To NFC or not, is that a SIM card question?

The SIM card could very well be the ideal home base for the near-field communication wireless standard, according to some industry observers.
Written by Farihan Bahrin, Contributor

While most players in the mobile phone industry would agree that near-field communication is an up-and-coming technology, some remain divided over how it should be deployed.

Near-field communication (NFC) is a short-range wireless connectivity technology, commonly deployed in the form of a radio frequency identification (RFID) chip and embedded in handsets such as mobile phones.

NFC allows these devices to function as mobile wallets for cashless transactions, and has been deployed in several countries worldwide. Wireless carriers in Japan, the United States and Malaysia, for instance, have reported successful NFC trials.

Handset makers such as Nokia, have also been pro-active in pushing the technology in their products. The Finnish company recently launched NFC-enabled cell phones, Nokia 5140 and the Nokia 6131, to securely run wireless payments and other applications.

But mobile operators, it seems, have other ideas on how NFC should be implemented in mobile phones. Recent reports indicate that some operators are calling for NFC applications to be installed directly into a SIM card instead.

Singapore operator Mobile One (M1), for instance, has been keeping track of NFC developments with great interest. According to its CEO Neil Montefiore, installing the technology directly onto the SIM card represents a logical step for the industry as it benefits not just the mobile operators, but end-users and handset makers as well.

"At this point, our inclination is toward putting NFC applications on the SIM card," Montefiore said in an e-mail interview. "[It makes the technology] less phone-dependent, and subscribers can enjoy the flexibility of switching phones without any interruption to their NFC applications and services."

He added that while M1 will continue to maintain a close watch on NFC developments, it currently has no intentions of conducting NFC trials.

According to Flint Pulskamp, an analyst at research house IDC, how NFC is implemented depends on the regional carrier, device manufacturer and air interface technology employed by the carrier.

For GSM network environments, the most logical deployment could be a SIM card-centric approach, Pulskamp explained in an e-mail interview. "But for CDMA interfaces, the solution would be [delivered] via secure memory cards or embedded in a smart card chip," he said.

He predicted that, by 2010, 2 percent of the global mobile phone shipment will consist of NFC-enabled models.

A matter of standardization
Gerhard Romen, head of Nokia's NFC market development, told ZDNet Asia in an e-mail interview that most handset vendors are choosing to store NFC-based applications within the phone itself because "at the moment, there is no standardized interface on the SIM card to place a secure chip."

Romen cited the lack of a secure interface as one of the reasons why Nokia today puts NFC applications directly into its current batch of NFC-enabled phones.

"There are technically three basic possibilities to place a secure chip: integrate [it] into the phone, in a memory card or in a SIM card," he explained.

"Nokia decided on implementing [NFC] into the Nokia 6131 because putting it on a non-standard SIM would create a legacy issue," he said, noting that a SIM card typically has a shelf-life of up to eight years. The life cycle of a mobile phone is shorter in comparison, so applications--if built into the handset--can easily be ported to the new standard, he said.

Jeroen Keunen, regional marketing manager, business unit automotive and identification at NXP Semiconductors, said the issue of standardization would likely be resolved once a proper ecosystem for NFC technology has been established.

"The main issue facing chipmakers now lies in working with public transport authorities, telecom operators, financial organizations--and the like--to build up the appropriate ecosystem infrastructure that ties all of these services together," said Keunen in an e-mail.

He noted that once this framework is in place, the type of NFC services offered will be more attractive to consumers on a wide scale.

NXP plans to make NFC in SIM cards a reality by voicing support for a rival standard to gain industry acceptance, Keunen said.

"NXP has decided to actively contribute to the further specification of the existing Single Wire Protocol (SWP), ensuring that SWP becomes a standard compatible with widespread payment and contactless infrastructure," he said. A protocol developed by NXP's rival SIM manufacturer Gemalto, SWP focuses on delivering secure connection between the NFC chip and SIM card via a single electrical wire.

"We expect the majority of NFC mobile phone applications, such as payment and ticketing, to be based on the SIM card," Kuenen said.

Nokia's Romen said he is also open to the idea of using SIM cards to store NFC applications, but noted: "Nokia sees no reason why secure chips cannot be in the SIM card as well, as soon as standardization is resolved."

He added that Nokia and other members of the NFC Forum will continue to work and establish rules to ensure interoperability and compliance with the NFC standard.

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