Operators keen to move forward on NFC

POSTED BY Global Administrator
Mobile network operators have not, generally speaking, enjoyed the happiest days in recent years, what with them running out of people to sell mobile phones to and OTT interlopers nipping in and performing neat little land grabs across the content value chain. When you factor in the rising bills from mobile backhaul thanks to all those data hungry smartphones and tablets, and the margins are beginning to look uncomfortably tight.

Hence the need for new revenue streams; hence the interest in a little bit of land-grab of their own, this time in the NFC space.

On both sides of the Atlantic, operators have – rightly – gone for scale. In the US, Isis, the MNO-led consortium of T-Mobile, Verizon and AT&T, is expected to begin consumer trials in Utah and Texas later this month: a report in TMoNews has hinted that triallists will be able to use three NFC-enabled handsets - the HTC Amaze 4G, Samsung Galaxy S II and Samsung Galaxy S Blaze 4G – to redeem coupons and make contactless payments in-store. Assuming the trial responses are positive, ISIS - which has banking partners including American Express, MasterCard, Visa, Chase and Capital One - is then expected to deploy services nationwide.

In the UK, there is the wonderfully named Project Oscar, a joint venture between Telefonica, Vodafone, Orange and Deutsche Telekom. It was envisaged that Oscar would essentially provide an NFC payments “one-stop stop” for third party merchants and advertisers. It was originally hoped that Oscar would be up and running earlier this year, but objections from Hutchison (the only operator not invited to the party), Google and PayPal led to antitrust investigations by the European Commission. While this meant that Oscar was not in place by the time that the Olympics came to town, a report in the Financial Times has suggested that the EC will shortly approve the project.

Speed is of the essence here. In the context of NFC retail payments, an NFC interaction between consumer and retailer is not necessarily mediated by the operator;  the MNO’s role in this market could be said to be key, but not necessarily essential. Thus, if they are not to lose out to other sets of players (most notably the OTT providers), it is imperative for operators quickly to establish themselves, both physically – in  terms of getting the product out there – and socially,  by creating awareness of the product within the public psyche.

Unless they do, they may find that the NFC “wallet war” is, for them, over before it has begun…