The three in NFC JV need to welcome 3 to succeed

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The three largest mobile phone operators in the UK have joined forces to develop the technology that effectively places the contents of your pockets or handbag – your wallet, travel cards and keys – into your mobile phone.

The joint venture (JV) claims its formation will make it easier for advertisers, who currently have to visit each operator individually to book space on mobile, to conduct m-commerce campaigns. Soon they will be able to call up a “one stop shop” and reach an audience of millions or a targeted demographic, across all three networks, to run campaigns around ticketing, discounting, display on the the mobile wallet application and more.

But rival network Three is standing at the side of the NFC (near field communications) playground, arms firmly crossed, after being left out of the game. Three was not even the unfortunate child, last to be picked for the football team – the company was simply never invited to play.

Kevin Russell, Three’s chief executive, said: “We would want and expect to be at the heart of a cross-industry development like this and are more than a little concerned that, as a core competitor, we have been excluded.”

Three was one of the first operators in the UK to explore the mobile internet space and promote internet-ready tarrifs, but has never had the scale to compete with its “big three” rivals, Everything Everywhere, O2 and Vodafone. It doesn’t take a genius to summise that Three’s lack of muscle is likely to be the reason it was excluded from the initial announcement this week.

The chief executives of all the companies in the JV were quick to scupper claims that Three had been deliberately left out of the process.

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Ronan Dunne, O2 UK CEO, says the venture is “an open vehicle” and that Kevin Russell is welcome to become a customer. The new operation claims to be “open for business” and the JV partners say they would be happy to join forces with any company, from other mobile operators to Facebook and Google.

The JV has not yet been approved by the competition authorities and it faces tough scrutiny from Competition Commission because, on the face of it, O2, Everything Everywhere and Vodafone could look as though they were creating a monopoly over NFC in the UK. You want NFC? Go to the JV.

The choice over who comes to join the JV gang is, presumably, down to the initial three companies involved, who each have an equal one-third equity share. The JV is likely to welcome on board big players such as Google and Facebook, should they be interested, but who might it say “no” to?

The issue with launching a “standardised platform” is that “standardised” also could be deemed as “closed”.

When Apple launched the iPhone in 2007, developers were quick to take up the new opportunity and created apps, carefully adhering to the structured Apple system and its guidelines.

Now, four years later, and despite the launch of competitor operating systems, many of these developers still operate an Apple-first policy. Apple was first to market, it demands certain qualities of apps, so some developers are shy – or slow – to migrate to other platforms, despite the extra opportunities they can offer.

The Apple model works perfectly for Apple, but, at least initially, it made it difficult for other companies in the market to compete and convince advertisers and consumers there were other options available.

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If the JV adheres to an open approach, similar to that of the Android model, allowing other developers, operators and advertisers to get involved and use and adapt its technology, it is likely to be approved by the competition authorities.

But most importantly, the open approach will ensure that the JV is actually of a benefit to the NFC market in the UK, rather than creating a two-tier system that confuses advertisers and consumers out of the space altogether.

The launch the JV will no doubt further fuel the interest in m-commerce and the opportunities it can bring to advertisers, retailers, banks and consumers. The fact that brands now have just one number to ring, rather than three, when enquiring about ad space is one of the clear bonsues.

If the JV actually goes through with its “open for business” policy, inviting other operators on board and not sticking to rigid legislation that makes the platform difficult to be adapted, it will prompt an acceleration of NFC technology at the pace it needs to be at to satisfy the growing consumer and advertiser demand.

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