A European mobile wallet venture led by telecommunications operators has run into a setback with regulators.
"Project Oscar," unlike the Isis telco-led mobile wallet partnership in the U.S., must gain regulators' approval to move ahead. The European Commission on Monday announced plans to conduct an in-depth investigation of the joint project proposed last June by Telefonica UK, Everything Everywhere Ltd. (owned by T-Mobile and Orange), and Vodafone UK.
The telcos serving the United Kingdom and other parts of Europe proposed a venture in which each company would provide startup funding to create a system that uses Near Field Communication technology for contactless payments at the point of sale.
The venture's key goal is to create a single mobile-commerce "ecosystem" that would serve advertisers, banks and retailers in a growing mobile payments market, the telcos say.
That sort of rhetoric apparently spooked Hutchison 3G UK Ltd., known as Three, a U.K.-based mobile payment provider whose executives reportedly informed the commission that the venture would stifle competition by creating a monopoly, observers say.
It is likely that Three raised some legitimate concerns and the fact that the commission put the brakes on the project demonstrates the complexity of the region's payments regulations, says Zil Bareisis, a London-based senior analyst for research firm Celent.
"There are many issues to consider when approving new entities, such as the proposed Oscar partnership, and Three has likely done a good job of showing concerns about being excluded," Bareisis says.
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