About Smart Cards : Applications : Telecommunications

Telecommunications Applications

Smart cards are used extensively in the telecommunications industry worldwide. Eurosmart has reported that 580 million memory smart cards and 1.39 billion microcontroller smart cards were shipped globally for telecommunications applications in 2005.

GSM and Smart Cards

According to the GSM Association, there were over 1.9 billion GSM subscribers worldwide as of 2nd quarter of 2006. GSM mobile phones include a smart card, the Subscriber Identity Module (SIM), which is configured with information essential to authenticating a mobile phone, thus allowing a phone to receive service whenever the phone is within coverage of a suitable network. Without a SIM card, a GSM mobile phone cannot function effectively (typically reduced to emergency service only).

Pay Phones and Smart Cards

Over 100 countries use smart cards instead of coins in their pay phones to improve customer convenience and telecommunications operators’ business models (less cash, reduced risk of losses).

Mobile Payment

Mobile phone users are already familiar with using their phones to pay for products such as games, ring tones and other digital content. Mobile phones and other mobile devices are also being used to pay for products at a physical point of sale (POS), due to the increasing availability of new, more capable mobile devices and new payment technologies that make such transactions possible.

While various mobile payment models have been piloted, the financial industry launch of contactless credit and debit cards based on the ISO/IEC 14443 standard and the emergence of ISO/IEC 18092 (Near Field Communication) provide opportunities for the mobile telecommunications industry to incorporate mobile payment technology in the handset that can be used at existing merchants who accept contactless American Express, MasterCard and Visa credit and debit cards.

Additional information about Near Field Communication (NFC) can be found at the NFC Forum.