Telefonica’s O2 to Add More App-Store Billing in Payments Push

Telefonica SA’s German unit will begin managing applications-store payments for two additional mobile-operating systems this year as telecommunications operators look for a greater role in delivering mobile services.

O2 Germany will announce agreements in 2011 to provide billing for apps for two “major” technology providers, Chief Executive Officer Rene Schuster said today in an interview at the Digital-Life-Design conference in Munich, declining to name the partners.

O2, the fourth-largest German telecommunications operator, said this month that it would begin letting customers pay for apps for Samsung Corp.’s Bada technology on their phone bills, rather than by entering credit-card information at the time of purchase.

Phone companies are increasingly looking to payment services to avoid being shut out of mobile transactions such as downloads from Apple Inc.’s iTunes App Store. Vodafone Group Plc CEO Vittorio Colao said last year that his company, the world’s largest mobile operator, would offer third-party billing for service providers, taking advantage of the bank details already held in Vodafone’s payment system.

“Payments are a huge opportunity for mobile operators, and we have more projects in the pipeline,” Schuster said today. So-called near-field communication, which allows mobile users to pay for physical transactions such as supermarket purchases by waving their devices across a reader, will extend their reach, Schuster said.

Industry Growth

Mobile-phone operators are seeking to tap into growth in the app industry, which may almost triple in size in four years. The global market for entertainment and workplace tools for mobile devices may grow to $40 billion by 2014, compared with $14.3 billion last year, according to consultancy Booz & Co.

Device manufacturers and operators are also working to make near-field payments a reality. France Telecom SA, that country’s largest phone company, said last month that it will begin work on a new version of SIM cards with capacity for contactless payments. Mountain View, California-based Google Inc. is also introducing the technology in the newest version of its Android operating system.

To contact the reporter on this story: Matthew Campbell in Munich via mcampbell39@bloomberg.net; Ragnhild Kjetland in Frankfurt at rkjetland@bloomberg.net.

To contact the editor responsible for this story: Vidya Root at vroot@bloomberg.net

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