James Ashton
We've made some changes
to The Sunday Times
A HANDFUL of mobile-phone executives were given a good excuse to peel away early from Tuesday’s awards dinner at the floodlit Palau Nacional in Barcelona.
As comedian Graham Norton presided over the Mobile World Congress event with mock excitement, for everything from best handset to best mobile game, a newcomer to the four-day jamboree was hosting a select drinks party in the National Arts Museum close by.
Whereas Apple excited delegates last year with the promise of its iPhone, this time it was the turn of Google. Four chipmakers excitedly showed off prototypes to the crowds of how its search engine might look on a phone handset.
By the end of the week, Google had quietly updated its mobile software-development kit, the code users need to build and run Android applications, which is posted on its website. The pace is clearly accelerating towards the first “Gphones” being shipped by the year-end.
Why now? Higher-resolution mobile-phone screens mean the business of reading and navigating through detailed search results is possible, says Rich Miner, Google’s mobile-platforms chief.
More importantly, faster data-connection speeds mean an industry well versed in covering up for today’s failings by getting misty-eyed over the future is finally delivering on a years-old promise to introduce broadband on the move.
Arun Sarin, the chief executive of Vodafone, admitted as much when he clambered onto the stage to give his annual keynote address on Tuesday morning. Asked what “the new, new thing” was, he unapologetically talked about “the old, old thing” that has long plagued operators keen to kick beyond talking and text messages. “If we look at the whole chain of things that have to be right before mobile internet takes off, I feel we are there,” he said, citing better handsets and user interfaces. Vodafone is sitting on £2 billion of annual data revenues.
Ericsson, which builds many of the high-speed mobile networks, reported an eightfold increase in 3G data traffic last year. Sarin predicts there is much more to come. He said: “At this stage we are just whetting the appetite of our consumers. There is something magical about saying we can offer them one megabit per second.”
The difference is down to high speed packet access (HSPA), the technology rolled out on top of the 3G networks that were expensively assembled but fell short of early expectations. Flat-rate cost plans have also had an effect, so consumers pay for the internet in the same way they would at home.
Many customers no longer even bother to buy a phone to go mobile. 3UK, which claims its HSPA coverage reaches 90% of the population, has seen strong demand for its “dongles”, which plug into a laptop to connect to the internet. In recent months, the gadgets have been selling in similar volumes to its phones.
The opportunity, particularly in emerging markets, is huge. Leonid Melamed, boss of the Russian mobile firm MTS, predicts there will be 50m mobile internet customers in the former Soviet states in the next five years.
And in countries such as India that never got nationwide fixed-line phone networks, many users will never get broadband other than over a mobile connection.
Back in Europe, how long will it be before mobile operators are displacing fixed-line networks for broadband access as well as voice calls? As he watches home broadband speeds accelerate from a bog-standard two megabits per second skywards, Sarin is doubtful they will.
“Can we compete with 50 megabits? We can’t,” he said. “I don’t think it is the right aspiration. Saying we are going to do things on a very thin sliver of spectrum the same way as over fibre – that is not the right game for us to play.”
However, Carl-Henric Svanberg, the chief executive of Ericsson, disagrees. “We can access the internet from our mobile network as fast and efficient as we can on a fixed network. It is just as convenient.”
James Barford at Enders Analysis acknowledges the success of laptop data cards and dongles, but is less gung-ho than many in the industry about the immediate prospects for wider use.
“In terms of browsing the internet, that is difficult unless you have a large handset like the iPhone,” he said. “There are some specific tasks such as checking a map or calendar that work, but not wading through the treacle of the mobile-browsing experience. On a compact handset, that is unlikely to be mass market for years.”
That hasn’t stopped internet firms such as Yahoo and Microsoft, as well as Google, bumping up against Nokia, the world’s largest mobile-phone maker, in the rush to fine-tune operating systems and internet platforms they hope will eventually carve out new revenue streams.
Nokia’s mobile-phone chief, Kai Oistamo, is relaxed about the challenge. Championing Ovi, the company’s own suite of services that include maps and music, he said: “The consumer chooses rather than this being something we shove down their throats.” With Microsoft forecasting it will this year ship 20m smart phones – with an inbuilt computer – Oistamo believes competition will intensify. “That’s the way it’s going to be more and more,” he said.
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