Telcos to gain from Korea-Japan NFC deal

Last week’s announcement of SK Telecom’s NFC trial partnership with KDDI and Softbank is expected to contribute significantly to the development of Korea’s NFC marketplace.

 

If successful, the partnership should be largely lucrative for Korea’s operators, Ovum analyst William Lee said.

 

The collaboration aims to ensure Japanese tourists in South Korea are able to use their NFC enabled handsets to make mobile payments, and vice versa.

 

The NFC payment space has been burgeoning in Korea, with Korea Telecom’s launch of a Samsung branded NFC handset that allows users to store credit card information, acquire promotional retail coupons and pay for transportation. Plans are underway for NFC to be extended to IPTV set-top boxes, home appliances and vending machines.

 

SK Telecom itself had launched an NFC payment based shopping service in late October last year to cover the greater Seoul region.

 

Challenges for the market exist, however, in the form of compatibility issues between NFC readers and the currently limited range of NFC-enabled handsets, says Lee.

 

Demand for NFC payments can be viewed in correlation to Korea’s e-commerce market, he added, and that is one space that has seen rapid growth. Ovum’s research showed the country’s e-commerce market has expanded quickly at a rate of 15% per year to hit 24 trillion Won ($21.36 billion) in 2010.