U.S. Mobile Operator Sprint Plans to Launch NFC

Apr 5 2011

Sprint, the third largest U.S. mobile carrier, is planning to launch NFC services before the end of the year, a spokeswoman for the telco confirmed to NFC Times.

The Sprint service would eventually compete with the Isis joint venture led by Sprint’s much larger rivals, AT&T and Verizon Wireless. But Sprint does not plan to launch its own payment service or brand, as Isis does, according to Sprint vice president of product platforms Kevin McGinnis, as quoted in a Bloomberg news service story today.

"We intend to make this an open solution, where consumers can use their phone in a variety of physical locations," McGinnis was quoted as saying. "Because we’re allowing other brands and other institutions to participate, they can also tell their consumers that this is available on Sprint."

The spokeswoman told NFC Times the telco expects to be ready to launch before the end of the year. "We are actively talking with others in the mobile-payment ecosystem to make that happen in 2011," she said.

Sprint would apparently open its NFC-enabled wallet to such brands as Visa and MasterCard Worldwide, which could bring in their banking customers to issue Visa payWave or MasterCard PayPass applications, respectively. The telco would not make money on transaction fees, but by sharing revenue from targeted advertising and coupons, suggested McGinnis, according to the article. There were few other details available.

There had been some rumblings recently that Sprint would push forward by itself with an NFC-based mobile wallet, after it had dropped out last spring or winter of what would become the Isis joint venture, as NFC Times reported. Sprint had been a lead partner in the planning of Isis, but there was speculation it decided it couldn’t afford to invest capital in the venture while dealing with sustained subscriber losses.

With AT&T’s proposed acquisition of T-Mobile USA, which is also a part of the Isis JV, Sprint would rank an even more distant third among national carriers than it does now. While Sprint might believe it could attract new subscribers with novel NFC services, it would likely be difficult to get customers of other mobile operators to switch to Sprint just to use NFC payment, couponing, social networking and related services.

And besides the competing offer from Isis, there will be other NFC mobile wallets. That includes a high-profile initiative from Google, which also wants to share in advertising revenue and would open the wallet to brands such as MasterCard and banks such as Citigroup.

Isis, which plans to launch NFC services in 2012, has been stressing of late that its wallets will be open to a variety of service providers and banks.

Update: Isis, in announcing the location of its first pilot, Salt Lake City, Utah, also said late Monday that it would also be open to other payment networks. The joint venture is partnering with Discover Financial Services to use Discover’s retail network, and its first banking partner is Barclaycard US, a small credit card issuer stateside. It remains to be seen, however, whether the Isis brand would co-exist in the same wallet with accounts branded Visa or MasterCard, which will be direct competitors.

"Personally, I reckon Sprint needs to be in on the Isis roster, and Isis needs to open up to Visa and MasterCard," Nick Holland, senior analyst at U.S.-based Yankee Group told NFC Times. "Could be we are on the cusp of a really unpleasant end-user experience with so many separate players trying to shape the NFC landscape and their slice of it." End update

The main line of attack from the major card schemes so far has been to paint Isis as a closed payment service.

"For us, mobile payment is really about consumers using the accounts they have, from the banks they trust, in the devices that they love," said Dave Wentker, head of mobile product development at Visa Inc., in an obvious reference to Isis. He was speaking last month during a conference at the International CTIA Wireless trade show in Orlando. He added: "We expect there to be a lot of Visa products in those (other) wallets."

Whether that turns out to include a Sprint wallet remains to be seen. Visa has been keeping a low profile on its plans for full NFC phones. 

It’s not clear how many new NFC phones will be available by the end of the year. Some Android handset makers, including Samsung, HTC and LG Electronics, are expected to have NFC models out this year. So will Research in Motion with perhaps several NFC-enabled BlackBerrys. Nokia plans to have more Symbian smartphones on the market this year, and later is expected to introduce Nokia Windows Phone models supporting NFC. That is in addition to the Nexus S Android smartphone from Google, which is manufactured by Samsung.

The number of merchants accepting contactless payment from either cards or NFC phones will also be a challenge for the backers of the Sprint wallet and others wallets. Fewer than 3% of merchants accepting conventional cards are equipped to accept contactless in the United States.

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