Tube mobile coverage to miss Olympics deadline

But mobile wallets get Olympic lift with Samsung and Visa NFC deal...

London 2012 Olympic Games to give mobile wallets a leg-up but don't expect a mobile signal on Tube trainsPhoto: Andy Miah

Contactless mobile wallets look set to be given a leg-up by the London 2012 Olympic Games but the race to get mobile phone coverage on the London Underground in time for the games has once again hit the buffers.

Yesterday mobile maker Samsung and payments company Visa announced a strategic alliance to boost the use of contactless mobile payments in the UK in time for the Olympics. Contactless payments use near-field communications (NFC) - a short-range wireless comms technology that enables transactions such as payments and ticketing to be made with a mobile handset simply by waving it over a compatible reader.

The pair committed to launching a mobile wallet handset loaded with a Visa contactless payment app in time for the games. The handset will be given to Samsung- and Visa-sponsored athletes taking part in the games but will also go on sale to UK consumers.

It's not the first time Samsung and Visa have worked together on mobile wallets. Last year the companies were involved in a mobile payments trial in the Spanish city of Sitges. At the time, Visa tipped the 2012 London Olympic Games as a key date for mobile wallet use to grow in the UK.

But while more mobile wallets look likely to be in use by the London 2012 Olympics, mobile users will still be unable to get mobile coverage on London Underground Tube trains and in deep tunnels.

Last month The Sunday Times reported that Transport for London (TfL) was close to a deal with operators and suppliers to push out Tube mobile phone coverage by 2012. But today TfL said the chance of a deal in time for the Olympics has been derailed - not for the first time.

"The Mayor and TfL made it clear that, given the financial pressures on TfL's budgets, any solution would have to be funded...

...through mobile operators with no cost to fare or taxpayers. The parties were not able to agree a viable proposal and the project is therefore not progressed at this time," a TfL statement said.

However, Tube users should be able to hope for wi-fi at some of the London Underground stations by the Olympics - as TfL is currently inviting tenders for providers to extend wi-fi to up to 120 stations on the network by June 2012.

Millions of NFC mobiles to ship in 2011

Analyst house Forrester Research predicts millions of NFC-enabled mobile devices will ship globally in 2011 from a number of big mobile makers at various prices and in various form factors. In a report on mobile payments, Mobile payments enter a disruptive phase, Forrester noted that several mobile makers will ship between 40 and 50 million contactless handsets this year.

This level of volume will help mobile makers reduce the cost of adding NFC chips to handsets, said Forrester, and drive contactless adoption in countries such as the UK and US where contactless point-of-sale readers are already present.

NFC and mobile payments systems that utilise the mobile network, such as PayPal Mobile and operator billing, still face lots of challenges to gaining mass-market adoption, according to Forrester - not least having to compete with the range of existing payment methods consumers can use. M-payments must provide "a clear improvement over existing payment methods", said Thomas Husson, report author and Forrester analyst, in the report.

NFC has another big challenge. The number of merchants that will accept contactless payments must also increase if NFC is to become a mainstream payment method. "Consumers won't adopt a payments system until a wide range of merchants accept it," Husson said.

In recent months, the mobile industry has also been awash with rumours that Apple plans to add an NFC chip to the next iteration of its iPhone smartphone. Google is already pushing NFC on its Android mobile platform - with the first NFC-enabled Android device, the Google-branded Samsung-made Nexus S handset, launching last year. There are signs the Android maker plans to ramp up its NFC involvement this year too.

The not-for-profit NFC Forum, which develops specifications and standards for NFC, yesterday announced Google has joined as a principal member - its second highest membership level. Existing member Intel also raised its membership status from associate to principal, while 31 other new members also signed up to the forum, including tech company Hitachi and car maker Daimler.