Updated: UK Mobile Carriers Team Up For M-Payments Push

Big news today in the world of mobile payments: the three largest operators in the UK have announced a joint venture to offer mobile wallet services to its customers, in the hopes of finally kick-starting a service that has been long on discussion but painfully short on execution up to now.

O2 UK, Vodafone (NYSE: VOD) UK and Everything Everywhere (itself a joint venture between France Telecom’s Orange UK and T-Mobile UK ) are banding together to form what they call a cross-platform, single solution. The operators say that this will create a simplified, one-stop shop for banks, merchants, advertisers and other marketing partners in the mobile payments value chain.

For those who have been watching the UK mobile industry for a while, you might recall that these operators have tried to get together to offer m-payment solutions in the past (see: M-Pay, Simpay and many other efforts that are now relegated to the dustbin of mobile history).

None of that has gone anywhere, and the last few years have mainly been about each operator working on its own initiatives. (Including Orange working on an NFC trial with Barclaycard, pictured.)

Now it appears that the market is forcing them to rethink this idea. Consumers are catching on to using their devices for a lot more than calls and texts. Smartphones are getting increasingly equipped with the right technology to execute payments securely.

And perhaps most importantly: with companies like Google (NSDQ: GOOG), Visa and to a lesser extent Square looking to spearhead mobile payments with themselves in the center of the transaction, it’s clear that that mobile operators have decided that scale, and control of those all-important SIM cards, is their best weapon. (And given how apps have largely passed them by as a business opportunity, they definitely don’t want mobile payments to be repeat performance.)

The operators have scheduled a call for later today to talk through more details and we will update this story as we get more information. [Update below.]

For now, they have pointed out that the JV will need regulatory approval to go ahead. (I can hear Hutchison’s Three marching to Ofcom’s offices already…)

Update: Three made a swift response after the JV was announced, and as you would expect highlighted its exclusion from the forming of the JV. CEO Kevin Russell noted: “Directionally, this is a good move on taking m-commerce forward. As the leader in the adoption of mobile internet services in the UK 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 from this joint venture. The crucial test of the openness of this initiative will be our ability to launch services for all UK mobile consumers simultaneously.”

On the conference call, the CEOs of the different operators all emphasized that other operators would be welcome to come into the venture after it launches. “We’ll be customers of the venture, anyone can be,” explained Ronan Dunne, CEO of O2. “[O2, Vodafone and Everything Everywhere] have actually built and developed capabilities and we’re putting this together [and] creating a market for those who don’t have the scale to do it. The JV makes it easier to access this.”

It’s clear that there are still a lot of details to be ironed out, and some of the questions that the CEOs fielded, if anything, seemed to create more rather than less confusion. The JV will be an infrastructure for payments, but it won’t process any payments. This will be down to each operator, working with their individual partners, it seems.

It also looks like the first products of this JV will be about advertising rather than NFC payments. Again, Dunne: “NFC is gong to take a little more time, but between the three of us we buy considerable amounts of handsets and [handset makers have] been looking for someone to put their hand up and embrace NFC in a big way.” On advertising, it looks like the idea will be to use the platform to launch campaigns, targeting the subscriber bases of all three operators. In both services, users will be able to opt in and opt out of services.