Have we missed the boat - again?

Have we missed the boat - again?

Tony Poulos  |   June 24, 2011
Telecom Asia

It is becoming increasingly evident that the telecom industry, particularly the mobile sector, is under severe revenue threat from many quarters, including itself. Despite constant technology advances, it seems incapable of warding off external marauders as a united force.

The latest news to send shivers down the collective mobile industry spine is that Google has joined forces with Citi and MasterCard to embed NFC capability into its Android powered Nexus S handset. Google is conducting field trials of what has been dubbed the Google Wallet mobile payment system that will be launched commercially in selected US markets this summer. (See related article "Google Wallet takes NFC to the next level")

Initially the service will be available to Sprint network customers. Payments can be made via Citi issued MasterCards or a Google prepaid card that can be topped up from any other credit card. Announced retail merchant partners include American Eagle, Macy's, Walgreens, Toys R Us and Subway, which will be able to send offers to users of the services, including location-based offers, where customers have given permission.

Sprint claims that its role is to provide a "bridge" to OEMs to expand the service onto other handsets, but there has been no mention of what, if any, revenue will be generated from the financial transactions themselves. This has been the single biggest stumbling block over the last decade that credit card companies, card issuing banks and telcos have failed to overcome.

Bypassing the telco

By embedding the security into the handset and not the SIM, as it seems has happened, there is little reason to involve the mobile operators at all - even less to share revenues with them. This is not to say some individual partnerships have not already happened and grown around the globe between the above-mentioned parties. It's just that an industry-wide initiative has again failed to materialize, despite GSMA efforts and the ill-fated Isis payments financial network backed by Verizon Wireless, AT&T and T-Mobile. The chinks in the mobile castle walls have been once again breached by a feared OTT player.

Not satisfied with potentially "disrupting" the mobile industry's dream of becoming a mobile payments powerhouse, Google has also made it clear that the system will one day be about more than just m-commerce, suggesting that its wallet will be able to carry the user's driving license, health card information, hotel keycards, boarding passes and more. What next, embedding a Google chip somewhere on our person that will act as a unique identity confirmation and passport replacement?

Watch the best moments from the 5th Annual Telecom Asia Readers' Choice Awards


Frontpage Content by Category with Image

Researchers at the University of Mississippi have applied for a patent for the prosthetic device
Telecomasia.net full website

© 2012 Questex Asia Ltd., a Questex Media Group company. All rights reserved. Reproduction in whole or in part is prohibited. Please send any technical comments or questions to our webmaster.