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Ailing wireless forced to focus on the possible

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CIOL Bureau
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Catherine Bremer

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CANNES: As the wind sent corporate yachts scuttling for cover in Cannes,

Europe's top mobile phone fair wound up a gathering dogged by concerns about

handset shortages, technology delays and debts.

The yachts remain as a symbol of corporate wealth, but the industry is being

forced to scale back its promises and focus on the possible, after operators

spent massively on licenses to offer whizzy new services like Internet access

which have yet to materialize. Gone are the futuristic flights of fancy, such as

the ability to run a bath on a command from your carphone.

The talk of some 6,000 delegates who descended on Cannes for the annual

gathering this week was of delivering impressive but more modest services such

as picture messages. Consumer interest among the young was apparent, but whether

punters will pay up for such services was another matter.

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"I've been inside and seen some of the phones; they're fantastic. The

ones with cameras are brilliant, I think sending picture postcards over a mobile

phone is a really cool idea," said 23-year old Lokman, working for a

bicycle taxi services for the congress.

"But the first ones are going to be expensive and I think the prices

will put most people off," he added.

New sobriety



The focus on new services such as simple picture messages fits with the more
modest focus of telecoms operators to make the best of what they have in order

to avoid promising more than they can deliver to consumers.

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Few of the cash-strapped telecoms operators talked about costly super fast

mobile Internet services, such as streaming video, as they tighten their belts

in uncertain economic times.

"Everybody is talking about end-user services and how to use mobile

data, which is definitely a step in the right direction," said a German

delegate, after four days of highbrow panel sessions and twilight cocktail

parties on yachts.

Text messages are the best example of how a little regarded service can

become an important revenue driver; they now generate 10 to 15 per cent of

operators' sales. Companies that offered other products and services that

operators could install right away were the most popular on the show in southern

France.

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Handspring, the US company which has combined a phone and a electronic

organizer into one, said it used old, off-the-shelf technology but still made a

device that corporate employees can immediately use to download their email on

the road, which is good for wireless telecom traffic.

Picture messaging



Somewhat farther away, but still expected before the end of this year, is
picture messaging on color screen phones. Operators can use their existing

networks to offer this service, and even today's generation of mobile users

could immediately see its appeal.

Initial proof has come from one of the frontrunners, Telecom Italia Mobile

(TIM), which has sold 1.2 million phones in a Christmas promotion which offered

rudimentary picture messaging.

Chief executive Mauro Sentinelli said it had prompted hordes of TIM's younger

employees to zap doe-eyed photos of themselves off to their sweethearts.

"This is a way to marry technology and emotion, and the reaction has been

very positive," Sentinelli said.

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