About Smart Cards : Applications : Telecommunications

Telecommunications Applications

Smart cards are used extensively in the telecommunications industry worldwide. Eurosmart has reported that 5.2 billion smart cards will ship globally for telecommunications applications in 2012. Eurosmart is estimating that smart card shipments for telecommunications applications will grow to 5.45 billion in 2013.

Smart cards are used in two primary telecommunications applications – as prepaid (stored value memory cards) telephone cards and as the microprocessor smart card-based Subscriber Identity Module (SIM) in mobile phones. In addition, new NFC-enabled mobile phones that incorporate a secure element are being used for a variety of applications, including mobile contactless payments, ticketing and mobile marketing.

Smart Cards, SIMs and UICCs

A Subscriber Identity Module (SIM) card is a type of microcontroller-based smart card used in mobile phones and other devices. A SIM identifies and authenticates a subscriber to a wireless cell phone network. Unless blocked by the operator, a subscriber can move his phone service to a new phone just by physically moving the SIM. SIMs also facilitate global roaming, providing subscribers with access to voice, data and other services when traveling in other countries. In addition, SIMs can store contact information and phone numbers, and can be used for other applications.

The Universal Integrated Circuit Card (UICC) is a new generation of SIM technology optimized for newer wireless network standards. The term SIM is widely used in the industry and especially with consumers to mean both SIMs and UICCs, although they are different technologies. The UICC offers many enhanced capabilities, including better support for multiple applications and IP addressing.

SIMs and the newer UICCs are used in wireless networks based on several different standards, but the fact that they are mandatory in GSM (Global System for Mobile communications) networks has been a very significant market driver.

SIMs and UICCs are the smart card industry’s highest volume products for both units and revenue. According to Eurosmart, microcontroller smart card production shipments for the telecom sector in 2012 will be 5.2 billion units. This represents 73% of the 7.095 billion total number of smart cards that are estimated for all sectors for 2012.

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).

NFC-Enabled Mobile Applications

NFC technology is a standards-based wireless communication technology that allows data to be exchanged between devices that are a few centimeters apart. NFC operates at 13.56 MHz and transfers data at up to 424 Kbits/second.

NFC is distinguished by its intuitive interface and its ability to enable largely proprietary wireless networking platforms to interoperate in a seamless manner. The primary uses are to:

Expected NFC-enabled mobile applications include:

When used for mobile contactless payment, NFC-enabled mobile phones incorporate smart chips (called secure elements) that allow the phones to securely store the payment application and consumer account information and to use the information as a “virtual payment card.” NFC payment transactions between a mobile phone and a POS terminal use the standard ISO/IEC 14443 communication protocol currently used by EMV and U.S. contactless credit and debit cards.

NFC-enabled mobile phones can also be used for chip-enabled mobile marketing applications – coupons, loyalty programs and other marketing offers that can add significant value for merchants, issuers and the mobile ecosystem.

Smart Card Alliance resources on NFC-enabled mobile applications include:

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

Other Industry Resources and Organizations