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Pay to play: the killer mobile app

But sort out micro-payments first

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Network gaming provides opportunities for networking operators to boost data traffic and should become a mainstay of operators' plans to boost revenue and sign up new subscribers.

That's the conclusion of a report on the mobile gaming market by industry analysts Frost & Sullivan which reckons the industry segment generated revenues of $436.4 million last. Steady growth for messaging-based, web-based and downloadable mobile gaming could push total revenues to $9.34 billion in 2008, it reckons.

However this optimistic prediction is based on a number of factors, not least the successful implementation of micro-billing systems. Operators will also have to attract gamers of the attractions of pay to play.

Consumers are wary of making over-the-air payments with credit cards for mobile services, so network operators will need to use billing-on-behalf-of-others (BOBO - yes, that's what Frost calls it) techniques to collect revenues for content providers.

"Most network operators in North America and Europe will have to work hard to implement micro-billing systems for third-party content," said Frost research analyst Kshitij Moghe. "Although they recognise the importance of the BOBO model, few had the mechanism in place at the end of 2001."

Until these secure systems are installed, consumers are likely to stay away from mobile gaming. Naturally, operators will have to convince them to pay to play.

"Network operators will face an uphill challenge in getting consumers to pay for premium mobile content such as games," says Moghe. "The Internet model of free content has become well engraved in consumer attitudes, especially in North America."

Many Internet content providers have shown how difficult it can be to persuade users to pay for information and entertainment services. The question is whether mobile operators will fare any better.

Since the launch of the mobile Internet, network operators have given away content for free, requiring customers to pay only for airtime. To convince users to pay for content, operators will have to make it compelling and facilitate easy billing. ®

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