Some 50 per cent of Europe's population will have a mobile phone by the year 2000, a conference on communications has been told. However, many operators will also have to move to newer systems to cope with demand for downloading data via mobile telephones. The conference, on the future of mobile phones, heard that already there are 55 million GSM customers in Europe. This is five million more than was estimated by the GSM MoU Association, an organisation which represents mobile operators and which has its headquarters in Dublin.

It is estimated that the figure could reach 80 per cent penetration (ie the number of people in any one country which owns a mobile phone) by the year 2020. That is almost equal to the number of fixed-line phones.

The staggering growth in the use of mobile phones has taken the world industry by surprise. Now the big debate is, how to facilitate the growing number of people who want to transmit and retrieve information using their mobile phones.

To date, it is estimated that operators have invested around $60 billion (£40.8 billion) in GSM systems. Current GSM systems can send and receive certain types of data, including e-mail and fax, but it is slow for graphic rich Internet information.

A proposed future generation of mobile phone systems, known as the third generation or Universal Mobile Telecommunications Systems (UMTS) will provide faster data throughput rates.

Existing operators will have to ensure that these networks can work to a common standard and can operate between existing and new systems.

It is envisaged that users will be able to carry out financial transactions, book seats for air travel, even change previously allotted seats, book theatre seats, hold video conference calls, use the Internet, and in some cases download local information from the Golden Pages to find certain services - all from the one mobile telephone.

It is expected that the first UMTS system will be up and running by 2002, with full global commercial implementation by 2005. It will impose exacting demands on operators and equipment providers as customers' expectations rise. "Businesses are going global, people are travelling more and more for either business or pleasure and they want to stay in touch," Ms Monika Bezler, chairman of the UMTS Forum, told the conference which was held in Cyprus last week.

She believes the long-term forecast of 80 per cent market penetration in the EU by 2020 is fully justified. She said new market players would emerge and would support the new services, but using phones for voice communication would remain the most vital part of the service.

Mr Neil Lilly, head of technology with Orange, Britain's fourth mobile phone operator, said a new system was needed. "There is an emerging world market for mobile, multimedia and related services, video, web browsing and even home shopping," he said.

Mr Lilly said one of the key drivers had to be cost reduction. As costs of mobile telephony fell, operators were seeking other ways of adding value to boost revenue.

Mr Richard Midgett, deputy chairman of the GSM MoU Association, said demand for mobile phones was growing at a phenomenal rate.

Voice connections would continue to be the service in demand he said, but there would be an increasing use of data services. "Take e-mail for example, it is rapidly becoming the norm and there has been an explosive growth in web usage in the last five years," he said.

He warned that the new system would have to be even better than existing service.

"Whenever you introduce something people always expect it to be better," he said.

He works in Hong Kong where mobile phone usage is extremely high and hand-held sets have accounted for 95 per cent of all sales every year in the last ten years. He said that although the phones were used primarily in urban environments, people expected to have coverage everywhere.

He said mobile phones were so popular that fixed-line phones were cheap - only $8 dollars per month - and many bars and restaurants did not even charge for local calls.

Hong Kong is used as a test bed for many new forms of mobile technologies as its terrain is hostile to radio communications. He said existing GSM operators should be given the opportunity to run the next generation of mobile services and there should be access to sufficient spectrum to do so. "Nobody should be prevented from applying for the licenses," he said.

However, Mr Midgett said the issue of spectrum pricing was becoming a matter of hot debate in the EU and would become an "even hotter issue".

The radio frequency spectrum is a natural resource managed by regulatory authorities throughout the world. It is governed by the International Telecommunications Union (ITU), in Switzerland.

The task of managing spectrum in Ireland is determined by internationally agreed allocations i.e. Ireland will be given a specified amount of defined frequencies. This in turn will be allocated to different operators by the new telecommunications regulator.

Meanwhile, Motorola has pioneered what it claims will offer corporate and other users the reality of the wireless offer. The system, called multilayer helps to increase capacity and coverage. Called "pico" cells, it will enable GSM network operators to provide users with the certainty of coverage and call quality throughout the interior of buildings, the street, car and home.

The system involves installing another cellular layer or picocells in high density areas, a central controller and discreet integral antennae. It can be installed in a matter of hours, once permission has been obtained for certain locally obtained frequencies.

It means that blackspots in buildings and certain areas are eradicated and calls are not dropped. The system was demonstrated in Paris earlier this month.