GSMA Names New NFC Point Man as It Seeks to Clear Way for Telco Rollouts
The GSM Association has named its new point man for NFC, Pierre Combelles, vice president for open innovation at France Telecom-Orange group, the GSMA told NFC Times.
Combelles takes over as NFC business lead for the big mobile operator trade group at a critical time–as more telcos gear up for long-anticipated NFC rollouts in 2013 and operators face growing competition to their planned SIM-based mobile wallets from such over-the-top players as Google, PayPal and Apple.
At the same time, handset makers could also compete with telcos in certain markets using embedded chips in their NFC phones.
Combelles told NFC Times that the GSMA’s NFC program will have three priorities in the coming year: Helping operators in promising NFC markets roll out services using lessons from the handful of rollouts already launched by telcos; streamlining testing and certification of NFC handsets; and filling in the gaps of NFC standards and procedures.
Combelles takes over for interim NFC business lead Reed Peterson, who will continue as the GSMA’s vice president for overall business and market development. Peterson filled in after former GSMA NFC business lead, Nav Bains, left the organization in April for Silicon Valley-based NFC vendor Vivotech.
Combelles will work with James Heaphy, NFC program director at the GSMA, who executes on the association’s NFC strategy. The GSMA has more than 20 staffers working on NFC.
The appointment comes amid slow progress in the first rollouts of NFC by telcos, including those in Turkey and the UK, and delays in the launch of a first two-city pilot by U.S. telcos that make up the Isis joint venture.
Even in South Korea, where operators have already rolled out millions of NFC phones and SIMs, awareness of NFC services among consumers remains low.
Last week, Turkey’s largest operator, Turkcell, among the first telcos to commercially launch NFC, in April, 2011, acknowledged adoption was slower than expected among subscribers, also blaming poor awareness among subscribers. The operator, while stressing it remains committed to NFC, also plans to introduce cloud-based payments at the point of sale as part of its new mobile wallet.
“The fact that it (NFC) takes time is, of course, frustrating,” Combelles told NFC Times. “Executives would like things to go faster. But we should also bear in mind–This is life changing; it’s really a revolution of people’s habits.”
NFC: A Top Priority
GSMA director general Anne Bouverot, with approval from telcos on the association’s board, has made NFC one of the group’s five priority programs, along with such others as spectrum access and machine-to-machine connections. The GSMA has also put NFC in a separate fast-track program to try to accelerate rollouts.
Operators view NFC as a growth opportunity as their data and other long-standing subscriber revenue tapers off. They have missed out on much of the revenue from smartphone apps to the over-the-top, or OTT, players, and seem determined not to let that happen with NFC.
Bouverot played down the threat by the likes of Google to the operator business cases for NFC and rejected the idea that telcos are pushing their SIM cards as secure elements on service providers in order to guard what they perceive as their turf.
“We’re all for competition, and I think there are very strong advantages to SIM-based secure elements,” she told NFC Times, noting the SIM cards provide banking card-grade security, as well as portability. “It allows you to do remote deactivation. They (consumers) want to know there’s a way to deactivate their phone if it’s lost or stolen”
It’s possible to deactivate a wallet remotely without the SIM, as with the Google Wallet. But telcos also contend that since they serve local markets and maintain actual storefronts, they would be more able to address technical and commercial problems that might arise for consumers using their NFC phones and services than the Internet players could.
According to the NFC plans of most operators, however, all of that would come with fees for service providers, including renting space for their secure applications on the telcos’ SIMs.
The GSMA is sending out representatives to assist operators in preparing for NFC commercial launches, including engaging in negotiations between telcos and service providers in certain markets, where needed. The reps are also, no doubt, called upon to shore up confidence in the SIM-based concept among some of their own network operator members, who have been bombarded with a lot of buzz in the tech press about cloud-based mobile commerce services.
The association earlier this year scored a victory by helping to convince giant telco China Mobile to go for SIM-based NFC. The operator plans major trials in February. Operators in other major markets are also in various stages of development of NFC, including such other emerging markets as Russia and Brazil, as well as more advanced markets in Europe, Asia, North America and Australia.
Opening Up to Third Parties
Bouverot, a former executive at France Telecom-Orange, said she hired Combelles in part for his diplomatic skills, which she said would come in handy when dealing with operators.
He’ll assume his new position at GSMA on Nov. 1. Since 2008, Combelles, 46, has served as Orange’s first head of open innovation, a position designed to open up the telecom group to more third party products–not only for mobile, but for fixed telephony, Internet and TV.
About five years ago, he coordinated work on Orange’s first mobile app shop. Earlier, in late 2005, he helped to set up Orange group’s Technocenter outside of Paris. The center designs new products and services, including ensuring convergence between the telco’s mobile and fixed Internet infrastructure.
The center includes technical and product marketing and that’s the side of the business Combelles has mainly worked on during the past five years or so.
He’s also worked on an initiative for Orange with other big European operators that developed common application-programming interfaces, for example, an API for in-app billing. This work has been transferred to the GSMA.
A key area of the GSMA’s focus on NFC will be streamlining and harmonizing testing and certification programs. The area is a major source of complaints among handset makers.
For example, Hankil Yoon, senior vice president of product strategy for Samsung’s Mobile Communication Business, speaking at a recent conference, contended the rollout of mobile wallets, NFC services and standards for the technology are too fragmented, and so is the certification process for devices. The latter requires separate certification or validation testing from payment schemes, standards organizations and mobile operators for the same devices.
Combelles acknowledged the problems, though pointed to progress in such markets as the U.S., where Isis and card schemes are coordinating work on device certification.
“There are a number of actors that need to put their stamp on the handset, but for many of the NFC procedures, the tests are the same,” he said.
The problem is a thorny one. For example, a recently announced collaboration agreement between the NFC Forum and the payments standards group, EMVCo, has yet to yield “alignment” on NFC RF testing criteria for NFC handsets. Both the forum and the major payment schemes that own EMVCo certify phones or plan to do so. But EMVCo and payment scheme tests are mainly concerned with use of NFC phones in card-emulation mode. The forum addresses all communication modes, including peer-to-peer.
Even among operators using the same NFC handset models, the time to market can differ widely. For example, Orange UK was only able to add the Samsung Galaxy S III to its small lineup of NFC phones supporting its Quick Tap service in September, nearly five months after Samsung released the NFC-enabled model globally. Some other telcos were able to introduce it earlier.
The GSMA has considered setting up a global scheme among its member telcos to certify phones for SIM-based NFC, but it has ruled out the initiative for the short-term. “Maybe in long-term it would make sense,” said Combelles.
Meanwhile, while specifications for NFC bank payment, especially running on SIM cards, have been fairly well defined, there are gaps in standards for other applications, such as retail, loyalty and couponing. And there is also poor progress in standardizing the connections between operator mobile wallets and applications from service providers.
Operators in various markets, such as France, the UK and U.S., have formed committees or joint ventures to deal with these issues. The GSMA could fill in the gaps for these procedures and processes, Combelles said.
The standards for using SIM cards as secure elements are much more developed than those for embedded chips or microSD cards.
That is likely because telcos moved to standardize the single-wire-protocol-based SIM years ago. But critics say mobile operators continue to maneuver for control of secure elements in NFC phones or block use of those secure chips they don’t own.
The GSMA last year issued device recommendations for operators that specify to handset makers that if their NFC phones include support for multiple secure elements, they should make the SIM the default secure element.
While telcos and the GSMA say that service providers or even consumers could easily change the secure element, in practice it would be difficult– at least at present.
For Combelles, the technology questions are moot since the business processes are not yet in place to manage two active secure elements in the same NFC phone.
“How do customers know who is responsible for what?” he said. “If you start toggling between secure elements, it becomes unmanageable. Customers will call us, and we won’t know what tell them (about the non-SIM chip).”