Revenues from Trusted Service Management for NFC Services to Touch $536 Million by 2015

A new analysis from Frost & Sullivan (News - Alert) finds that commercialization of near field communications (NFC) services will drive the trusted service management (TSM) market.

The research predicts that revenues derived from TSM for NFC services market will reach approximately €330 million (approx. $536 million) by 2015, with a Compound Annual Growth Rate (CAGR) of 74 percent between 2010 and 2015.  

Trusted Service Managers (TSMs) play a crucial role for providing security in NFC ecosystem. Frost & Sullivan says during the early stages of NFC, the main core services of TSMs have a technical character; but as NFC matures, TSMs will evolve and fulfill a business enabler role.The report, “Trusted Service Manager – The Secure Bridge between NFC Stakeholders,” predicts that life cycle management of applications and management of the secure element will remain the main sources of revenue for NFC.

“NFC handset availability will stop being a restraint and will, instead, become a driver for the NFC services market, and thereby, for the trusted services market with 2011 and 2012 expected to be key years in NFC-handset-deployment,” said Frost & Sullivan research analyst Mario Fernandez, in a statement.

Fernandez added that the increasing number of collaborations between mobile network operators and service providers will constitute one of the major catalysts for trusted services market in NFC.

NFC market requires a trusted service manager to moderate the technical aspects of the technology. As a result, TSMs may evolve and become responsible for the management of commercial relationships between participants of the NFC market.

“Payment and transportation applications will push the market during the next five years,” added Fernandez. “Provisioning of platforms for Digital Right Management and mobile marketing are markets that have not been explored by TSMs, but they could become, if well addressed, a source of tremendous growth.”

Frost & Sullivan finds that multiplicity of secure element form factors, interoperability among consortia and low end-user awareness are the issues that affect the uptake of NFC and, thereby, the trusted services market.

NFC is a nascent industry with several participants setting up conditions and grabbing the greatest market share during the early stages; but NFC commercialization will not take place if such approaches are taken, according to Frost & Sullivan.

According to Fernandez, none of the NFC participants pushes for a single type solution; rather all participants firstly focus on standardizing the market.

“TSMs are key stakeholders of the NFC ecosystem, and their collaboration is needed for the successful deployment of NFC services,” Fernandez added.

The MIFARE4Mobile industry group, according to Fernandez, is an initiative that demonstrates the cooperation among competitors. A collaboration of seven major companies from the telecom, smart card, semiconductor and payment, the MIFARE4Mobile industry group aims to bring forth relevant specifications and standards for the management of MIFARE applications on NFC secure elements.

Earlier this year, Frost & Sullivan predicted that NFC-enabled mobile phones will reach 863 million units in 2015. At this time, NFC-enabled mobile phones will represent more than 53 percent of the overall market.

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