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Deutsche Telekom is gearing up to offer NFC services in four of its major European markets, including Germany, NFC Times has learned.

The Germany-based telco, one of the largest mobile-operator groups in Europe, is seeking to build a centralized system that would enable it to deliver payment and other NFC applications to SIM cards in subscribers’ phones, sources with knowledge of the telco’s plans told NFC Times.

The initiative, which Deutsche Telekom calls its Mobile Wallet Program, would introduce the services to subscribers in its flagship German market, along with its branch operators in Poland, the Czech Republic and the Netherlands. Together the operators had nearly 60 million subscribers as of the end of the September.

Deutsche Telekom sees the four markets as the most promising for NFC in the group outside of the United States and United Kingdom. The telco’s T-Mobile USA unit is part of a joint venture formed with two larger U.S. mobile carriers Verizon and AT&T, which plans to launch NFC services within 18 months. T-Mobile UK is part of the Everything Everywhere joint venture with Orange UK, which is expected to launch an NFC rollout in coming months. 

It’s not clear when Deutsche Telekom hopes to launch the NFC services in the four markets on the Continent, but 2012 is likely, said sources. Besides payment, the telco plans to enable transit ticketing and loyalty applications, among others. Deutsche Telekom did not respond to a request by NFC Times for comment.

The telco’s plans are more evidence that NFC is fast becoming a market reality. Last week, the U.S. telco joint venture announced its plans to build an NFC-based mobile-commerce network called Isis. Chief executives of Google and Research in Motion also disclosed plans to adopt NFC for their respective mobile platforms or handsets, Android and BlackBerry. And the Singaporean government in the same week released a request for tenders for its planned national trusted service manager.

Looking for a TSM
Among the pieces Deutsche Telekom is putting in place to enable its branches to offer NFC wallet services is the hiring of a trusted service manager, or TSM, to download, provision and manage applications. That hiring process is going on now, sources said. Deutsche Telekom is believed to be the first telco group to seek to retain a TSM or license a TSM platform at the group level. While the U.S., French and British telcos have hired TSMs, the contracts have been for national rollouts or precommercial launches, not to serve international groups.

Deutsche Telekom wants to enable consumers to use a Web interface to build their mobile wallets, including requesting services and activating and deactivating applications, NFC Times has learned.

It’s unclear whether the telco intends to run the TSM in-house using a platform from one of the established TSM vendors or to outsource the service. It seems likely the telco would run much of it in-house.

The four Deutsche Telekom operators: its flagship carrier in Germany, PTC in Poland, T-Mobile Czech Republic and T-Mobile Netherlands, would share the TSM platform, said sources. This would include handling payment applications from banks and also applications the operators provide themselves. It remains to be seen whether the operators would introduce any payment applications of their own. As NFC Times reported in October, Deutsche Telekom joined the mpass consortium formed earlier by Vodafone Germany and O2 Germany, which launched its own payment scheme for Web purchases. The group plans a test of payment with contactless stickers at the physical point of sale in 2011. That application could later move to NFC phones.

The T-Mobile carriers have not been very active in NFC trials to date, though Deutsche Telekom’s German operator joined an NFC ticketing trial called Touch&Travel launched by rival telco Vodafone Germany in early 2008.

Deutsche Telekom had just under 35 million subscribers in Germany at the end of September, but contactless terminals, especially for retail payment, are virtually nonexistent in the country. Contactless payment is rolling out in Poland, however, where PTC, which operates under the Era brand, has 13.3 million customers.

While the Deutsche Telekom mobile operators plan to share the TSM platform to deliver NFC services to their subscribers, the platform would have to tie into local systems. For example, Poland’s PTC has its own platform for managing SIM cards over the air. And T-Mobile Netherlands is part of another NFC group, dubbed the "Six Pack," made up of the three largest Dutch telcos and banks. This group, which plans to launch NFC services in 2012, is expected to hire its own TSM, which would have to interface with the Deutsche Telekom TSM. T-Mobile Netherlands had 4.5 million subscribers at the end of the third quarter.

Services on the SIM
Deutsche Telekom is also expected to order NFC phones as a group. The telco would probably insist on phones that support the standard single-wire protocol, or SWP, connection between the NFC chip and SIM card. This would enable the NFC applications to be stored on the SIM. Handset makers are expected to start introducing NFC models next year, and many or most will support SWP. But a high percentage will also come with embedded chips that could store applications and might be out of the control of telcos.

Deutsche Telekom also wants at least some of its NFC-enabled SIMs to support smart card Web server, or SCWS, NFC Times has learned. The software enables operators to put a Web-like user interface on the SIM card itself for mobile apps. This and the single-wire protocol would tie the telcos closer to customers.

While Deutsche Telekom’s business model for NFC has yet to be revealed, the telco and its branch operators are expected to try to charge service providers fees for loading their applications onto SIMs and maintaining them there, as well as SIM rental fees. The carriers or service providers might also seek to charge subscribers fees for certain NFC services.