Thank you very much, Mr. Chairman.
I'm joined by Mr. Engelhart. My name is David Robinson. I'm vice-president of emerging business at Rogers Communications, where I've worked since about 1990. Since about 2005 I've been leading our initiatives in the area of mobile commerce, including the area of what we call mobile proximity payments.
You all have a deck in front of you. I'm going to walk you through that. You have our written submission for the record, but I'll talk through those slides.
Please move to the slide that says “Mobile proximity payments is a subset of mCommerce”. What we're trying to do in mobile proximity payment specifically is actually very simple. We're trying to make a cellphone look, to the payment system as it exists today, like a card—nothing more, nothing less.
To do this is no small feat, however; you need a few really important things. You have to have a mobile version of the card on the phone and you have to make changes to the phone. This is something that started six years ago at an association that we belong to, the GSM association. There are over 800 carriers alone in that association.
What we tried to do was determine methods and technology that would allow that mobile phone—the ones that are globally available, that are GSM-technology phones, the ones that virtually the entire planet uses—to pretend to be a card. To do that, you have to get antennas into these things and get security software into them.
The good news is that this part is more or less done. Many of the phones that you're buying today, including the one I have in my hand, actually have the capability built into them today to be a card. A year from now I'd expect that millions of Canadians will already have the hardware that they need in their phones, and that comes from work that started over six years ago. It should be as normal to get a card on a phone as it is today to get a camera on a phone. That was outrageous only a few years ago and is as normal as can be today.
Turning to the next page, having a card on a phone is rather pointless if there's no acceptance of contactless cards. Mike spoke to you about what Visa is doing in that area. These card phones are really thin, but they're not thin enough to swipe. So there has to be infrastructure to accept that phone as a contactless card or a credit card.
We're in a pretty good state here in Canada. There are important pieces. The banks, or the issuers, as we call them, are starting to send out cards in tens of millions, to this day, with that really important piece of technology on them. The little wave on the side of the Visa card—I'll pull out a MasterCard, if you'll feel better—says this can be accepted.
That very same technology is what is going into these phones, and the issuers are sending out the plastics. The retailers are starting to put up these contactless terminals. Go into McDonald's. Go into Tim Hortons. You will see the little reader that allows you to tap that card. You'll be able to use that exact same infrastructure to tap your phone; there's absolutely no change required from that point back. And that was the objective of the GSM association from the very beginning: just make it look like a card; don't change anything else.
In Canada we're in a pretty good position, and the carriers have pushed technology forward over the years, frankly by subsidizing phones. These things cost $700; you pay maybe a couple of hundred bucks on a term contract. That helps move the technology forward. Every couple of years, people typically get new phones, and in Canada they get smart phones more than in almost any other country in the world. And that's where this is going to start, in smart phones. As I look at phone adoption, next year the outlook is good that we'll have millions of these phones in place.
Now, on the next page we talk about EnStream. This is how we're going to do this. We have the phones, people want to use them, the banks are issuing the contactless cards, the terminals are starting to proliferate at retail, but how are you actually going to get all those cards onto all those phones? That's what EnStream was created for in 2005.
It's a joint venture of Bell, Telus, and Rogers that was designed to forward the interest of mobile commerce in this country. In the area of proximity payments, what it's going to do is act as someone in the middle who will say: if you're a bank, or you're a public library, or you're a transit pass, or you have an access card for a building, plug it into this EnStream thing in the middle, and we'll help distribute that virtual card to all of the phones in the country. That's the objective.
The next page says “Rogers supports the SIM”. That's where the card will be. You might ask what a SIM is. In the case of every GSM phone in the world, if you take the battery off you'll find a little thing on the back that looks exactly like what I'm showing you. That's the SIM. It's where we as carriers put our phone number, which identifies you, with your phone number, and allows us to make the calls happen.
That is where we put our really important information securely, and we've done it for dozens of years and billions of times quite effectively and without a security incident. That is the location where we are recommending to the industry globally that, through this same standard developed in the GSM association, all the payment cards should go—because it's a wonderful thing.
First of all, it's secure. It has to be. At the end of the day, MasterCard will have to say this is secure; Visa will have to say this is secure. When you see those logos show up on a mobile phone, it matters; they mean something.
It's also a wonderful thing because it's portable. One of the attributes that we believe is critical is that there are things about this leather wallet that are not broken. You have to be able to pick what it is that you put in your wallet, and we endorse that. And you should be able to move your cards from wallet to wallet. This SIM is what is going to enable doing that: all your cards will be in this. You'll get a new phone, you put it in, and it works.
The wallet software, discussed on the next page, is how this is all going to happen. I won't bore you with it, but that's how you actually make this virtual wallet on the mobile phone look like the leather wallet that you have in your pocket today.
The next page looks at benefits to the consumer. This is a wonderful thing. Think about it. You always think, what if I lose my wallet? It's a terrible thing. First of all, you're powerless; second of all, you have to recreate and replace all this stuff. In a world where you lose your mobile phone, first of all, it's locked. My leather wallet is not locked; anyone can pull out and steal my identity. This will be locked.
Then, you give us one phone call and all the cards are killed—your ID cards, everything. Then you get a new phone, and it will replace them as quickly as we can, in mere moments. The issuer will be able to get all these cards out over the air in real time. The people who I think are going to benefit the most are going to be the smaller issuers, because now the barriers to distributing a card are lower. It's going to cost less, we can do it in real time, we can do it over the air, and we can do it to millions of phones almost simultaneously rather than mailing them out.
