UK operators join forces on mobile payments, ads

LONDON: Britain's top wireless carriers are creating a joint venture (JV) to speed up deployment of mobile payments and marketing, which will let shoppers pay with phones instead of cash or cards and also get coupons and advertising.

Orange-T-Mobile joint venture Everything Everywhere (DTEGn.DE), Vodafone and Telefonica's O2 said on Thursday they aimed to create a mobile commerce system bringing together retailers, banks and advertisers.

Momentum is growing for services that let shoppers purchase small items by tapping their phone against a reader at the till, supported by chains like McDonald's and Macy's and driven by new technology in Google Android phones.

Last month, Google, Mastercard, Citigroup, Sprint and First Data unveiled an m-commerce service to start in U.S. cities this summer.

Mobile payments are already widely used in Japan and South Korea, and in developing countries where many people do not have bank accounts.

“The mobile phone has become the one item people really cannot be without,” Guy Laurence, chief executive of Vodafone UK, said in a statement. “In the near future, people will now start leaving their wallet at home.”

The three operators did not immediately announce any partners in retail or banking, saying they first had to gain regulatory clearance and hoped to launch the venture before the end of the year.

Hutchison Whampoa's Three is the only operator that is not part of the venture in the UK, which is Europe's most developed market in terms of smartphones.

“We would want and expect to be at the heart of a cross-industry development like this and are more than a little concerned that -- as a core competitor -- we have been excluded from this joint venture,” Three UK's CEO Kevin Russell said.

NXP Semiconductors , the world's biggest maker of the NFC chips that enable the contactless payments, expects 20 NFC-enabled phone models to be on the market by the end of the year, driven by the fast-growing popularity of Android.

The UK operators also aim to provide a single point of contact for retailers and advertisers to deliver virtual loyalty cards, discount coupons and advertising.

The three CEOs told journalists on a call they had already had significant expressions of interest from advertisers

UK-based wireless research and analysis firm CCS Insight said, “Backing from financial institutions and retailers is crucial, and unified support for on-device advertising will increase its appeal.”

Orange has already launched a limited mobile payments scheme in Britain with Barclaycard.

The three operators said the joint venture would not affect plans that any one of the three had for independent services.

In Spain, Telefonica recently signed a deal to collaborate on NFC with Orange and Vodafone.