, and thus we should see an increase on the number of apps being purchased on Android and thus the Android platform should be more attractive to target since again, in theory, the ROI for it should also increase as a result of the introduced app purchase simplicity.

“Brodman characterized T-Mobile’s billing system as a simple, “one-click” purchase method that doesn’t require the user to give credit-card information or personal credentials. So far, Android users generally have had to use Google Checkout to pay for applications, but Google has said it wants a variety of payment choices for the market.”

Is the fact that there hasn’t been much (positive or negative) reaction to this announcement an indication that on-bill purchases don’t matter? Perhaps it is an indication that this is just a no-brainer and was just expected. Time will tell.

T-Mobile has taken the first step into this combined billing approach to app stores. This will set a precedence that will not favor Apple. Little by little and over the years, slowly but surely, operators have been understanding (or forced to understand) and have been learning and adapting. This is the only way operators will regain their position and be recognized within the ecosystem in ways that allows then to compete with companies such as Apple and Google — by themselves becoming part of the ecosystem in positive ways. It will take them years still, but they are learning. We have seen the mobile/wireless industry transforming from 1) being operator-centered, 2) to recently becoming ecosystem-centered where the developer community and users and open systems are at the center and where the operator is not viewed as a positive contributor or partner. But if operators adapt well (and time is of essence for them) we will see 3) an ecosystem where the operator becomes a very important ecosystem partner, which is anyways what they always have wanted, to offer services and be recognized beyond a pure pipe.

Apple has iTunes, Google has Checkout and the Operators have a proven robust billing/payment infrastructure (and other infrastructure) already in place for years that now they can extend to app stores. Let’s see if they will take advantage of this new opportunity and let’s see how this will play out.

In conclusion, T-Mobile’s on-bill support will be a great experiment that will help determine if this converged or combined billing/payment approach will be a positive influence on people’s decision to buy mobile applications. Logic dictates that it should…

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