Vincent Poulbere
T-Mobile to quit Simpay?
According to Frankfurter Allgemeine Zeitung, T-Mobile will soon quit Simpay. Simpay was set-up by several large European mobile operators (Orange, Telefonica Moviles, T-Mobile and Vodafone) to implement an interoperable framework for content payment. In February 2005, Simpay announced the addition of two new operators (Amena and Proximus) and the first commercial launches (in mid-2005 in Spain, and the end of 2005 in the UK and Belgium). Comment: A key characteristic of the mobile payment field is the high number of international industry initiatives that have eventually failed to produce concrete results. If this morning's announcement is confirmed, then there is a risk that Simpay may not reach the critical mass of operators that is necessary to get the full benefits from establishing an interoperable framework. Simpay's goal is to provide a single solution for mobile content payment, which sits outside the mobile operators' portals. Simpay was established as an association of mobile operators; it is based on a very similar model to the credit/debit cards, with the operators playing the role of the banks. Today, most mobile content is bought on operators' WAP or i-Mode portals, or by premium SMS. The 'off-portal' market is still small, which can be explained both by the lack of payment solutions available and by customers' difficulties in accessing them. Local solutions, such as Gallery in France, have already been implemented by operators, with limited success. Overall, the real benefits of Simpay for mobile operators are hard to predict. Important challenges remain for Simpay. In our view, a key condition of success is the full support of the operators involved in Simpay to market the solution and recruit Simpay merchants, as well as broad coverage to provide customers with genuine benefits from interoperability, both at national and at international levels. Thus, T-Mobile's decision to quit Simpay would clearly jeopardise its success, and it would also raise doubts for operators wishing to come on board.
