Gemalto: Major NFC Projects to Launch; Confirms Isis Contract
France-based smart card vendor and trusted service manager Gemalto said today its telecommunications unit is working on at least 20 NFC and LTE commercial deployments, some of which could launch before the end of 2011.
Gemalto, which is the largest supplier of smart cards worldwide, made the statement as part of its third quarter sales report, which showed total revenue increased to €490 million (US$666.2 million) in the quarter, up by 2% without compensating for currency fluctuations.
The projects are contracts with mobile operators, though Gemalto didn’t break out the NFC projects from the LTE or 4G launches. Gemalto is handling the combined 20 or more projects in its software and services department, which includes its TSM operation. Software and services is part of Gemalto’s mobile communication’s business unit, which mainly sells SIM cards.
TSMs download and manage applications, such as payment, to secure chips in NFC phones, especially SIM cards and embedded chips.
“Twenty commercial projects in preparation for commercial deployment; we speak of major projects, and they will contribute (to revenue) this year because several will be turned on before the end of the year,” said CEO Olivier Piou in responding to a question from a financial analyst.
Piou: '(Telcos) see Visa and MasterCard Trying to Compete'
During the question-and-answer session with analysts, Piou also confirmed that Gemalto is serving as TSM for the Isis joint venture, made up of U.S. mobile operators Verizon Wireless, AT&T and T-Mobile USA. NFC Times reported the customer win last year, though Gemalto had not announced it.
Piou, when talking about Isis, made an unexpected comment about competition he said he sees between the Isis telcos and Visa Inc. and MasterCard Worldwide. That is despite an agreement announced in July by Isis and the major U.S. card networks, including Visa and MasterCard, establishing a working relationship for the rollout of NFC-based mobile commerce. The agreement will make it easier for banks that Isis signs up to put their contactless payment applications, such as Visa payWave or MasterCard PayPass, on the Isis NFC phones.
Isis had earlier in the year abandoned plans to launch its own payment brand, which would have competed directly with Visa, MasterCard and the other major payment brands.
“They (telcos) are active in the sense, they see Visa and MasterCard trying to compete,” Piou said during today’s conference call. “I have read in some analyst paper that MasterCard wanted to join Isis or had joined Isis. This is clearly not the case, so they will compete. So it’s going to be an interesting battle, where the telcos essentially have decided to do their joint venture. One part of the reason is the profitability level and the cash flows of the telco are quite different from what will happen in Isis, so you will have good visibility about it.”
He added: “They (telcos) are firing up on (all) cylinders.” The Isis project is planned for launch in 2012.
NFC Times requested a follow-up comment or clarification from Gemalto, though has not yet received one.
MasterCard is a partner with Google in its Google Wallet, a competitor to Isis; and Visa has plans for its own digital wallet. Both payment networks have said they favor open wallets, however. For example, MasterCard’s chief emerging payments officer, Ed McLaughlin, said in July that the agreement with Isis adds options for consumers. “We absolutely believe that mobile payments have to be open.”
Gemalto Gets Deutsche Telekom TSM Contract
Piou did not mention any of the other trusted service management contracts, but NFC Times has learned that Gemalto also has won the contract to serve as TSM for Germany-based Deutsche Telekom group.
Deutsche Telekom had gone out for tender for a TSM to cover four major European operators in its group–its flagship German operator and branch operators in Poland, the Czech Republic and the Netherlands, though the latter is part of a bank-telco consortium that might choose it’s own TSM. The Deutsche Telekom operators in Germany and Poland were to launch NFC before the end of 2011, but sources say the launches have been postponed until 2012.
Update: Gemalto also announced that it had won a tender from the Singaporean government to provide TSM services for a national rollout. The govenrment's Infocomm Development Authority had issued the request for tender last year. The agency expects all three major mobile operators and service providers on the small island nation to plug into the platform. End update.
Gemalto earlier disclosed TSM contracts with Barclaycard for the Quick Tap mobile payment project that has already launched in the United Kingdom with telco Orange UK. Gemalto also is serving as TSM for Orange in France and for a couple of French banks. And it has some TSM projects in Asia and Turkey, though most are not major projects. It’s unclear if any of the UK, Asian and Turkish contracts are included in the combined 20 or more NFC and LTE contracts Gemalto announced today.
Separately, Gemalto had earlier disclosed wins for three contracts to supply LTE technology: to Verizon in the United States, Japan’s NTT DoCoMo and to a smaller U.S. telco, Texas-based MetroPCS. Gemalto said its LTE technology includes 4G SIM cards and over-the air platforms to manage them. For its separate NFC projects, Gemalto also could provide NFC-enabled SIM cards, if SIMs are used as the secure elements storing applications.
Piou, when talking about the 20 or more contracts for LTE and NFC projects, also mentioned the prospect for sales of millions of high-end SIM cards to the mobile operators involved. But a Gemalto spokeswoman told NFC Times that none of the NFC and LTE projects that Gemalto cited today are for NFC or LTE SIM card sales. They are software and services contracts, such as trusted service management for NFC mobile-payment projects. Gemalto might also sell NFC-enabled SIMs to the same operators, she said.
Economy Not a Hindrance
When asked, Piou said he didn’t think the weak economy would derail any of the NFC or LTE projects.
“Not really, no, operators, essentially, they are forced to move to NFC because they have a short window to take the first mover advantages, and they’re not willing to leave it to others,” he said, adding that telcos moving to LTE already have network infrastructure that is compatible with LTE network technology.