U.S. device manufacturer Apple has started to roll out carrier billing for iTunes, starting with Telefonica Germany (O2), according to a report. This service will allow users to pay for iTunes purchases by charging them to their mobile phone bills. O2 confirmed that payment via the operator’s phone bills was available for Apple Music, iTunes, App Store and iBooks Store purchases and would be rolled out to all customers in Germany—both postpaid and prepaid—by the beginning of November.
Due to its aggressive moves in the telecom space—such as, most recently, making unlocked iPhones available on installment plans directly to consumers without any need for operator involvement—Apple has come to be seen by many MNOs as a threat. The carrier billing deal with O2 cuts in the other direction. By making it possible for the operator’s subscribers to pay for the immensely popular products sold through Apple’s various services through their phone bills, Apple is allowing the operator to benefit. Direct carrier billing can boost customer loyalty and help retention, as well as driving data consumption. If the O2 deal is indeed the first of many such arrangements, Apple will enter the carrier billing sphere worldwide, coming line with Google’s strategy for Android devices. Especially in emerging economies, unlike that of Germany, carrier billing can make a major impact, since many users in such markets do not have bank accounts or credit cards with which to pay for apps and other such purchases.