Attempts by European mobile phone operators to create a cross-border mobile payment system for purchasing goods and services have failed, following the decision by a founding member to withdraw from the program.

Members of Simpay decided Friday at a general meeting not to pursue the roll-out of an "m-payment" system on a European scale as initially planned.

Instead, Simpay's operations will be scaled back with "immediate effect", the group said, adding that member operators will be able to use the group's intellectual property rights at a national level.

In 2003, four of Europe's largest mobile phone companies, Orange, Telefonica, T-Mobile and Vodafone, launched the Mobile Payments Services Association, which they later renamed Simpay. Its goal was to allow customers connected to one of the four networks to pay for a product or service and have the cost debited from prepaid credit or added to a monthly phone bill.

In 2005, Simpay announced the addition of two new members, Amena and Proximus, amid plans to launch the new m-payment service commercially in mid-2005. Earlier this month, rumours emerged in the German press that T-Mobile planned to abandon Simpay and pursue its own system.

Although T-Mobile declined to confirm whether it had abandoned the group, a T-Mobile spokesman said the group is more interested in an "open Internet-based system rather than Simpay's Walled Garden approach".

Vodafone plans to use Simpay technology "in some form or another in its numerous markets," said company spokesman Jon Earl. "All the work done in developing this technology hasn't been wasted entirely." One of the reasons why Simpay failed is that "it proved too difficult to implement internationally," Earl said.

In a comment published by the German university press agency UniPressedienst, Professor Key Pousttchi, head of the mobile commerce group at the chair of business informatics and systems engineering at the University of Augsburg, said the collapse of Simpay could open the door for efficient and effective mobile payment systems on a national level.

"According to our research, national but all-embracing and user-friendly solutions have better prospects for market breakthrough of payment with cell phones than the Simpay strategy had," he wrote.