UK Telcos File Formal Request to EU; Await Crucial Decision on NFC JV
The United Kingdom’s three largest mobile operators have filed their application with European antitrust regulators, seeking approval for their proposed joint venture to help them roll out NFC mobile wallets and services.
The application sets the clock ticking for a crucial decision by the European Commission. If regulators reject the proposal, it could set back the NFC wallet plans of telcos not only in the UK, but in at least five other European Union countries, where operators–in some cases joined by banks or other service providers–are proposing forming joint ventures.
The venture companies would develop technical and commercial specifications for NFC mobile wallet platforms and, in some cases, coordinate sales and marketing functions.
The proposed UK joint venture, code-named Project Oscar, would create a company owned in equal parts by Everything Everywhere, Telefónica UK (O2) and Vodafone UK.
The telcos are making no secret of one of their main reasons for forming the JV–to ward off the likes of Google and other so-called over-the-top players–a list that might one day include Apple. Google has introduced its own NFC mobile wallet in the United States and has targeted the UK as one of its international markets.
According to a published report, a joint statement attributed to the three telcos show that they, in fact, appear to be using the threat from new players to try to bolster their case in Brussels. “It (JV) will promote competition by bringing together the necessary scale to offer a credible alternative to the established online payments and advertising platforms offered by large US-based Internet players," the telcos reportedly said in a statement.
The telcos announced the planned venture last June, but only submitted their application to the commission this week, a source with one of the telcos confirmed to NFC Times. He said the application was filed Tuesday night, though the report in the Guardian, said the filing happened on Monday.
Negotiations and questions from regulators in Brussels reportedly delayed the filing for months. The commission is expected to make a decision within about two months, unless the process gets delayed again. It formally has about a month to respond.
The telcos have said the joint venture would be open to do business with all other mobile operators and service providers in the UK. But the proposal has drawn the ire of smaller UK network operator Three, or Hutchison 3G UK, which was not invited to be a shareholding member of the group. It continues to oppose the initiative.
A rejection of the proposal by regulators would also cast doubt on joint venture plans led by telcos in at least four EU countries, Germany, Sweden, Denmark and Hungary, to form their own companies to develop platforms for rolling out NFC mobile wallets. The platforms could include jointly hiring a trusted service manager to manage secure applications in the phones.
UPDATE: In addition, major Dutch telcos and banks have been in discussions with Brussels to form a joint venture for rolling out NFC services and plan to submit a formal application soon. END UPDATE. The initiative, known as Sixpack, has sustained its own delays because of regulatory issues.
The consortium, code-named Travik, announced the plans in September 2010, with members projecting they would launch NFC services this year. They had originally thought they only needed approval from domestic antitrust authorities, but they later determined they would have to seek approval from the European Commission.
That caused the group to move back the projected NFC launch date to early 2013.
One of the original partners, T-Mobile Netherlands, dropped out of the group. Major Dutch operators KPN and Vodafone Netherlands, as well as banks, ABN Amro, ING and Rabobank, have said they remain committed to the project.
The proposed European joint ventures, like their counterpart in the United States, Isis, formed by Verizon Wireless, AT&T and T-Mobile USA, would not deal directly with consumers, but would offer services to their owner operators and other telcos and service providers on a B2B basis.
UK telcos said they would each roll out their own branded mobile wallets. They have described the joint venture as a company that could offer a “one-stop shop” for mobile advertising, payment, ticketing and other services for the wallets.
The telcos plan to use SIM cards as the secure elements in the NFC phones they sell. They would rent space on the cards to banks and other service providers.
And they would divvy up the revenue based on the coupons and advertising they deliver to consumers, who would have to opt in to receive the offers.