NeoMobile is an example of a product business model. It is a mobile commerce company that enables companies to charge customers for products or services directly through their cell phone bills. This so-called direct carrier billing is an alternative form of mobile payment that does not require the use of credit/debit cards or preregistration at online payment solutions as PayPal. When purchases are made using direct carrier billing, the buyer’s mobile account is billed (for postpaid subscribers) or debited (for prepaid subscribers) for the purchase. This makes mobile purchases easier and faster for consumers.

NeoMobile also provides local market advisory services, 360-service management and end2end integration services to AdNetworks and Performance networks in a work-for-hire business model that it operates alongside its product business model. This write-up will focus on the product business model.

Neo Mobile was incorporated in 2007, after a spin-off of Italian telecoms company, Teleunit. Before its incorporation, NeoMobile was the Value Added Services (VAS) unit of Teleunit. Within the first year of incorporation, NeoMobile became active in Italy, Turkey and Spain. Over the next 7 years, the company rapidly expanded its operations through acquisitions and partnership. In 2008 and 2009, NeoMobile got investments from MP Venture (2008) and Bluegem Capital (2009). It leveraged on these investments and its financials to acquire Arena mobile (2009), Zero 9 (2010), Onebip (2011), UCT group (2011) and made a minority investment in Boostermedia (2013).

NeoMobile is a market leader for mobile commerce via carrier billing in Italy, Brazil, Spain, France, Mexico, Colombia and Turkey. It has direct billing integration with 40 carriers in 14 key markets and access to 200 mobile operators in 70+ markets for mobile direct billing, Premium SMS (PSMS) billing and Internet Protocol (IP) billing. In 2012, it had over 250 employees, and revenue of over €160 million.

NeoMobile is primarily a Business-to-Business company (B2B). As a B2B, it provides mobile commerce solutions to companies – primarily advertisers. It also partners with App developers and mobile content producers / publishers to monetize their content, such as games, videos, pictures, etc., through direct carrier billing. Finally as a B2B, NeoMobile provides mobile payment solutions through its “onebip” payment system.

Learn more about the Product Business Model

A dyadic transactional relationship where your good or service can be designed and delivered without prior interactions with the customer.

Engagement  — Value Creation Proposition
NeoMobile creates value by assisting its customers (digital merchants) and partners (app developers, mobile content providers etc.) to monetize their products or services. The company does this through its direct carrier billing solution, Onebip. (Onebip is a payment solution that enables consumers to make mobile payments with one click). The simplicity of this payment solution improves user experience, and increases conversion and user acquisition rates. According to NeoMobile, customers using carrier billing services are five times more likely to complete an app store purchase than if they were using a credit card.

The advantages of direct carrier billing include:

Customers have no need for credit/debit card or bank account or transferring sensitive payment information to make a purchase

Carrier billing is a low-friction mobile transaction method

It offers a possibility for carriers to stay relevant on mobile and develop a new source of revenue

Allows carriers, developers and app stores to collect payments from customers who lack credit cards.

Alternative monetization option in countries where credit card usage is low

Reduced customer support costs for merchants

Better conversion rates

Delivery — Value Chain
NeoMobile primarily serves its customers and partners through its advanced billing global payment solution, Onebip. Based on its partnership with network operators, this technology (Onebip) has deep integration with various carriers globally and enables payments to be completed in one click. To use the payment solutions software, a merchant or partner (app developers, etc.) must agree to certain terms and condition, register with NeoMobile and download an Application Program Interface (API). The terms and conditions is a contract that sets out the terms and conditions that shall apply to the services provided by NeoMobile for the merchant. The API enables the merchant or partner to integrate Onebip on its website or App. Once the merchant or partner signs up and integrates Onebip into their website or App, consumers of the merchants’ products can make payments with their mobile phone and charge the amount to their phone bill (for postpaid subscribers) or direct debit of phone airtime (for prepaid subscribers).

When a customer opts to pay via direct carrier billing, Onebip’s system checks its list of partners (network operators) to see where to send the payment request and forwards it to the correct operator. The operator checks if the user has enough money to make a payment and sends information back to Obebips. Onebip then debits or bills customer and sends a receipt as proof of payment.

When the transaction is complete, the merchant or app developer will get payment from Onebip within timelines stipulated in the terms and conditions. Onebip is also set up to monetize subscription-based services. In this case, consumers can opt-in or out of monthly subscriptions or payments for services like electricity bills.

Monetisation — Value Capture
Mobile Carriers charge a fee between 25% and 40% of the total cost of purchased goods. This fee is shared between the mobile carrier and Neomobile. The sharing formula is based on agreements between both parties.



BI Intelligence report – http://www.businessinsider.com/carrier-billing-hasntgone-away–here-is-why-it-has-got-developers-app-stores-and-mobile-carriersso-excited-2014-2

Neo Mobile Merchants Services terms and conditions –


Neo Mobile terms of use for buyers – http://corporate.onebip.com/docs/userterms-conditions.pdf

Onebip – http://corporate.onebip.com

NeoMobile – http://www.neomobile.com

Disclaimer — Written by Eno Hanson and edited by James Knuckles under the direction of Prof Charles Baden-Fuller, Cass Business School. This case is designed to illustrate a business model category. It leverages public sources and is written to further management understanding, and it is not meant to suggest individuals made either correct or incorrect decisions. © 2016