Carrier billing market is consolidating

Guillermo Escofet/Ovum
13 Oct 2014

Boku’s acquisition of Mopay is further evidence of consolidation in the carrier billing market, where margins are tight and scale is vital. Boku says the merger turns it into the world’s largest aggregator for direct-carrier billing. But this is also a story of consolidation in the face of declining PSMS revenue.

Aggregators aggregate further

This week’s announcement by US-based carrier billing aggregator Boku that it has acquired Germany-based fellow aggregator Mopay does not come as a big surprise, given that the business both companies are in relies on volume for profitability and on the widest possible footprint of billing connections to mobile carriers for attracting customers.

Also, the premium SMS market, in which both Boku and Mopay are still active, is rapidly shrinking. The major carriers in the US shut down PSMS at the beginning of this year, and the regulatory screws are being tightened on PSMS in other parts of the world.

Boku was, together with Zong, among a new breed of aggregators that emerged late in the last decade focused on enabling carrier-billing payments on the desktop, primarily around gaming and social networks. Zong got snapped up by PayPal in 2011 and Boku was linked to rumored acquisitions by Apple and Google in 2010.

However, it is a survivor of the old 2G/2.5G mobile content world, Bango, which has taken much of the limelight over the past couple of years with numerous high-profile app store deals.

Boku now seems on a renewed drive to prominence. It has grabbed headlines recently for its deal last week with the UK’s three major mobile operators to extend carrier billing to physical goods such as tickets and magazines (for which it obtained an e-money license back in 2012); its deal with O2 UK to help enable iTunes-voucher payments; and now its Mopay acquisition. Last year, it also acquired India’s largest carrier billing aggregator, Qubecell.

The Mopay acquisition will help to extend Boku’s geographic reach in countries such as Indonesia and Vietnam. It should also more than double its customer base and increase the number of transactions it handles by two-thirds.

Guillermo Escofet is a senior analyst for digital media at Ovum. For more information, visit

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