Carrier billing in Central & Eastern Europe: market report by Fortumo

Carrier billing in Central & Eastern Europe: market report by Fortumo

This market report gives an overview of the mobile landscape in the largest countries of Central & Eastern Europe (CEE): Russia, Ukraine, Poland, Romania, Czech Republic, Hungary, Azerbaijan, Belarus, Bulgaria and Serbia.

CEE has an advanced digital economy with smartphone ownership being above 60%. Major merchants including Google, Apple, Facebook, Netflix and Riot Games have teamed up with mobile operators in order to use carrier billing and telco promotional channels for growth.

Carrier billing and telco bundling is popular in the region as traditional payment and marketing channels do not work well. For example, less than 25% of people across the region have access to credit cards for online payments.

This makes carrier billing an excellent alternative for revenue growth in CEE, also illustrated by the fact that it has become the 2nd most popular payment method for digital gaming here. Carrier billing accounts for 21% of all gaming transactions, while bank cards hold an 18% market share and e-Wallets stand at 35%.

Our CEE market report aims to help merchants understand the users of the region better: how they go online, how much they are willing to spend and how to localize pricing and marketing in order to grow their presence in the region.

To download the report, enter your contact details below.

What are the benefits of SMS-based customer communication in emerging markets?

What are the benefits of SMS-based customer communication in emerging markets?

As the digital audience shifts to emerging markets, merchants need to localize their acquisition channels and payment strategy. But at the core of successful expansion is users understanding the value of the service provided and making sure their onboarding is smooth. For that, the way to communicate with users needs to be adapted as well.

There are two key statistics that change the way customer communication should be done in emerging markets:

  • Large number of mobile-only users: In Indonesia 67% of people exclusively use their smartphone to access the internet compared to the US where the number is just at 12%
  • Lack of access to mobile data: In Indonesia 36% of people have mobile broadband access while in Germany 70% of people can use smartphones to access the internet

This means the user journey needs to be built up in a way where their only engagement with the service will likely be through a small smartphone screen (meaning simplicity in flows) on which they are unlikely to have access to the internet.

With SMS messaging, these challenges can be mitigated in several steps of the user journey. Below, we give a quick overview of why an SMS-based approach to customer communication outperforms other channels in emerging markets.

User sign-up

Traditionally, user accounts are based on email. For emerging markets, the alternative option is to use customers' phone numbers instead as their identifier. The benefits of this approach are:

  • It’s easier to enter a phone number, there are less chance of typos and confirmation of the sign-up can be done instantly through SMS (users do not need to check their inbox)
  • Phone numbers can often be detected automatically from the device or SIM card, which means better conversion as there are less form fields to fill out
  • Phone numbers can later be reused for payments done through carrier billing where the number can be prefilled automatically
  • More privacy for users as phone numbers are more anonymous, especially in emerging markets where a majority of the mobile subscriber base uses prepaid SIM cards

2-factor authentication

To keep user accounts secure, many digital merchants use 2-factor authentication to verify users when they log in or take certain actions on their account. Authenticator apps such as those created by Google are often used for this purpose. However, SMS messaging outperforms such an approach for two reasons:

  • Authenticator apps require the user to take additional steps for verification (installing and opening the app) while SMS-based authentication does not require the user to leave the application
  • SMS-based authentication is agnostic: accessible and usable in all cases, regardless of the platform or operating system in use; with many people in emerging markets still owning feature phones, authenticator apps may even not be available for them

Payment receipts and notifications

With cards and digital wallets, the standard approach to sharing payment receipts is to do it over email and share notifications in the checkout window itself. In case of using carrier billing, such notifications are viewed as mandatory by mobile operators, but instead they are delivered through SMS.

The good thing is, payment-related SMS notifications are usually free of charge with carrier billing and there is better alignment between the payment method and the delivery medium. In addition to the mandatory receipt notifications, SMS works better in cases where there are issues with payments (e.g. failed subscription renewal), because users receive a notification immediately, even if they are offline or not checking their email account.

Marketing and upselling

Notifying customers of promotional offers, new content and discounts is traditionally done by digital merchants through emailing and social media campaigns. SMS messaging can be used to complement the other channels and in several cases has notable advantages:

  • Users are more likely to read SMS than emails; according to Dynmark, the industry average SMS read rate is 98% compared to email which sits between 15% and 25%
  • With SMS, there is no Spam folder; for email campaigns, your offering might not even end up being visible to the user
  • Delay in communication through SMS can be significantly lower compared to email and the ability to gather instant feedback, as well as inclusion of URL-s make it an attractive solution for time-sensitive promotions

In order to provide a better user experience, a growing amount of digital merchants are adapting SMS for user accounts, authentication, payment notifications and marketing. In case you wish to bring your customer communication to the next level in emerging markets, make sure to check out Fortumo’s Messaging Platform!

February in the mobile industry: banana phones are back!

February in the mobile industry: banana phones are back!

February and the world’s largest mobile ecosystem event MWC are behind us. Check out a recap of what was announced at the event and if you’re feeling nostalgic, here’s what Nokia’s new “banana phone” looks like.

For more news from the industry, read our recap of the month below.

General mobile



Digital content


Mobifone case study: how does Google Play carrier billing impact telco revenue?

Carrier billing for mobile commerce: Kinguin & Orange Poland case study

When telcos sell their own services - calls, data and messaging - they get to keep all of the revenue. With carrier billing, a majority of the revenue is passed on to 3rd party service providers.

For example, app stores using carrier billing need to pay developers between 70% to 85% of the order value, which means telcos can keep only up to 30% of the revenue. This can create fears that launching app store carrier billing will lead to revenue cannibalization.

The concern arises because of the assumption that the amount of money subscribers are willing to spend through telco channels remains the same while some of the spend shifts to services where the revenue share is smaller.

In our latest case study with the leading Vietnamese telco Mobifone, we find that this is not the case. Download the case study and find out how launching carrier billing for Google Play increased Mobifone's ARPU by 130%!

Fortumo launches Trident: an open bundling platform for co-marketing

Fortumo launches Trident: an open bundling platform for co-marketing

Fortumo has been providing its bundling platform Trident to digital merchants and telcos to co-market their services for more than a year now. Today, we are opening up Trident for any digital merchants to collaborate with each other. Now, companies can take advantage of the platform’s capabilities in user authentication, service provisioning, payment collection and churn prevention.

Co-marketing is growing in popularity among companies targeting the same audience with complementing products. The world’s biggest brands are using the approach for user base growth and retention, notable examples being Nike-Apple and Spotify-Hulu partnerships. By opening up Trident, companies get access to a standardized solution for launching these deals and getting better results out of their co-marketing efforts.

Trident gives merchants the following capabilities:

  • User authentication: identifying users that are eligible for co-marketing campaigns, for example the requirement to be an existing customer of the partner company
  • Service provisioning: activation and deactivation of user access to the services
  • Campaign management: allowing companies to set up campaigns for user base growth, such as free trial access and discounted pricing
  • Payment collection: customer billing through their telco or broadband provider invoice
  • Customer communication: transactional and promotional A2P SMS management
  • Retention management: complex set of tools to re-engage users who are at risk of churning out or have already churned out
  • Analytics: real-time reporting on co-marketing performance, giving merchants the understanding of which partners and promotional mechanisms perform the best

Co-marketing through bundling has become widely popular in the telco industry during the past few years, with mobile operators partnering up with video and music streaming service providers. We believe the success of these partnerships can be replicated in other industries as well.

Service providers team up with telcos because they have a loyal user base and the capability to reach those users through their marketing channels. When any digital service is expanding globally, such growth partners are extremely valuable. But it doesn’t just have to be telcos.

For example, a video streaming service entering a new market can team up with the largest local daily newspaper and promote its content to their readers. A business magazine can provide more value to their audience by offering access to office software.

It’s these kinds of partnerships that we’re aiming to make easy to launch through Trident. As reflected in the name, the platform helps merchants in three important customer lifecycle areas: user acquisition, monetization and retention.

Merchants interested in receiving access to Trident can sign up for the beta on our homepage.

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