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Momentum behind SIM based NFC is growing rapidly…

Last November 16th, GSMA announced that 45 world leading mobile operators have committed to support and implement SIM based NFC solutions and services, including the most relevant worldwide operators such as China Mobile, China Unicom,  Telefónica and other leading European Operators, but also the three largest U.S wireless service providers, T-Mobile, AT&T and Verizon, under ISIS joint venture.

 

The publication of a new set of industry specifications enables the development and global deployment of services, facilitating interoperability and ubiquitous SIM based mobile NFC services. This will avoid different approaches to NFC that will fragment the market and will accelerate service adoption.

 

In order to show some business forecasts, industry analyst Strategy Analytics estimates there will be 1.5 billion SIM based handsets sold worldwide during period 2010-16 supporting more than $50Bn transactions.

 

… with Telefónica very active …

 

Apart from the global industry efforts and improvements, Telefónica is also developing specific trials such as the recently announced with RIM with 350 employees in Distrito de las Comunicaciones (Madrid) that in the short term is planned to be extend to more employees around the world. People participating in the trial will be able to use contactless mobile payments with NFC enabled Blackberry smartphones in local banks and retailers. The SIM based solution included is designed to replicate physical wallet, that makes you select through different payment services, and allows you to make transactions, account balances, receiving confirmation...etc.

 

Additionally, Telefónica recent activities goes beyond their trial in Madrid headquarters and has also formed a Joint Venture with MasterCard in Brazil to deliver financial services to Vivo customers, allowing them to make payments, transfers, pay bills and online purchases. In the same way, at the beginning of 2011, a similar agreement was signed for all Latin American countries under the brand Movistar.

 

.. in a market where operators, financial institutions and OTT will compete intensively.

 

SIM based standardization amplifies the benefits of NFC by aligning different industry actors and interests on a common foundation for growth. This does not presume diminished competition but rather assumes that regulatory authorities and industry stakeholders need to foster a cross industry collaboration in order to yield greater advantages to market and end customers.

 

As said before, in the short term we will see intense market competition between mobile network operators and its SIM based NFC and other players like financial institutions or OTT players (Google, Apple, Amazon, Facebook, Paypal…) with other NFC approaches rather than SIM based. As an example of the fierce competition for this new revenue streams we will face, just mention this week’s conflict between Verizon and Google with the latter arguing that the operator is blocking its Google Wallet application in its Galaxy Nexus Android smartphone.

 

Jorge Morillo, Manager, Corporate Regulation Europe, Telefónica S.A.

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Lourdes Tejedor / @madrid2day

Telefónica Public Policy & Telefónica España Regulatory teams