Carriers in North America have been handed a major opportunity on a plate. Perhaps more accurately, they have served themselves the opportunity. From mid-January, AT&T, Sprint and T-Mobile will stop supporting premium SMS.
On the face of it, this is excellent news for all proponents of DOB.
Research just out, courtesy of Bango (the people behind DOB) and Yankee, discovered that 35 million US consumers made a premium SMS purchase in the last month. Now, presumably, the carriers will try an convert them to DOB. It is certainly more intuitive, has a better customer experience and is generally a slicker solution. But that is still a lot of people to convince.
Telefonica Digital has proved the point about DOB. With revenues from purchases up and conversions also up considerably, there is no doubt that this is one of the three opportunities that carriers need to address to compensate for the loss of ARPU from consumers (pegged at over 38 percent since 2007 in the US). They need to get it right.
The example of Telefonica Digital is certainly a success story, although news is scarce lately. Any operator/carrier can plug into their platform, as Telenor has done. DOB is now available to over 400 million customers and products such as Firefox Marketplace is being launched in Latin America – with DOB ‘baked in.’
The early conclusion should be that three of the serious carriers in the US have seen the opportunity and want it for themselves. And they almost certainly will have it….unless those who have not announced they are scrapping premium SMS have other plans, which might result in payments becoming the real battleground for capturing customers. We shall see.