How are operators going to be relevant in mobile payments, especially in NFC? It’s still a topic up for debate. Operators talk about interoperability, scale and reach as their advantages over closed-shop systems such as Paypal, Google or Square. Those three plus control of the customer experience (whatever that means).
So they talk all this sort of reach-scale-interop chat, and then they go and do something different. This week, for instance, Telefonica Digital said it was making a strategic investment in BOKU. BOKU has been a payments provider for digital items, but is closing in on the physical world, offering a white label service for operators looking at NFC payments.
Telefonica said that it would use BOKU to extend its direct billing capabilities, as well as “the overall payment experience” (again, whatever that means). Telefonica, which is part of the open interoperable etc JV in the UK, if it gains regulatory approval, already has a wallet provider in the UK – Intelligent Environments. An O2 spokesperson said that Intelligent Environments would continue to have the role of building the wallet application for the UK wallet. Let’s move on.
It’s not long since Vodafone announced that it would be working with Visa, in what it termed as the “biggest mobile payments deal” in the world. That didn’t look like the most “all operators in it together” move. Now, this is not exactly fragmentation – after all operators have said that they will work on common standards, not on common providers. And they must differentiate somehow. So if Teleflnica thinks BOKU’s payments tech is a strategic advantage, and Vodafone likes the look of Visa’s scheme, then that’s up to them.
But I just ask this. If you were a merchant, looking to introduce mobile payments, where would you start? Who would you go to? I would look at the state of the mobile market: strategic investments, partnerships being announced and then parked, services being targeted and missing deadlines (O2’s mobile money service in the UK); some handsets that nobody much wants, some others promised but not delivered and I would stay well away.
Or…and here’s the thing…or I would go to someone who seems to have success already with online payments, who has a community of users with compatible devices, who has a clear proposition. Like, I don’t know, Google or PayPal.
One area where operators are having more impact driving harmonisation is in LTE – where they are coalescing around certain frequency bands. The problem is, they are not coalescing enough – through no fault of their own. They are at the mercy of available spectrum bands on a per-market basis. This means that device makers have to pick certain bands for certain markets. But eventually, to support LTE roaming, devices will require multi-band support, as well as multi-mode support.
For a heads up on whether the manufacturers are beginning to respond to that demand, I spoke to the test organisation GCF as well as the suppliers’ own body, the GSA. It looks as if there will be some multimode devices already this year, chiefly covering the Japanese and European markets. Of course, this is not really to meet a roaming case, but to allow a manufacturer to make just one model of a device, rather than launch different versions of the same device, like, for example, Apple had to do with its iPad.
Other significant operator news this week saw another major M2M platform launch, this time from Turkcell, who put up some pretty ambitious connection numbers. And there was also the small matter of Everything Everywhere getting the nod (well actually, a prior nod, a nod to a nod I guess) from Ofcom for delivery of some LTE goodness over its ample 1800MHz spectrum.
Immediately the other operators claimed this would be bad for consumers because…er well, for no good reason really, other than they are a bit peeved that EE, with its fat 1800MHz holdings, is able to go where they cannot.
And I suppose we must talk about this EU E5 collusion probe. Very few people I have spoken to think this is going anywhere. It is being taken seriously, don’t misunderstand me, but is being interpreted as a “move” in the game of operator versus regulator. The operators pulled the tail of the tiger at MWC, by asking for a regulation holiday. The strike back comes not from the regulator, but the competition authorities. It’s unlikely they really have the appetite for a full cartel/collusion probe. One across the bows, my grandad would have called it, even though he’d never been to sea in his life.
On such nautical musings I will leave you. Save to point out that our roster of video from Mobile World Congress is now complete – so you can see some of what you missed, including a first in LTE-A, a first in DPI, and a first in small cells, as well as a whole heap of analysis and chat.
Keith Dyer
Editor
Mobile Europe