SK Telecom (NYSE:SKM) announced today that it developed the world’s first USIM card equipped with a Near Field Communication (NFC) chip, called ‘NFC on USIM,’ to enable NFC-based services on non-NFC handsets.

NFC is a near-field wireless communication system that uses 13.56MHz frequency for data exchange between two devices in close proximity to each other (approximately 10 centimeters). Unlike Radio Frequency Identification (RFID) that only enables reading, NFC allows two-way transmission of data, thereby enabling both reading and writing. NFC can be applied to a wide range of areas including mobile finance, mobile payment and user authentication.

NFC on USIM, developed with SK Telecom’s own technology, is a special USIM card embedded with a 13.56MHz antenna, NFC chip and USIM chip.

Developed in line with the company’s efforts to minimize customers’ cost burden, NFC on USIM can be simply inserted into customers’ existing mobile phones to enable the use of a wide range of NFC services including mobile finance/ payment service. Previously, customers had to buy a mobile handset with a built-in NFC chip, or so-called NFC phone, to use the NFC function.

The sharp increase in the number of handsets that offer NFC function through NFC on USIM is expected to fuel the spread of NFC-based services and lead to the development of diverse related services.

NFC, currently used mainly for mobile finance and mobile payment services like mobile credit card, has the potential of giving birth to many relevant services, as a handset inserted with a NFC on USIM card can itself serve as the reader that enables peer-to-peer communication unlike Radio Frequency Identification (RFID) that can only be used at places where readers are pre-installed. 

For instance, NFC-enabled handsets can be used for reception of stores’ product information including special discount price; mobile advertisement; real-time account transfer between NFC handset holders; real-time use of coupons; electronic business cards; hotel check-ins; tag-based door lock (instead of password-based door lock); and user verification for PCs.

SK Telecom has plans to commercialize NFC on USIM in October 2011 for enterprise customers and will open NFC on USIM- related Application Programming Interface (API) to outside developers to boost the development of diverse NFC-based services.

Moreover, the company aims to provide NFC on USIM to the overseas markets including China to accelerate the spread of NFC-enabled handsets and the mobile payment infrastructure. It also plans to export Korea’s advanced mobile finance/ payment solutions overseas, thereby helping Korean small-and medium-sized enterprises (SMEs) expand their business to the international markets.

Ihm Jong-Tae, the Head of Institute of Network Technology at SK telecom said, "With the increase of NFC-enabled handsets supported by NFC on USIM, SK Telecom expects to boost the creation and adoption of NFC services, which has been chosen as one of the company’s future growth engines. SK Telecom will position itself as the leader in the NFC-based business by constantly developing relevant technology and implementing appropriate business enhancement measures."