Philipson column for 23 January 2001.doc by lovemacromastia


									Philipson column for 23 January 2001

Mobile phones have become as ubiquitous as mobile timepieces. Indeed, one market
study has found that in Finland there are actually more mobile phones than wristwatches.

Finland leads the world in mobile phone penetration, but the rest of the world is not far
behind. The other Scandinavian countries are right up there, as are some Asian markets
like Singapore and Hong Kong, and of course Australia. Market penetration figures
change daily, but there are now as many mobile subscribers as fixed line subscribers in
many parts of the world.

Mobile phones have enabled many countries with poor telecommunications
infrastructures to leapfrog into the 21st century. Telephony is now available to hundreds
of millions of people where no landlines have been laid. I loved the recent photo in this
newspaper of the semi-naked Indian holy man clutching a mobile phone to his ear.

Mobile phones are called just that in Australia - though I find that I am now calling mine
my "moby". In Singapore they are called "handphones", and in the USA "cell phones". It
is a testament to how quickly the technology has become popular that there is no
common term. It may also be a function of the fact that the USA has trailed the rest of the
world in mobile technology, preventing any mobile Americanisms from entering world

Mobile telephony, like most other forms of electronic communication, is now digital.
And that means it can be married to other forms of digital communication, such as the
Internet. So far, so good. It seems a short step to using mobile phones as Internet

But it is not so simple. The first halting attempts at combing mobile telephony with the
Internet have appeared, and the results are less than outstanding. Mobile phone
companies around the world have spent massive amounts of money on new technologies
and greater bandwidth, but there are increasing signs that usage levels will not justify the
investments, and that we will see many carriers fail, and many dashed hopes and broken
dreams, before portable wireless Internet access becomes commonplace.

The first attempts have been with a technology called WAP, which stands for wireless
application protocol. WAP is an attempt to use existing mobile phone technology to
access the Internet. It has failed dismally, because of two simple problems.

The first is that existing mobile phones simply do not have the bandwidth for decent
digital communications. You can tell this from the voice quality, which is often very poor
and degrades significantly as bandwidth drops, as it does when you move from areas of
strong signal to areas of weak signal. It's also a function of how many other people are
using the same cell.
Mobile phones have a comparatively short range - just a few kilometres, depending on
conditions. They switch from cell to cell (hence the name cell phone) as you move
around, which is why there are so many of those attractive towers everywhere. The
bandwidth of the current ("second generation") technology of mobile phones is lucky to
reach 20 kilobits per second (kbps), which is sufficient for voice communication, where
some degradation is tolerable.

But non-voice digital communications allows for no degradation. This means speeds are
even lower. WAP communications are laughably, even impossibly slow. Add to that
problems caused by the very small screens on current mobile phones, and they are
practically useless as Internet devices.

WAP allows for some Internet screens to be displayed on mobile phones, but the
limitations of low speed and small displays mean they are impractical for any reasonable
use. The phrase "WAP is crap" has already entered the lexicon.

Enter so-called "third generation" (3G) mobile phones. The 3G standard is being
developed in Europe, and promise much higher bandwidths (up to 400 kbps and
eventually 2000 Mbps), with phones with liquid plasma displays that will be like little
mini TV screens. The technology is marvellous, and not too far away.

But there is a major problem, at least in Europe. Carriers have spent billions of dollars in
buying the bandwidth necessary to run 3G services. The money spent servicing the debts
they incurred in so doing cannot now be spent on research and development, or customer
service, or marketing. Mobile usage will increase, but revenue per customer will decline.
Profits will disappear, and many players will go out of business.

In the USA the situation is even worse. The bandwidth is simply not available, having
been staked out by TV operators years ago. The Japanese seem to have it right, but their
technology does not travel well. Shares in mobile phone companies around the world
have plummeted as reality sets in.

In Australia, we can't be sure what will happen, because we have a government that
simply has no idea about digital technology. We also have some carriers who, to put it
mildly, have unreal expectations. Eventually all this will sort itself out, but don't expect to
be surfing the Net from your phone for quite a few years yet. Who wants it anyway?

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