Growing Pains for Mobile Billing in South Africa

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Mobile billing is coming of age but not without some growing pains. It opens up the world of micro-payments yet consumers are paying extra for download costs, even when unsuccessful, and they are unable to get refunds.

"The mobile industry needs to make every effort to boost consumer confidence in mobile billing. Clearer pricing and refunds on mobile content are good starting points," said Dr Pieter E. Streicher, managing director of, a service provider of SMS messaging services.

Mobile network operators can bill millions of people for small amounts of money via their cell phone regardless of their location. Internet access providers, on the other hand, have lost out to this opportunity as billing on the Internet is mainly done through third parties such as Visa, Mastercard, Paypal, and Moneybookers.

"Already mobile billing is used on a large scale for TV voting, mobile content downloads and social networking services. Mobile network operators can link a low value transaction to a cell phone number and then bill against a subscription or pre-paid airtime contract," said Dr Streicher.

Yet, inefficient message delivery has resulted in consumers demanding billing transparency. For example, in India riots erupted in June 2007 as votes for the Indian Idol TV show were billed for but not counted by the show. In the United Kingdom, the reality TV programme Big Brother dropped SMS voting in mid-2007 as they were unable to guarantee all viewer votes could be counted.

Consumers also view the buying of mobile content (such as images, ringtones, video clips, and wallpapers) as problematic. Consumers are billed separately for the mobile content and the downloading of that same content.

According to Dr Streicher, the downloading cost can vary significantly depending on the size of the content. Then, even if the download is unsuccessful, the consumer is billed for the mobile content.

"It is no wonder that consumers are confused with how mobile billing for data services actually works. This is further compounded among pre-paid customers who have little no monthly itemised billing to double-check their cellular payments. Their airtime is simply deducted," said Dr Streicher.

In Dr Streicher's view further steps can be taken by industry to ensure that consumers are sure of the cost of purchasing mobile content.

Mobile network operators should enable wireless application service providers (WASPs) to reverse charges. Currently, WASPs can only bill consumers for services.

Mobile network operators should enable WASPs to pay for content downloads on behalf of consumers. This means that the bandwidth cost for downloading mobile content is included in the content charges. The risk of mobile content downloads is then carried by industry and not consumers.

These changes will offer benefits to consumers by allowing WASPs: to advertise one price for mobile content in the media; to offer a money back guarantee on any mobile content purchase; and provide free opt-out messages to unsubscribe from unwanted mobile services.

"This will greatly reduce the need for elaborate terms and conditions for advertising mobile content services and boost consumer confidence in mobile billing," said Dr Streicher.

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