Operators team up for mobile wallet venture

The UK's biggest cellular operators have teamed up to create a single m-commerce system to let customers pay for goods using their mobile phones, and to let companies offer deals and coupons to those customers.

The UK's biggest cellular operators have teamed up to create a single m-commerce system to let customers pay for goods using their mobile phones. Photo credit: Orange

Everything Everywhere, Telefonica UK (O2) and Vodafone UK announced the new joint venture on Thursday, saying it will provide a single clearing house for advertisers, retailers and banks who want to reach phone users. Customers will be able to pay for goods and services by swiping phones equipped with near-field communication (NFC) chips across readers, or by using the mobile internet.

"The benefits will be felt across the whole industry, allowing people to manage their money and make payments using their handsets, helping advertisers reach their customers on the move, and helping banks provide their clients with an easy and convenient way of making payments," Everything Everywhere chief executive Tom Alexander said in a statement.

Ronan Dunne, chief executive of Telefonica UK, said in the statement that the mobile marketing and payments market is "extremely fragmented" at the moment. The joint venture will allow consumers to benefit from new services and help businesses "reach a vastly increased audience, utilising a single platform for sales, delivery and payment", he argued.

Three-free

The companies said the joint venture will be "open and available to all industry participants", but the operator Three was conspicuously missing from the founding line-up.

Three's chief executive Kevin Russell described the joint venture as a good move, but said his company would have wanted to be "at the heart of a cross-industry development like this" and was "more than a little concerned" at being excluded.

"This morning was the first we'd heard of it," a Three spokesman told ZDNet UK on Thursday. "Three has concerns about the competition implications."

Indeed, the joint venture will have to gain clearance from the European Commission, the Office of Fair Trading and Ofcom before launching, which the operators hope to achieve before the end of the year.

Explaining Three's exclusion from the deal, an O2 spokeswoman said that "it is felt that Telefonica UK, Everything Everywhere and Vodafone were the right companies to bring into the full standalone [joint venture]". "We have brought together the three key businesses in the [joint venture] who can deliver a great experience quickly and make mobile media and the mobile wallet intrinsic to society very quickly," she said.

"To be clear, O2, Orange and Vodafone will all be 'customers' of the [joint venture] themselves. While Three has not been invited to be a full partner, it can of course become a customer of the [joint venture] and take white-labelled solutions and services from it. All customers will be on a level playing field," the spokeswoman told ZDNet UK.

Asked whether Three would have as much say as the other customers in the setting of the joint venture's market rates, O2's spokeswoman insisted the joint venture will be run separately from its parent companies.