The largest U.S. wireless carriers, AT&T Inc, Verizon Wireless and T-Mobile USA, have decided against setting up a separate network for payments on transactions done by phones, the Wall Street Journal said.
Setting up a separate network would have proven to be too difficult and time consuming, two people told the WSJ.
The joint venture, known as Isis, had originally planned to siphon market share from Visa Inc and MasterCard Inc, by establishing its own payments network and collecting fees on every transaction conducted via mobile phones.
But Deutsche Telekom AG’s T-Mobile USA, AT&T and Verizon Wireless have now adopted a less ambitious goal to create a “mobile wallet,” that can store and exchange the account information on a users’ existing Visa, MasterCard or other card, the paper said, citing people familiar with the matter.
And this time around, the carriers are in talks with Visa and MasterCard to have them participate in the system they will embed in phones, in a bid to garner as many users as possible, people told the WSJ.
In November, Isis had said the network would use Discover Financial Services’ national payment network at its roughly 7 million U.S. merchant partners and that Barclaycard U.S., a unit of Barclays Plc, was expected to be the first lender on the network to offer mobile payment products.
The embrace of the major card companies was needed to avoid falling further behind in the race to establish a standard way for letting consumers pay for products with their cellphones, the paper said, citing sources.
Mobile data users still overwhelmingly prefer USB modems for keeping PCs and other devices connected while on the go, but they may turn more to built-in cellular radios and portable Wi-Fi hotspots over the few years, according to ABI Research.
Despite the growing market for connected tablets and the availability of laptops and netbooks with high-speed cellular modules built in, worldwide shipments of USB modems still surpass embedded 3G and 4G modules by three to one, ABI said in a report Monday. But by 2016, that ratio may change to near an even split, said ABI analyst Jeff Orr.
Mobile operators including AT&T, Verizon Wireless and Clearwire give consumers the option of buying a laptop or netbook with an integrated cellular module. Those computers let subscribers go online almost anywhere without using up a USB port or carrying around a separate piece of hardware that sticks out of the side of the system.
Built-in modems lock buyers into one carrier or network technology for the life of the device, which most consumers and enterprises don’t want, Orr said. They buy USB modems because they can be easily discarded when a better network comes along, he said. Prices are low and often there is no early termination fee for getting out of the carrier data contract. “That device becomes almost disposable,” he said.
One problem with built-in modems is that wireless technology changes faster than most users want to change computers. For example, the past three years — a typical PC lifetime — have seen the construction of both a WiMax and an LTE network in many cities around the U.S., offering 10 times or more the speed of 3G networks.
The market for embedded modems is still fairly small, according to ABI. In 2010, only about 5% of laptops worldwide shipped with built-in cellular modems, Orr said. Among netbooks, 17% came with modems, but overall shipments were much smaller for netbooks than for laptops. Meanwhile, 40% of tablets came with such modems, but the overall tablet market was smaller still.
But embedded modems could start to gain popularity as tablet sales grow and as the incremental cost of the modems shrinks, Orr said. One thing that could cut that price is shifting some of the cost to an activation fee paid only if the customer decides to sign up for service, he said. There are already laptops available from U.S. electronics retailer Best Buy with WiMax built in, with no requirement for the buyer to sign up for Clearwire service.
Meanwhile, portable Wi-Fi hotspots that use cellular data networks may dwarf both embedded and USB modems by 2016, Orr said. These allow users to connect several devices to the 3G or 4G network simultaneously and pay only for one data plan. All that’s needed on each device is Wi-Fi.
A cell-phone application that logs everything the phone’s user does,from sending e-mail to playing games, may not sound so desirable. But researchers are deploying the software to see if they can determine the best ways to improve the battery life of phones and uncover network dead spots.
Working with colleagues at Microsoft Research, Hossein Falaki, a PhD candidate at UCLA’s Center for Embedded Network Sensing, has developed software that records data use, phone use, and battery-charge levels. The software is designed to run on devices that use Windows Mobile or the Android operating system. The Android version can also track the data sent and received by individual applications.
“One major problem we all experience with smart phones is that the batteries don’t last long enough,” says Falaki, who is scheduled to present a paper next month at the Internet Measurement Conference in Melbourne, Australia, on more than 2,000 days of data collected from eight Windows Mobile and 35 Android users. “By studying how people use the phones, we can find ways to match devices and networks to people.”
For example, the tracking application uncovered data suggesting that a tweak to the hardware of two phones made by the Taiwanese manufacturer HTC– could save approximately 40 percent of the power consumed by their radios. These handsets automatically switch off the radio after being idle for 17 seconds, a tactic used by all handsets and often with a similar time-out value. But that is a poor match with the very “bursty” way that smart-phone users access data, says Falaki. “People take the phone out of their pocket, interact with it for a few minutes, and then don’t use it for a relatively long time after,” he says.
Logs of data use showed that after a burst of activity, users rarely needed more data in the subsequent 17 seconds, so the radio was often left on needlessly. In fact, some 95 percent of data packets were sent or received within 4.5 seconds of the last one. Resetting the device so that the radio powered down after 4.5 seconds would consume 40 percent less power without affecting performance, says Falaki.
“These ‘tail times’ are larger than they need to be,” says Arun Venkataramani, an Assistant Professor at University of Massachusetts, Amherst who studies power use in mobile devices. “From an application and user perspective, there’s significant room for improvement.” The Microsoft-UCLA data agrees with results from his own experiments looking at the energy costs of cell-phone timeout periods, he says.
Falaki says devices, apps, and wireless networks should be designed with more regard to how people actually use their devices, but that because smartphones are still relatively new, little is known about that. Previous studies have used data about wireless networks as a whole instead of individual user behavior, or lab-based experiments where phones transfer test data and patterns of everyday use are not encountered, he says. “In contrast, we capture real usage patterns as people used their devices normally.”