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June 16, 2011, 8:02 a.m. EDT

UK mobile operators to form mobile payments JV

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By Lilly Vitorovich

LONDON -(MarketWatch)- The U.K.'s three biggest mobile operators said Thursday they plan to create a joint venture to develop mobile payment services following the rising popularity of smartphones.

Vodafone Group PLC (VOD.LN), Telefonica SA /zigman2/quotes/200416613/delayed ES:TEF -0.93% and Everything Everywhere, the joint venture between France Telecom's Orange and Deutsche Telekom AG's (DTE.XE) T-Mobile said they have joined forces in the U.K. to enable "the rapid development and delivery of new mobile marketing and payment services."

The joint venture, the first of its kind in the U.K., will provide a single contact for advertisers, marketing partners, retailers and banks, which the three operators believe will make it easier to create mobile commerce products and services.

Everything Everywhere Chief Executive Tom Alexander said the venture will allow people "to manage their money and make payments using their handsets, helping advertisers reach their customers on the move, and helping banks provide their clients with an easy and convenient way of making payments."

Hutchison Whampoa Ltd.'s (0013.HK) Three UK, the smallest of the four major U.K. mobile operators, said the venture was a good idea, but was concerned about its own exclusion from the project.

"As the leader in the adoption of mobile internet services in the UK we would want and expect to be a part at the heart of a cross-industry development like this and are more than a little concerned that - as a core competitor - we have not yet been invited to be part of this joint venture," outgoing CEO Kevin Russell said in a email to Dow Jones Newswires.

"The crucial test of the openness of this initiative will be our ability to launch services for all UK mobile consumers simultaneously," he added.

The joint venture, which is subject to competition clearance, is expected to launch before the end of the year.

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