1

Effectively Payingfor Internet Contenton Mobiles

Ray Anderson

© 2007 Bango plc

www.bango.com

NPAY07

2

Effective Payment

• Bango’s role in Mobile Web Payments

• The challenges of integration

• What are the “best methods”

• Content Genre

3

About Bango

• A global, mobile internettechnology company

• Founded 1999

• London Stock Exchangefloat June 2005 (AIM: BGO)

• Offices inCambridge (UK)New York, San Francisco (US)Madrid (ES)Köln (DE)

Chosen by leading mobile operatorsto accelerate their business

Award winning technology

Chosen by leading content providersto reach their mobile users

4

?

The market opportunity

1.2B Mobile on Internet

700M PC on internet

3B by 2010

1.1B by 2010

One BillionInternet Sites

?

1,200million of 3,050million mobile users connected to internet

5

Bango focus: direct-to-consumer

The total market

On-portalCommercial relationship with each operator

Direct-to-consumerYou promote and engage

directly with the whole market

6

Bango focus: 3 key challenges

Getting visits to a site:- diverse search models- diverse access models

Information on the visitors- where and who- tell me about them

Payment for valuable content- wide range of billing channels- much broader reach than PC

Others do:

- branding- marketing- site creation- pricing- hosting- content- rights mgmt.

… Bango simplifies and enables globally

7

The move to an “internet model”

• Less “wasted marketing”- Avoid investing time and money on disconnected users- Focus investment on users familiar with mobile browser

• Better ROI- optimize response for handset- pay by results advertising- pay by results search- user generated marketing

• Faster route to market- no operator approvals needed- global reach- fast to adapt (real-time)

8

Off-portal browse and buyUser navigates

to mobile siteDownload

Page

P-SMS

$£€

Currency conversion VAT and other TAX

User’s language Billing policies

Aggregateall paymentsand send on

Collectpayment for

content

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Global reach of mobile web

VODAFONEAUS

TELENOR

O2DEU

PROXIMUSBEL

BHARTIIND

MTNZAF

NEXTELUSA

VODACOMZAF

SFR

VODAFONEDEU

TMOBILEUSA

CINGULARUSA

TMOBILEUK

SPRINTPCSUSA

VODAFONEUK

ORANGEUK

O2UK

ORANGEROM

ELISAFIN

BELLMOBILITYCAN

TELEFONICAESP

TELE2SWE

VODAFONENLD

NETCOMNOR

VODAFONEIRL

VODAFONESWE

INTERNAPUSA

VODAFONEESP

SIFYIND

TELIASWE

ORANGEISR

IDEACELLIND

FRANCETELECOM

TELSTRAAUS

VERIZONUSA

ENITELNIC

ORANGEISR

YAHOOUSA

VODAFONEIRL

VODAFONENZL

BOUYGTELFRA

INTERNAPUSA

TIMITA

VODAFONEESP

VODAFONEDEU

FRANCETELECOM

VERIZONUSA

VODAFONEAUS

CTIMOVILARG

TELKOMSELIDN

SATELINDOIDN

TELEMOVILSLV

TATAIND

MOBTELYUG

CHINAMOBCHN

IDEACELLIND

DIGICELJAM

CWJAM

TELEFONICAECU

RELIANCEIND

TOUCHMDV

DOBSONUSA

ORANGESVK

SMARTCOMPHL

VODAFONEHUN

OPTUSAUS

TELEPERSONALARG

TELENOR

MAXISMYS

BELLMOBILITYCAN

BSNLIND

DIGIMYS

TELECELPRY

TELSTRAAUS

GRUPOICECRI

PROMONTEYUG

TELEFONICAPER

TELE2SWE

TELENORPAK

TELEKOMYUG

NEXTELUSA

TMOBILEUK

TMOBILEUSA

BITELTU

SFR

CINGULARUSA

SIFYIND

TELEFONICAARG

DIALOGLKA

GRAMEENPHONEIDN

SUDATELSDN

VODAFONEUK

ORANGEROM

BHARTIIND

MTNZAF

SPRINTPCSUSA

ORANGEUK

VODACOMZAF

O2UK

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Bango BillRankTM technology

Ban

go B

illR

ankTM

Tech

nolo

gy

>13,000,000user profiles

across3,000+ sites

Operator

User Info.

U/R/G rating

Billing cost

Min margin

Antifraud

Availability

User Pref.

AggregatorsPremium SMS billing

Trusted statuswith operators

Operator BillingDirect connect to operator

Alternatesto expand coverage

Your mobile website Factors:

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3,000+ Content Providers & Merchants

Ban

go S

yste

mAggregatorsResell Operator Billing

E-topup Operators

Retail ATM Cards Banks

Cash

Bango Delivers “best biller”

700,000,000 mobile internet users700,000,000 mobile internet users13,000,000 user profiles13,000,000 user profiles

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Content ProviderBango

Holy Grail: High Conversion Rate• Decided not to proceed

- did not expect to pay- saw price & declined- saw price in their currency- could not understand- did not like T&C- session terminated

• Tried to pay but failed

- no money available- barred- did not work- sent to PC (may have returned)- attempted fraud- session terminated

Ask toPay

Thanksfor

Paying

Paid as % of Asked=

Conversion Rate

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Example payment flows

Direct on-bill1-click payment

Credit/debitcard

PayPal

Currency and languageauto conversion

Download

Choose Pay Download

CP customizes thelook and feel

14

Global Composite Conversion Rate

04/01/2006

11/01/2006

18/01/2006

25/01/2006

01/02/2006

08/02/2006

15/02/2006

22/02/2006

01/03/2006

08/03/2006

15/03/2006

22/03/2006

29/03/2006

05/04/2006

12/04/2006

19/04/2006

26/04/2006

03/05/2006

OPERATORPSMSCARDIVR

50%

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Conversion Rate by Operator Jun 05

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Conversion Rate by Operator Sep 05VO

DAF

ON

E U

K

O2

UK

VOD

AFO

NE

DE

OR

ANG

E U

K

TMO

BIL

E U

K

OTH

ER

UK

VER

IZO

N U

S

ATT/

CIN

GU

LAR

US

NEX

TEL

US

TELE

FON

ICA

ES

VO

DA

FON

E IR

L

O2

IRL

TMO

BIL

E U

S

SPR

INTP

CS

US

STA

RH

UB

SG

TELS

TRA

AU

S

VOD

AFO

NE

SW

E

ME

TEO

R IR

L

TELI

A SW

E

VOD

AFO

NE

ES

VOD

AFO

NE

IT

TELE

2 LV

A

VOD

AFO

NE

AU

S

O2

DE

TELE

NO

R

KPN

NL

TMO

BILE

HU

N

TIM

IT

VOD

AFO

NE

NZ

TMO

BIL

E D

E

TELE

2 SW

E

VO

DA

CO

M Z

A

VOD

AFO

NE

PT

MTN

ZA

ARB

EU

SFR

FR

AMEN

A ES

VOD

AFO

NE

HU

N

BIT

ELTU

TELE

2LU

X

TELE

2LTU

TELE

2ITA

TELE

2FR

A

TELE

2EST

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Variations in 1 operator “X”:

n/a4541.850.14.6Avg time (s)

84.7%48.5%65.4%65.5%92.3%OK %GermanyPortugalSpainBelgiumUK

• UK billing performance by far the best– 10x faster than any other country

• Portugal has lowest success rate– New deployment – teething troubles

• Belgium has longest processing time– Due to additional post-payment advice page

• Germany using older, “on-portal” solution

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Vs Other Operators

6%29%0.02%AUTHORIZING %

n/a

64%

Europeanoperator

n/an/aAvg time (s)

92%86.15%OK %

US operatorUKoperator

• UK operator using similar architecture to UK-”X” example• European operator using similar architecture to “X”-DE• US operator using similar architecture to “X”-DE

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USA Conversion Rates

00.050.1

0.150.2

0.250.3

0.350.4

0.450.5

NOVDEC

JAN

FEBMAR

APRMAY

JUN

JUL

AUGSEP

OCTNOV

DEC

Direct BillFirst CP’s

More CP’s

PayPal & Repeaters

Cingular

Other USA

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Conversion Rate by Customer (WW)Conversion Rates of Content Providers with >50 Payments in May 2006

0

10

20

30

40

50

60

70

80

90

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The attractions of alternatives

• Typical “Operator Billing”: 75% outpayment, 90 day payment

• Typical “Financial Billing” 93% outpayment, 10 day payment

• Typical business model (30p/59cent cost music track):

99p sale = 84p (ex VAT) 21p billing 25p Mktg 30p royalty 8p marginvs99p sale = 84p (ex VAT) 6p billing 25p Mktg 30p royalty 23p marginor99p sale = 84p (ex VAT) 6p billing 35p Mktg 30p royalty 13p margin

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Alternative Billers …

• Simulations and trials have included:

Einzugsermächtigung

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Genre Issues

• Wide range of restrictions on Operator Billing

• Credit Card less restrictive / more mature

• PayPal has restrictions

• Google checkout relatively open

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How to minimize billing costs

True Biller independenceBillRank technology

Wrong billing method may cost5x more!

Best billing method

TechnologyRisk minimization systemsSolid contracts

Billers may repudiateUsers may demand refundsRevenue leakage

Manage risks

Automated systems(24hr)Critical mass of staffService level agreements

Credit control, auditingtransactions, handling refunds& noise. Checking systems.

Manage money collection

Demonstrate volume storyCompeting billersDemonstrate quality service

Charges from biller- often volume based- often negotiable for upside

Collect money from user

Minimize integrations. (1)Share management costsMultiple data-centres

Technical integration, test,management, auditresilience

Connect to billing provider

To minimize cost:What it costs:Requirement

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Summary

• Mobile web is widely used, and increasing fast

• Billing methods are highly segmented

• Mobile operator billing is immature but evolving(high cost, high-touch, opaque, no refunds, customer care)

• Alternative billing methods are emerging– with backing of major brands

• Mobile and PC web are merging

• Flat rate data (2007) will drive explosion of mobile web