Gordon Brown in every handset

Payment will be an important application for mobile telephony

Hutchison’s tariff cuts have helped it to sign up 10,000 people a week for 3G telephony. But what will the killer application of 3G turn out to be? A new, excellently-researched and forthright defence of 3G technology casts some useful light on the matter.

Published by the influential thinktank Demos, in association with O2, James Harkin’s Mobilisation: the growing public interest in mobile technology starts by indicting the government’s Office of the E-envoy for what it calls “the glaring absence of a coherent mobile strategy”. Through research with British youth and early users of 3G on the Isle of Man, the study suggests that while the mobile phone is a comfort to us all, a local device for intimacy more than for global roaming, and a source of irrational panics, it is also “more than a plaything”.

So what is it? For my money, Mobilisation is a mite too dismissive of the Girls-Games-Gaming vision of 3G. As Harkin himself notes, after all, the vogue for fun and games goes back much further in our culture than the mobile phone. But the report is a rare relief in highlighting, if only briefly, the impact mobile data and 3G could have on productivity, supply chains and working arrangements.

For Harkin the killer application for mobiles will be their use as tracking devices for pinpointing location. Here he is persuasive but not quite convincing. He seems enthused by the limits that location-tracking could impose on marital infidelity. But he worries that David Blunkett will follow our every move.

Things probably won’t come to that, and the report is right to observe that irrational fears of tracking and intrusions of privacy could impede the development of 3G. But apart from mobile-as-play, mobile-as-worktool and mobile-as-tracker, there is another set of killer applications that 3G will encompass, concerning payments.

As Mastercard and Visa move the world’s banks over to smartcards and readers in 2005 to 2006, so the mobile-as-wallet, long promised, will finally unfold. Already, mobiles in the Far East allow gamblers to pay via their phones, and Parlay Entertainment has launched what it describes as “the world’s first real-time, real money, full-function wireless casino”. And in the UK, the payment services company Simpay has concluded deals with Vodafone, T-Mobile, Orange and Telefónica Móviles to allow subscribers to buy things over their handsets.

Where payments via mobiles will really be important, however, is for government. As Harkin points out, 15 percent of payments for the London congestion charge are made by SMS. At the Treasury, Gordon Brown’s economics adviser, Ed Balls, favours more such charges in UK cities; so paying local government from your mobile could become a national habit.

Central government units may follow suit. Now that the Inland Revenue and Customs & Excise are due to relocate to Whitehall, it cannot be long before, in the mobile domain, Pay As You Go is joined by Be Taxed As You Move.