Picture: BLOOMBERG/WALDO SWIEGERS
Picture: BLOOMBERG/WALDO SWIEGERS

With more people using the internet to work from home and relying on e-commerce in a “low-touch economy”, Vodacom says there is an opportunity for businesses to increase their website or app traffic through reverse billing.

Reverse billing is when companies negotiate with mobile network operators to make access to their online platforms and website free for consumers, while taking on the cost themselves.

Developed in 2012, the service was first made available to customers in 2014, Fatima Hassim, managing executive of products and services at Vodacom told Business Day. Reverse billing has gained traction since 2015, but saw an uptick in demand as the lockdown began.

Hassim said small businesses can increase their website traffic with reverse billing, with companies mainly using the service in two ways.

Companies that have moved their staff to working remotely can pay Vodacom and other mobile operators to make enterprise websites and systems free to access for employees. The company pays Vodacom what those employees would normally have incurred as data charges to ensure work gets done with friction caused by high internet access costs.

For customer-facing operations, businesses make access to their website free as a way to entice consumers to shop and use their services. That said, Hassim is quick to differentiate between reverse billing and zero-rating. With reverse billing, companies take on the cost of internet access; with zero-rating, mobile operators take on the cost.  

In May, for example, What3words, a British start-up that says it can find any location on the planet using three words, signed a deal with Vodacom to zero-rate its location platform in its latest move to shake up the traditional address system. In that case, Vodacom made the website zero-rated — accessible at no data cost — for its subscribers through the ConnectU platform, first launched at the start of April.

This adds to the growing list of zero-rated services offered by mobile operators in recent months, mainly driven by pressure from competition authorities and in response to the Covid-19 crisis.

When a company pays for reverse billing, Vodacom will give a special URL or link to that business’s online properties, through which users can get free access. In addition, a business can customise how this access is granted. A clothing retailer can, for example, make browsing the catalogue sections free, but once a customer wants to check out, those parts of the site will be paid for.  

Specialist biNu

Hassim would not be drawn on how much money Vodacom makes from the services, but a glance at activity from its competitors may give some indication.

Last year, MTN signed a deal with reverse-billing specialist biNu to offer free app and website access in SA.  

The agreement would see MTN offering biNu’s platform to its enterprise client base. By zero-rating their digital services, organisations will be able to expand their reach, increase engagement — and lower communication costs by moving customer engagement online from call centres and shops/branches, biNu’s CEO Stephen Newton said at the time.

The company said it had identified an estimated an opportunity for R140m per annum in SA as a conservative estimate for reverse billing locally.

Demand for the service has, so far, come from retailers, public enterprises and call centres, with some work now being done with motor industries, Hassim says.

But even with rising demand for these services, she bemoans the impact of Covid-19, saying “some of our clients are struggling”, particularly small ones. “Large corporates have to do these things” she said, adding that such companies see this type of expenditure as necessary to keep work going, and have enough money on hand to absorb the cost.

gavazam@businesslive.co.za

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