The wallet will ultimately act as a container for multiple payment technologies

Financial services firm Visa Europe has said it will launch the V.me digital wallet on a controlled basis in the UK, France and Spain in the autumn of 2012.

The service will be made available through Visa’s member banks and will initially be accessed through the web browser on a PC, laptop, tablet or smartphone. The wallet will ultimately act as a container for multiple payment technologies, including virtual credit cards. Consumers will be able to put multiple cards into the wallet as well as technologies to make payments face-to-face, online or in a mobile environment.

Payments processor WorldPay has also been signed up as a key development partner in the delivery of the V.me service in the UK, to provide commercial and propositional insights to meet retailer needs and expectations.

Mariano Dima, executive VP of product and marketing solutions at Visa Europe, said: “V.me sits at the heart of Visa’s future of payments. For the first time, consumers and retailers will have a streamlined online checkout experience through an acceptance mark that offers industry-leading security and, when a Visa card is used in a V.me wallet, the same protection and rights that come with any Visa card transaction.

E-commerce currently represents 22 per cent of Visa Europe’s transactions and grew 44 per cent between 2009 and 2011.

Telecoms.com recently interviewed Visa’s global head of mobile, Bill Gajda, who spoke about how the mobile industry is looking to use the existing global, scalable, interoperable, secure rails that Visa, Mastercard and a few other companies supply, to extend the reach of mobile financial services.

Last week UK operator O2 launched its own mobile wallet offering.

Currently, it looks more like it’s trying to compete with the Pingit mobile money transfer service that UK bank Barclays launched in February. O2 Wallet is also an evolution of the O2 Money prepaid card launched in 2009 – which is now incorporated into the new service.

Will O2 Wallet be successful? It has a greater chance of success than mobile payment services solely focused on NFC. But O2 faces the same challenges that all other telcos face when competing against so-called over-the-top players – global online companies such as PayPal and Google that have greater geographic reach, brand appeal and agility.

O2 is part of an alliance with other UK operators – Vodafone and Everything Everywhere (Orange and T-Mobile) – to set up a joint m-commerce offering in the UK, to more effectively compete against OTT players. But the alliance has already ran into regulatory resistance, highlighting the difficulties that telcos face in trying to band together without appearing to be anti-competitive.

The O2 Wallet home screen

Telefónica subsidiary O2 has become the first operator in the UK market to launch a mobile wallet offering. The service offers price comparison for online shopping, person to person money transfer and allows the user to digitise cards linked to existing bank accounts, or load money onto an O2 stored value account.

The service is available as an app for iOS, Android and RIM devices but has not been optimised for the iPad, and is not available for Windows Phone. Mobile and desktop web versions of the service are also on offer. James Le Brocq, managing director of O2 Money said that the absence of a WP version of the app was  a resource issue and that there was “finite capital” available for development.

Le Brocq categorised the service as “e-commerce on a mobile”, with O2 planning to deploy a contactless payment element to the service at some point in the future.

O2 is establishing partnerships with the UK’s top 120 online retailers (with offers from four available at launch) and will charge those retailers a per transaction fee, a strategy that Fred Huet of Greenwhich Consulting described as “cleverly devised”.

P2P money transfer will be free for an initial six-month period but O2 is considering a £0.15 transaction fee thereafter. The solution allows users to share details of P2P transactions on social networking sites, which Le Brocq suggested would help drive awareness and uptake of the service.

This will be crucial in helping O2 meet one of its goals for the service, which is to drive uptake among users of competitor mobile networks. O2 has stolen a march on the other UK operators, as their proposed mobile money joint venture, Project Oscar, undergoes an “in-depth” investigation by the EC over possible contravention of merger regulations.

Earlier this month the EC said that its initial investigation “revealed that the joint venture and its three parent companies [O2, Everything Everywhere and Vodafone] may have the technical and commercial ability and incentive to block future competitors from offering their own mobile wallet services to customers in the UK, or to degrade the quality of these competing mobile wallets so that they become less attractive.”

Asked about this at the launch of O2 Wallet, Le Brocq dismissed the possibility that the EC’s investigation might prove to be a significant obstacle for Oscar, and said that the project was simply “awaiting approval”. He said that O2’s Wallet did not reflect any internal concern about Oscar’s realisation.

But Ovum analyst Eden Zoller suggested that O2’s early move into the space while its JV remains side-lined by regulatory investigation might create difficulties. “There could be challenges going forward in terms of positioning O2 Wallet alongside the collaborative mobile payments service that O2 is planning with Vodafone and Everything Everywhere,” she said.

Ofcom claimed that mobile operators will not be able to roll out LTE until 2013

Mobile network operators will not be able to roll out 4G LTE services until 2013 at the earliest, due to technical issues, according to UK regulatory body Ofcom, rendering speculation about whether the spectrum auction will be delayed as irrelevant.

The regulator has altered its forecast for the timing of the auction from 1Q12 to the “first half of 2012”, whilst admitting that it could yet happen in the first quarter of the year.

“It is a very complex programme with a number of different parts and processes and all of them have to happen at the same time, which makes it difficult to judge at this point when the auction will take place,” said an Ofcom spokesperson.

“We don’t want to say that it will definitely happen in the first quarter, but it might. It will happen in the first half though, and we’ve actually told operators this over the past three or four months.”

The spokesperson added that the UK’s mobile operators would not be ready to roll out the service until 2013 anyway as spectrum needs to be made available, and there are currently stumbling blocks in place.

Part of the 800MHz spectrum that is required for 4G is currently being occupied by digital terrestrial television and there are issues with 4G interfering with neighbouring bands, which need to be mitigated. Until these issues are resolved, operators will not be able to use the spectrum, and the earliest would happen is in 2013. Therefore, Ofcom argues that any issues with the timing of the auction will have no impact on operators’ plans.

The spokesperson added that speculation that the delay was caused by legal threats from mobile operators is “not true at all”. Everything Everywhere, Vodafone and O2 have each recently denied that they had attempted to delay the auction.

New Ofcom rules mean UK networks can now plays swapsies with their spectrum

UK regulator Ofcom, has announced that, from June 20th, mobile operators are permitted to trade the rights to spectrum amongst themselves. The new regulation covers 900MHz, 1800MHz and 2100MHz spectrum and mean operators will be able to bid for the use of spectrum they believe the have greater need for than other operators.

“By allowing operators to trade their spectrum, Ofcom believes that there will be greater opportunity to use it more efficiently. Ultimately, it is believed that this will bring benefits to citizens and consumers in terms of improved mobile services,” the regulator said in a statement.

The UK government directed Ofcom to make the move in December 2010 in a bid to improve competition in mobile services, and Ofcom started the consultation process in February 2011.

Auctions for UK LTE spectrum derived from the sought after 800MHz digital dividend will take place in 2012, with roll-out’s expected in 2013.

O2, the UK arm of Telefonica, recently objected to the plans, complaining the requirement for caps on potential spectrum band acquisitions was illegal under European law. The operator was more enthusiast about today’s spectrum trading news however stating simply that, “O2 welcomes the announcement made today by Ofcom that it has given the go-ahead for mobile phone operators to trade the rights to the radio spectrum they hold.”

Fifth-placed 3, part of the Hutchinson Whampoa group, was less enthusiastic however, stating:”Spectrum is the lifeblood of smartphones and the mobile internet and for those with surplus holdings it is also a strategic asset, so voluntary trading is the exception. This move simply allows those who have been gifted access to public spectrum to profit from it, with no benefit for UK taxpayers. Ofcom’s ambition to deliver faster and more capable services to consumers is best served by a truly competitive allocation of this public asset.”

O2 believes that Ofcom's UK LTE spectrum auction is illegal under EU law

The UK arm of Telefónica, O2, has released a statement blasting UK regulator Ofcom’s consultation over the forthcoming digital dividend spectrum auction.

The operator is objecting to the use of spectrum floors, whereby at least four operators will get at least 10MHz of spectrum below 1GHz.  However, O2 believes that these spectrum floors amount to a state aid, which would make them illegal under EU law.

“We believe that the proposed spectrum floors are a state aid and are therefore illegal under EU law,” the carrier said in a statement.

The use of spectrum floors would prevent it from gaining as much 800MHz spectrum as it would like. This is because Ofcom views O2 and Vodafone to have an advantage by already owning 900MHz spectrum. Sub 1GHz spectrum is more valuable as lower frequencies provide greater range and superior in-building penetration than higher ones.

“The proposed floors, and the argument that Vodafone and ourselves already have enough sub-1GHz spectrum, are based on the mistaken belief that 800 MHz and 900 MHz are directly comparable spectrums. They are not. Our response to Ofcom clearly explains why.

“Ultimately this auction is about new, next generation services. It is not about 2G and 3G, but about the future. It should therefore be used as an opportunity to provide fair, open and equal access to newly.”

O2 also said that limiting the amount of 800MHz spectrum to purchase will reduce its potential value. “Ofcom’s own figures suggest this effect could cost taxpayers £1bn,” it said.

The operator was also frank in its belief that Ofcom should rethink its whole approach. “While we support the proposed auction structure and spectrum caps, Ofcom is faced with a difficult choice of either revisiting its spectrum floors proposal or discarding the floors and getting on with the process.”

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The O2 arena in London

UK mobile broadband users accessing the web over dongles and datacards are getting average throughput of 1.5Mbit/s, according to research released Thursday by UK regulator Ofcom. But there were significant differences between the five carriers’ performance, with O2 delivering the best performance, and Orange the worst. 3UK outperformed T-Mobile, with which it shares a 3G network.

A panel of more than 1,000 consumers had software installed on their laptops by network measurement specialist Epitiro, which carried out the research on behalf of Ofcom. It was this software that yielded the 1.5Mbit/s average speed. Epitiro also set up static test instruments to mimic dongle-connected laptops in 97 UK locations in a bid to measure the networks’ performance under ideal conditions.

This element of the study, which measured the networks at points where the coverage was very good, showed higher performances. Average speed rose to 2.1Mbits/s, with O2 nearing 3Mbits/s. Overall more than 4.2 million tests were carried out across the five network operators. As well as delivering the fastest throughput, O2 also offered the lowest latency of the five carriers.

Orange and T-Mobile, recently brought together to form Everything Everywhere, were the worst performing of the five UK operators. The consumer panel research ranked the operators in the same positions as the static probe tests, according to Iain Wood, EVP marketing and product development at Epitiro.

Wood told Telecoms.com that the latency is a bigger issue for operators than the throughput they deliver. A real world average of 1.5Mbit/s is adequate for the web surfing that typifies most UK mobile broadband usage, but the latency, which Wood said averaged around 100 milliseconds, would “hamper responsive web surfing and prevent the watching of videos, online gaming and possibly VoIP usage.”

While the results will give O2, which in 2009 had to apologise to users for the poor performance of its network, some positive marketing collateral, Everything Everywhere will be smarting. In particular T-Mobile, where some executives are known to have voiced concerns over the merger of its 3G network with 3UK, will be galled to see its sharing partner outperforming it in such a study.

Ofcom’s research, which is the first study into mobile broadband speeds the regulator has published, also found that 17 per cent of UK households use mobile broadband. Furthermore, seven per cent are using it as their sole means of internet access, up from three per cent in 2009. The regulator said that it plans to carry out a similar study for smartphone use in the future.

The deal is the first instance of network sharing in Ireland

The second and third-placed mobile operators in the Irish market, incumbent Eircom and Telefonica’s O2, have announced that they are to share networks in a deal that Eircom described as the first of its kind in Ireland. Eircom said that the deal will “result in an unrivalled mobile experience for customers” as the two carriers seek to meet growing demand for high bandwidth services.

The firms said they plan to collaborate on areas such as power supply and site equipment as well as transmission sharing. Existing sites will be consolidated where possible, they said, and new sites jointly built. But the carriers were at pains to point out that the deal did not herald any more formal consolidation.

“While O2 and eircom will work closely together, there is no transfer of assets and spectrum will not be shared under the new arrangement. All mobile operations supported by O2 (O2 and Tesco Mobile) and eircom Group (Meteor and eMobile) will continue to compete with each other, ensuring that customer choice in the market is maintained, “ Eircom said in a statement.

With the Irish economy in dire straits, cost cutting strategies such as network sharing are likely to be crucial for the nation’s operators. The two carriers did not reveal the scope of the savings they expect to reap from the new initiative.

Eircom sits in third place in the Irish mobile market, closing out 2010 with 1.05 million customers, according to Informa’s WCIS. O2 sat second, with 1.66 million customers, while Vodafone led the market with 2.22 million. In fourth place, 3 Ireland has seen its customer base decline over the last year and had just 300,000 subscribers at end December 2010. While Eircom and O2 ruled out any amalgamation at the ownership level, it seems unlikely that Ireland, a nation in financial trouble, with only 4.5 million inhabitants, will be able to sustain four mobile operators.

O2 has launched its 3G900 network in the UK

O2 has staked its claim to be the first UK operator to switch on a 3G network over 900MHz spectrum in London. Taking advantage of recent licensing changes, this latest rollout in London follows on the heels of similar deployments in Birmingham, Leeds and Manchester; the London deployment is expected to deliver a 50 per cent increase in capacity and a 30 per cent increase in speed.

The UMTS900 spectrum was made available in January, when UK regulator Ofcom granted operators permission to use the previously 2G-only 900MHz band to deploy 3G services. This “refarming” policy is intended to increase mobile broadband rollout, but has attracted controversy thanks to the inconsistent way in which spectrum has been allocated in the UK in recent years. Everything Everywhere (the product of a merger between Orange and T-Mobile in the UK), for example, has no 2G spectrum in the 900MHz band and initially objected to what it saw as an unfair gifting of newly-valuable 3G spectrum to competitors Vodafone and O2 by the regulator.

Everything Everywhere dropped its legal bid to prevent the changes last year, but has since called on Ofcom to cap the amount of low-frequency LTE real-estate any one telco can own. The UK’s smallest operator, 3, has joined calls for caps. CEO Kevin Russell said that Ofcom’s failure to offer all operators a fair crack of the spectrum whip will drive smaller operators out of the market and cause price increases for end users. Russell told delegates at a London policy debate this week that, in markets where a smaller newcomer had survived, calls cost 19 per cent less and data costs were 28 per cent below that average in less competitive markets. Russell added that 97 per cent of traffic on 3 UK’s networks was data and that the firm sells more iPhones than any other operator; with no 2G spectrum to convert, it’s easy to see why the smaller player feels it’s in danger of being squeezed out of the market. In other countries such as Ireland, France and Germany, 3G900 spectrum was parcelled up and sold to a broad spread of operators in an effort to ensure competition.

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