VimpelCom, a company that runs operators in multiple countries, today announced an agreement with Microsoft and Nokia to offer operating billing for its customers on Windows Phone devices. VimpelCom is the parent company for a number of operators: Beeline (Russia), Kyivstar (Ukraine), djuice (Norway), Wind (Italy and Canada), Djezzy (Algeria), Mobilink (Pakistan), Banglalink (Bangladesh), and Telecel (Zimbabwe). In total is has just over 200 million subscribers and is the sixth largest operator in the world by subscriber numbers.

As a result of the agreement, later this year, VimpelCom customers will be able to buy apps, games, and music using operator billing. The cost of any purchase will be added to their monthly bill, or deducted from their pre-paid balance. As part of the agreement there will be a VimpelCom Shelf within the Windows Phone Store app that will be used to feature up to 200 locally relevant apps or games.

Operator billing is more important in some markets and certain consumer segments than others. In general the importance and relevance of operating billing this is dictated, to a large extent, by access to a credit card and/or debit card. Younger consumers are less likely to have access to a credit card in most markets, and, as a result, can be left without the ability to buy content on their phone. Furthermore, in some markets, credit card and/or debit card ownership is not universal even amongst older consumers. 

As a result operator billing is seen as an important way to increase the addressable market for commercial (paid for) apps. Microsoft has also done this by adding support for PayPal in some markets, and providing redeemable vouchers in other markets, but operator billing is generally recognised as the most universal approach. It also provides a very easy to use and understand user experience as, in most cases, just a single interaction is required (i.e. no registration or set up required).

Operating billing requires integration with an operator back-end payment systems. In some cases an aggregator can be used. However, a direct agreement with the operator is typically required for app stores in order to achieve sustainable commission levels (aggregators can typical charge anything up to 40% of the transaction fee).

Both Microsoft and Nokia have been building out operator billing relationships, but they are a long way from universal coverage. The drive to build out operator partnerships for Windows Phone has largely been led by Nokia, because it already had a great deal of experience in this area from its Nokia Store (Symbian and Series 40 product).

The partnership with VimpelCom is notable because it covers a large number of emerging markets (where, in some markets, a significant portion of the market is "unbanked" (i.e. no bank account, no credit/debit card), and because of the size of VimpelCom.

From the press release:

A dedicated ‘VimpelCom Shelf’ will make it easy for VimpelCom customers to navigate their way among the content available in the Windows Phone Store. Available via the local Windows Phone Store, the ‘VimpelCom Shelf’ will feature up to 200 selected applications, tailored to offer local content and services.

The ‘VimpelCom Shelf’ and mobile account payments for the Windows Phone Store will be rolled out in VimpelCom’s operations across the globe, starting later on this year.

Mikhail Gerchuk, VimpelCom’s Group Chief Commercial and Strategy Officer, said:

The Windows Phone mobile partnership will enable us to significantly enhance the smartphone experience for our customers. With the ‘VimpelCom Shelf’ we will bring tailored content to VimpelCom customers around the globe who use Windows Phone smartphones and will provide them with the most convenient way to access and pay for apps. In many of our markets we will be the first operator to launch mobile account payments for the Windows Phone Store.