SIM cards get smarter

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As North American wireless service providers increasingly tout value-added services in an attempt to differentiate themselves from the competition, widespread 32-kilobit subscriber identity module cards are being replaced with more capable 64k SIM cards, a trend that mimics what occurred in Europe a year ago.

And the switch will happen quickly, according to Dale Sperrazza, vice president MobileCom for Axalto, who forecasts that for the second half of the year, 64k cards will dominate the North American market.

A SIM card is a computer, minus the screen, keyboard and power supply, each of which is supplied by the phone itself, explained Sperrazza. That SIM-card computer is capable of storing personal information like contact lists, passwords and location-based services so users switching phones can take their SIM cards along without missing a beat. Going forward, SIM-card players expect biometric information, fingerprint technology and other recognition techniques to be implemented on the cards so they can act as ID badges and payment devices.

“The card is becoming more of a product than a piece of hardware,” said Sperrazza.

Demonstrating the power of the mobile phone, NTT DoCoMo Inc. last week launched the FOMA F900iC smart phone, a third-generation smart-card handset from Fujitsu based on the Symbian operating system. The phone is compatible with the i-mode FeliCa service for mobile-wallet applications in Japan, which can support debit card and credit card-based withdrawals and transactions, and store personal identification information.

Axalto, formerly known as Schlumberger Smart Cards & Terminals, has had a busy year that included a name change, an initial public offering in the French market and several U.S. partnerships.

Recently, wireless distributor Brightpoint Inc. teamed with Axalto to sell and distribute its mobile solution in North America. Under the agreement, Brightpoint will market Axalto smart cards, smart-card readers and middleware to its wireless network operator customers in North America.

The partnership is key because it offers Axalto a channel into tier-3 carriers that make up Brightpoint’s customer base, said Sperrazza. The deal also marks Axalto’s first distribution partnership in North America and is Brightpoint’s first SIM-card offering.

The news also backs up comments from Brightpoint competitor CellStar Corp., saying that distributors would have to begin offering value-added services in addition to handsets to keep their businesses successful going forward. CellStar recently began selling a reverse logistics solution to carriers, retailers and manufacturers, and said it eventually would like 30 to 40 percent of its total revenues to come from such additional offerings.

Axalto also has a deal with Telespree to offer a user-provisioning service that allows carriers to fully activate automatically over the air new subscribers.

The service uses Telespree’s self-service technology and works through Axalto’s SIM cards. It can remotely run credit checks on new users and then allow them to select either prepaid or postpaid wireless service, all without the need for retail or call-center support.

Axalto also debuted SIMGO, a solution that allows operators to develop and update applications over the air, allowing them to remotely add new menu options to subscribers’ mobile phones to support services like TV voting applications.

The next major trend in the SIM card business will come as operators transition their networks to 3G technology, Sperrazza commented. SIM cards used today will have to be replaced with USIM cards, which are already being used in Europe and Asia. The cards also work with 2G networks, so operators could begin upgrading them in preparation for 3G. “It may be smarter to implement them now,” Sperrazza said.

USIM card pilots with key North American operators are expected to begin next year, said Sperrazza.

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