Three against One in Mobile Commerce

POSTED BY Global Administrator
Catching-up on the news last week, I noted that  UK mobile operator Three has lodged an objection to the EC about the planned mobile payments JV announced in June by O2, Everything Everywhere and Vodafone.  I found this both unsurprising and surprising at the same time. Unsurprising, because quite naturally Three, being the smaller of all the UK MNOs, is always going to object to its larger competitors’ activities on the grounds of unfair competition, whenever it can.  Only the previous week it was urging Ofcom not to delay the timetable for the auction of new UK spectrum. This was because Ofcom had previously given the other three operators permission to reallocate spectrum, taking the pressure off Three’s competitors, but not giving Three the opportunity to get the new spectrum it needs for its own growth ambitions. No surprises there, then. But why was it also surprising? Well, while spectrum auctions, allocations and bandwidth are fundamental to a mobile network operator’s ability to function (i.e. basic connectivity), fighting for a piece of a largely undeveloped service capability like mobile payments seems less important – or is it? Clearly not, as far as Three is concerned, and it is a position that Juniper Research also agrees with, one on which I have blogged previously (see “Who are you going to trust to look after your mobile wallet?”).  Mobile Commerce is going to be big, and a game changer for both the mobile and finance industries, hence our focus on it. But, to take this particular development further, it’s interesting that Three cites the negative impact on the consumer of a mobile payment “cartel” charging higher prices to the user.  On the other hand, the JV tends to emphasise its openness to all players (including Three, by the way) and on ease of use for the retailer.  Playing the consumer card is always a good strategy: it’s the card that has been successfully used in the past to open up a market for competition against incumbents and the UK has always been in the forefront of telecoms liberalisation.  Decades ago it was used to force BT to open up its fixed access network to competition, since then it has been a central tenet of the allocation of wireless spectrum across competing mobile network operators - now perhaps it is being invoked to “level the playing field” for mobile commerce. It just shows how important the mobile commerce market is – worth fighting for with as much determination as for basic connectivity.