14-05-2014, 12:19 PM
Smart Cards in Wireless Communications
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Definition:
This tutorial presents a business case for the use of smart cards or subscriber identity modules (SIMs) in the marketing and network operations of wireless communications operators. The business case focuses on the SIM card’s marketing, financial, and technical benefits to network operators as well as benefits to wireless consumers. Some key external factors likely to accelerate customer acceptance are also discussed.
Overview:
Today, the SIM card’s basic functionality in wireless communications is subscriber authentication and roaming. Although such features may be achieved via a centralized intelligent network (IN) solution or a smarter handset, there are several key benefits that could not be realized without the use of a SIM card, which is external to a mobile handset. These benefits—enhanced security, improved logistics, and new marketing opportunities—are key factors for effectively differentiating wireless service offerings. This tutorial assumes a basic knowledge of the wireless communications industry and will discuss the security benefits, logistical issues, marketing opportunities, and customer benefits associated with smart cards.
Smart Card Overview :
The smart card is one of the latest additions to the world of information technology (IT). The size of a credit card, it has an embedded silicon chip that enables it to store data and communicate via a reader with a workstation or network. The chip also contains advanced security features that protect the card’s data.
Smart cards come in two varieties: microprocessor and memory. Memory cards simply store data and can be viewed as small floppy disks with optional security. Memory cards depend on the security of a card reader for their processing. A microprocessor card can add, delete, and manipulate information in its memory on the card. It is like a miniature computer with an input and output port, operating system, and hard disk with built-in security features.
Smart cards have two different types of interfaces. Contact smart cards must be inserted into a smart-card reader. The reader makes contact with the card module’s electrical connectors that transfer data to and from the chip. Contactless smart cards are passed near a reader with an antenna to carry out a transaction.
Introduction to Smart Cards in Wireless Communications :
Smart cards provide secure user authentication, secure roaming, and a platform for value-added services in wireless communications. Presently, smart cards are used mainly in the Global System for Mobile Communications (GSM) standard in the form of a SIM card. GSM is an established standard first developed in Europe. In 1998, the GSM Association announced that there are now more than 100 million GSM subscribers. In the last few years, GSM has made significant inroads into the wireless markets of the Americas.
Initially, the SIM was specified as a part of the GSM standard to secure access to the mobile network and store basic network information. As the years have passed, the role of the SIM card has become increasingly important in the wireless service chain. Today, SIM cards can be used to customize mobile phones regardless of the standard (GSM, personal communications service [PCS], satellite, digital cellular system [DCS], etc.).
Enhanced Security Benefits :
SIM cards have several features that enhance security for wireless communications networks. Smart-card supporters point to the potential of limiting or eliminating fraud as one of their strongest selling points.
SIM cards provide a secure authentication key transport container from the carrier’s authentication center to the end-user’s terminal. Their superior fraud protection is enabled by hosting the cryptographic authentication algorithm and data on the card’s microprocessor chip. SIM cards can be personal identification number (PIN) protected and include additional protection against logical attacks. With added PIN code security, SIM cards offer the same level of security used by banks for securing off-line payments.
Because the home network–authentication algorithm also resides in the card, SIM cards make secure roaming possible. They can also include various authentication mechanisms for internetwork roaming of different types.
Complete fraud protection (with the exclusion of subscription fraud) can only be provided in the context of a complete security framework that includes terminal authentication, an authentication center, and authentication key management. Smart cards are an essential piece of this environment, but only the complete architecture can allow fraud reduction and secure roaming.
Finally, it should be noted that biometric smart-card applications such as voice or fingerprint recognition could be added to provide maximum fraud prevention. Smart cards could then combine the three basic security blocks of possession, knowledge, and characteristics (see Figure 2).
Easing Logistical Issues :
All subscribers may easily personalize and depersonalize their mobile phone by simply inserting or removing their smart cards. The card’s functions are automatically enabled by the electronic data interchange (EDI) links already set between carriers and secure personalization centers. No sophisticated programming of the handset is necessary.
By placing subscription information on a SIM card, as opposed to a mobile handset, it becomes easier to create a global market and a distribution network of phones. These noncarrier-specific phones can increase the diversity, number, and competition in the distribution channel, which can ultimately help lower the cost of customer acquisition.
Smart cards make it easier for households and companies to increase the number of subscriptions, thereby increasing usage. They also help to create a market for ready-to-use preowned handsets that require no programming before use.
Additionally, managing fraud is also eased by smart cards. In a handset-centric system, if a phone is cloned, the customer must go to a service center to have the handset reprogrammed, or a new phone must be issued to the customer. In a smart card–based system, the situation can be handled by merely issuing a new card; customers can continue using their current phones. The savings in terms of cost and convenience to both carrier and customer can be substantial.
Marketing Opportunities:
In addition to the value-added services they can provide, smart cards provide many marketing opportunities to network operators.
Brand Recognition
Smart cards provide means for greater brand exposure and reinforcement. The cards can be considered mini-billboards, providing frequent opportunities for the customer to be exposed to a brand name. Compared to other advertising media, they provide a cost-effective vehicle for achieving a high number of brand exposures to a targeted audience. Network operators with limited brand recognition can co-brand their cards with companies with greater brand equity to strengthen their market positions.
Customer Loyalty Programs
Smart cards can play an extremely valuable role in a carrier’s customer retention efforts. The data on a smart card is a digital representation of the customer’s habits; i.e., number of calls, services accessed, merchandise purchases, etc. This rich database of customer information makes it possible for network operators to develop highly targeted or one-to-one marketing. Carriers are then able to provide services and offerings particularly suited to their customers, increasing customer loyalty to the carrier. Direct Marketing With their convenient form factor, smart cards can be used in direct-mail campaigns to sell wireless subscriptions, both for prospecting and subscription renewal. Using temporary or prepaid smart cards, network operators have a low-cost channel for selling their services. In addition, subscription changes, renewals, and upgrades are easily handled by sending new cards in the mail (see Figure 4).
Advertising
Two services, used in conjunction with smart cards, provide network operators with possibilities for highly targeted advertising. Short message service (SMS) and cell broadcast leverage smart cards to send advertising or informational messages that appear on the handset display to wireless users.
Trial Subscriptions
Smart cards are an ideal vehicle for trial subscriptions. Programmed as prepaid cards, they can attract new customers to try wireless services with limited, defined financial risk for both the network operator and the consumer.
Incidental Revenues
Network operators issuing smart cards can generate additional revenue by selling memory space on the card to other companies. For example, available space can be sold to gas stations so that the smart card can also be used as a debit card for gas purchases. The card’s surface can also be used for imprinting the participating company’s brand, for which the carrier can receive fees for space advertising.