European telecom major Telefonica S.A. (NYSE:TEF) announced today that it has entered into “global framework agreements” with four technology heavyweights: Google Inc (NASDAQ:GOOG), Microsoft Corporation (NASDAQ:MSFT), Facebook Inc (NASDAQ:FB) and Research In Motion Limited (USA) (NASDAQ:RIMM). Under the agreement, Telefónica users around the world can purchase digital items and subscribe to services using their mobile phone from all the four companies. The payments Will be deducted from the customer’s phone bill or prepaid credit.
The partnership would benefit customers who do not use a credit card. With the agreement in place, Telefónica sees great potential in developing countries where about 60% of the population do not even have bank accounts. Mobile billing would allow people in these countries to purchase digital goods and services without ever having to open a bank account.
All the four companies have enabled operator billing services to their customers. RIM and Facebook have partnerships with Bango to provide mobile billing technologies. Google will offer operator billing options through Google Play Store, and Microsoft will do the same with its Windows Phone Marketplace. Telefónica S.A. plans to roll out direct-to-billing in Europe, and further expand it in 14 regions globally.
“Few organisations can claim to have a direct billing relationship with hundreds of millions of customers globally,” said Matthew Key, Chairman & CEO of Telefónica Digital. “The creation of Telefónica Digital has allowed us to better harness the power of this capability and use it to help drive the mobile monetisation strategies of some of the world’s largest technology companies. We believe that direct to bill will become an increasingly significant part of the overall mobile commerce market.”
In order to strengthen its position in direct-to-bill payments, Telefónica made a strategic investment earlier this year in mobile payment specialist, BOKU. Telefónica’s O2 division already offers operator billing on Google Play in Germany.