Optical/IP Networks

US Wireless Operators Spend Big on mCommerce

AT&T Inc. (NYSE: T), Verizon Wireless and T-Mobile US Inc. are reportedly committing to invest a combined $100 million in Isis , their joint venture to spread Near-Field Communications (NFC) in the U.S.

Bloomberg reported the funding late Sunday, citing sources that say the total amount will come down to how successful Isis is at attracting banks and merchants.

The JV currently works with Visa, MasterCard and American Express, in addition to its founding partners, Barclays Bank and Discover. (See Isis Adds Four Credit Cards to Its Mobile Wallet.)

Why this matters
The operators' level of investment in NFC shows how much potential they see in contactless transactions, but it also suggests how stiff the competition is becoming. Isis is up against Google (Nasdaq: GOOG)'s Wallet mobile payment service, which Sprint Corp. (NYSE: S) is supporting, and a number of well-funded, agile startups like Square Inc. (See Google Taps Sprint for Tap-to-Pay.)

Isis is later to market than its rivals too. It plans to launch its mobile payment, couponing and loyalty program in select markets in early to mid-2012, while Google has had mobile payments in trial markets since May. The entire market in the U.S., however, has been slow to get off the ground as business model and revenue-sharing issues are worked through. (See Who's Holding Up NFC?)

Samsung Corp. , Nokia Corp. (NYSE: NOK), High Tech Computer Corp. (HTC) (Taiwan: 2498), Motorola Mobility LLC and BlackBerry are among the handset makers planning phones with NFC built in. The wireless operators hope to leverage their distribution power to encourage vendors to adopt the tech in more phones, as well as embed the Isis software in them. (See Samsung & Nokia Push Midrange Smartphones, RIM Revamps the BlackBerry and Here Come the NFC Phones.)

For more
Read up on NFC and mCommerce in the U.S. below.

— Sarah Reedy, Senior Reporter, Light Reading Mobile

sarahthomas1011 12/5/2012 | 4:55:13 PM
re: US Wireless Operators Spend Big on mCommerce

Even if $100 million isn't spot on, I expect the operators to pump lots of funding into NFC. It's going to take a big investment in to build this market in the U.S., get consumers interested in using their phone for payments and convincing them it's safe and secure.

sarahthomas1011 12/5/2012 | 4:55:11 PM
re: US Wireless Operators Spend Big on mCommerce

For the record, Isis isn't commenting on the level of funding from the carriers. A spokeswoman only reiterated that it's on track to launch early to mid-next year.

modelportfolio2003 12/5/2012 | 4:55:10 PM
re: US Wireless Operators Spend Big on mCommerce



How do you see the eventual field of players for NFC activated devices panning out?  Will Google Wallet be the last one standing or do you see the field big enough for many players to all prosper?  

sarahthomas1011 12/5/2012 | 4:55:09 PM
re: US Wireless Operators Spend Big on mCommerce

I think NFC chips in smartphones will start to be the norm, but that may take a few years to pan out. Pyramid Research has good projections on that here.

As for the market for companies with services using NFC, that will likely winnow down to a few players, definitely including Google, and then niche services, perhaps unrelated to commerce, but for games, coupons and media sharing.

The operators should be well placed in this market given that they own the distribution channel and subscriber relationship, but they also aren't moving as quickly as some of the other players.


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