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RIM ruffles operator features with NFC play

Whose customers are they anyway?

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RIM is the latest manufacturer to pitch NFC as something that bypasses network operators to the advantage of manufacturers, rather to the annoyance of said operators.

The Wall Street Journal has been talking to network operators in Canada and America who are unhappy with RIM's plan to embed an NFC secure element into Blackberry handsets rather than providing a connection to the operator's SIM chip. That locks the customer into RIM‘s infrastructure rather than the network operators‘, and that threatens the handsome handset subsidy operators currently provide on Blackberry handsets.

The paper quotes CEO of EnStream (a cross-operator payment scheme set up in Canada) Robin Dua, who claims that his company had been trying to get RIM to see sense for a while, but ultimately admitting, "I think it's going to be a little bit of a fight, frankly", as the manufacturer and network operator vie for ownership of the customer.

At issue is who holds the keys to the secure module requisite to the use of Near Field Communications (short-range radio) for payments. Google's Nexus S handset, for example, has an embedded secure module under the control of the chocolate factory, and a link to the SIM (using the Single Wire Protocol, SWP) which allows the network operator to provide an additional secure module. Nokia's C7 goes even further and provides no secure module at all, being entirely dependent on the operator to provide one in the SIM.

Whomever controls the secure model can decide what applications can be installed – so if Visa, or Oyster, or Barclays want to provide a downloadable payment application, then they have to go to the owner of the secure module for permission (and digital signing). The choice of secure module also impacts the user experience – a SIM changes handsets when the user does, but the new handset might come as a user changes network operators.

That complexity has driven the US operators to endorse Isis, while the banks promote a removable module embedded in a microSD card. The removable card makes it independent from the network operator and the handset manufacturer, but at the cost of additional hardware.

According to The Wall Street Journal, RIM plans to embed its secure element in the handsets, and does not plan to support the SWP. That cuts operators out of the loop, and will make them reluctant to cough up the subsidy that keeps Blackberrys cheap. So a threat on their part to leave may be enough to make RIM change its mind. ®

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