Telefónica Invests in Payments Partner

10:30 AM -- Telefónica SA (NYSE: TEF) has opened up its corporate wallet to invest in mobile payments specialist Boku Inc. , which now becomes a preferred partner to the Spanish giant.

In doing so, the influential operator, which ended 2011 with almost 239 million mobile customers across 25 markets, has provided further evidence that the mobile payments sector is set to boom in 2012 and beyond, and further evidence that it has evolved its strategy beyond that of a traditional telco.

The carrier's recently formed Telefónica Digital division, which is developing the operator's mobile wallet strategy, has participated in a US$35 million funding round for Boku. And it's keeping good company, as fellow investors include New Enterprise Associates (NEA) , Andreessen Horowitz, Benchmark Capital , DAG Ventures Management , Index Ventures and Khosla Ventures .

And this isn't Telefónica Digital's first investment since its formation in September 2011. (See Telefónica Invests in Cloud Specialist Joyent, Telefonica Makes Strategic Investment in Quantenna and Telefonica Restructures, Creates New Units.)

The announcement comes just ahead of Telefónica's launch of mobile wallet services, which the operator has tested in London. The relationship may not come as a surprise to those that follow the payments specialist closely, as Boku already had a relationship with BlueVia, the part of Telefónica Digital that is working closely with the apps development community. In fact, it was Boku's technology that helped BlueVia onto the shortlist for Light Reading's Leading Lights Best New Service or App (Mobile) award last year. (See Telefonica Holds Key to Digital Model and Leading Lights Finalists: Best New Service or App (Mobile).)

It's clear that the operator wants the relationship to include co-development. "This investment and partnership gives us access to [Boku's] tools, infrastructure and know how, ideally complementing our own mobile payments expertise," said Telefónica Digital CEO Matthew Key in the press release issued today. "Working with Boku will allow us to both enhance our operator billing capabilities and the overall payment experience through our future mobile wallet services."

And it seems Boku, which has developed a platform that ties together mobile operators, customers and merchants to enable people to buy goods and services using their mobile account, is becoming a partner of choice for many major operators, as it already has agreements in place with mobile service providers in the U.S., France, Germany, the U.K. and South Korea. (See Boku Adds French Partners and Boku's Voodoo Coup .)

Telefónica Digital has gone that bit further, though, with its investment and closer ties. And that's what is setting the Spanish giant apart from a number of its major European peers at the moment: Having created a Digital division it is now behaving less like a traditional telecom operator and more like a digital technology/services firm, and that can only be good for its future. (See Telefónica to Hatch Startups .)

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— Ray Le Maistre, International Managing Editor, Light Reading

VoiceOnTelecom 12/5/2012 | 5:39:16 PM
re: Telefónica Invests in Payments Partner

I know Telefonica got into digital precisely because they saw the writing on the wall, so to speak.  But, still, I'm happy to see them sticking with it, even in the face of difficulties in their core markets.  Whether it be high definition video conferencing or going "telco-OTT" with Jajah, the company seems to be strategically in a very smart place.


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