Hungary Launches NFC Group to Coordinate Rollouts

Jul 27 2011

Hungary is the latest country in which mobile operators and other players plan to coordinate their rollouts of NFC services.

Hungary’s three mobile operators, its largest commercial bank, and a local loyalty program operator, along with MasterCard Worldwide, have formed a group to set technical standards and other measures to smooth commercial launches of NFC, which would begin in 2012, it was announced today.

Magyar Telekom, which is part of Germany’s Deutsche Telekom group, Telenor Hungary and Vodafone Hungary said they would form the Hungarian Mobile Wallet Association with OTP Bank, MasterCard and loyalty system provider SuperShop. The plan calls for setting technical standards for NFC wallets and services, likely including rules for how NFC-based mobile-payment and other transactions are conducted. There also would probably be a joint consumer education program.

A spokesperson for the group was not immediately available, but if it is like other groups formed in Europe among telcos to coordinate NFC rollouts, the Hungarian wallet association will likely require that SIM cards the telcos issue be used to store payment and other secure applications. The group might also hire a single trusted service manager to handle all downloads and management of the applications on the SIMs.

Hungary follows such countries as France, the Netherlands, the United States, the United Kingdom and Denmark, in which telcos and in some cases banks and other service providers have announced associations or more formal joint ventures to prepare for NFC rollouts. The groups are building interoperable platforms for mobile wallets and over-the-air provisioning and management of applications.

Telcos in other countries, including Germany and Taiwan, have also met to discuss forming associations or joint ventures for NFC, NFC Times has learned.

The groups believe that interoperable wallets and platforms to store and deliver applications to users will help avoid fragmentation as NFC gets rolled out throughout their various markets.

Telcos appear to be the driving force behind formation of these groups. The operators hope to create an environment in which they can charge fees for hosting and managing applications on the NFC-enabled SIMs they issue to subscribers and also to earn revenue for such content as coupons and other offers they deliver over their networks.

The operators fear they will be cut out of NFC revenue by new mobile-commerce players, such as search giant Google and big handset makers, as well as by banks acting alone.

In some of the countries, such as the United States with the Isis joint venture, and the United Kingdom and Denmark, the groups have been formed only among telcos. Others involve banks, such as in the Netherlands, where the country’s three major telcos and three largest banks have formed a joint venture.

Mobile operators also appear to be leading the Hungarian Mobile Wallet Association. Magyar Telekom, also known as T-Mobile Hungary, the largest telco in the Central European nation of 10 million, in its announcement today said that, “this united move of Hungary's MNOs (mobile network operators) may ensure that Hungary will be among the first countries where mobile NFC services may be launched in Europe.”

The other telcos in the group, Telenor Hungary and Vodafone Hungary, also belong to large Europe-based mobile operator groups. Telenor’s Danish branch is involved in a joint venture announced in June in Denmark. Vodafone UK is part of a planned joint venture among major UK telcos, also announced in June. The shareholders of both JVs would only be telcos, according to the plans.

But the Hungarian group appears to be a less-formal association. The announcement today stated the Hungarian telcos would work “arm-in-arm” with OTP Bank, MasterCard and SuperShop.

Update: The announcement indicated the telcos would launch NFC commercially next year following trials this year. A report says that Magyar Telekom plans to launch an NFC trial in the city of Szolnok late this month, as part of the Future Store project of the telco’s T-City program. The telco last year tested use of Bluetooth technology to enable subscribers to download coupons and information in grocery stories in Szolnok participating in the program. End update.

To date, Hungarian carriers have held no high-profile NFC trials and the contactless infrastructure in the country is sparse, with only about 1,000 PayPass terminals in the country. OTP Bank reportedly launched contactless payment on cards last year.



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