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MTS strikes app revenue share deal with Google

Unauthorised in-app purchases have been in the FTCs crosshairs

As part of an upcoming series of interviews with top tier operator CTOs, telecoms.com spoke with Andrei Ushatskiy, vice president and chief technology officer for leading Russian carrier MTS, about the prickly subject of net neutrality. The carrier recently embarked on a revenue share deal with Google for Android apps sold in Russia.

Within the framework of the agreement, MTS installs Android Market as the primary interface on all of the MTS-branded Android smartphones it sells. Google has set up a special MTS-branded section in the Android Market to promote MTS-branded applications as well as those developed by MTS partners.

Under the revenue-sharing agreement, MTS will get 25 per cent of the revenues from each paid mobile application bought from MTS-branded mobile devices.

“Net neutrality is a difficult question to address. We would like to have subsidies from content providers of course, but the regulator has not made any firm decisions on this subject. We have a project with Google in place for Android apps at present to address this situation via revenue sharing,” Ushatskiy said.

The two companies are also working on making payment for applications directly from the MTS mobile account available for MTS subscribers.

Read our full interview with Andrei Ushatskiy and other CTOs from Orange, Sprint, 3, Telstra and Starhub.

Earlier this week, research suggested that more than a third of smartphone users in Europe are thought to pay for applications via operator billing. An online consumer survey of more than 2,000 smartphone users in the UK and Germany, carried out by billing firm Mach and research agency Opinium in April, found significant demand for direct operator billing, suggesting it could be the preferred payment method of choice for apps and in-app purchases.

Convenience and speed of use are the top reasons behind the popularity of one-click billing, with around 66 per cent and 50 per cent respectively citing these reasons. While around 19 per cent of smartphone users in the UK only said that they would be likely to switch networks if their provider was unable to offer direct operator billing.

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