Five years ago, anyone suggesting that mobile phones would become ubiquitous in our society, crossing gender and class, would have risked been laughed at, but today the forecasts tell a different story. By 2004, it is confidently predicted that one-third of all Europeans will regularly use their mobile phones to access Internet services. In North America this year, about 70 million WAP phones are expected to be sold, compared to a projected 45 million PCs.
These forecast figures show that wireless communication is going to be the next big growth industry. In Ireland, the picture is the same. Eircell reached its millionth customer in March and, when this statistic is combined with Digifone's figures, it is safe to assume that up to one-third of the population uses a mobile phone. When one remembers how long the mobile market has been in existence, these are extraordinary figures.
The characteristics of the mobile phone make it an ideal tool for Internet access. It is a very personal device and most people keep them close to hand at all times. For many it is more than a phone, it is a fashion statement. The young, in particular, have adopted the mobile as an essential accessory. As such it makes sound economic sense to target the mobile market as the next growth area for the Internet.
Mobile service providers such as Eircell and Digifone see the delivery of Internet information services as the next step in the evolution of their businesses. The recent launch of e-merge by Eircell underlines this fact and the success of SMS (short messaging service) with younger users illustrates the potential niche markets that exist.
The launch of WAP (Wireless Application Protocol) is the first significant step on a road that will ultimately lead to mobile devices and services that are currently in the concept stage. Third generation (3G) devices with extremely fast wireless communications delivering video and sophisticated services will become the norm. WAP phones allow users to send and receive text and browse adapted web sites, but are limited by the small amount of data that can be sent to them. Third generation phones will have much higher bandwidth, increasing the amount of data they can receive and send.
The value of owning a slice of the 3G market was graphically illustrated by the recent auction of 3G licences in the UK. It is widely reported that the cost per customer for the licence and the subsequent network infrastructure required is potentially £6,000 or more.
This is a huge investment for the successful bidders the size of which could lead to a shake-up in the market. Another consequence is that pressure will mount on phone manufactures to produce consumer devices as soon as the network is ready in order to recoup their investment as soon as possible.
It is not clear when the 3G licenses will be available in Ireland but more than likely it will happen this year. A decision has not being made about the method of selection but an auction is not the preferred method of the current players in the market as it could seriously undermine their financial ability to delivery a cost-effective service.
In the meantime, GPRS (general packet radio service), due to arrive in Ireland next year, will bring more power to mobile devices, but without many of the costs faced by 3G. Digifone and Eircell are in the process of upgrading their respective networks and will be ready to deliver these technologies to the consumer as soon as the phones become available.
Third generation devices promise capabilities beyond the Internet access that WAP phones offer today.
At the heart of the 3G phenomenon will be new handsets and a new way of using them. Users will not just talk to it any more, they'll be able to view video, listen to music, play games and surf the Net.
While Japan was slow to adapt to mobile phones, the Japanese are ahead in the delivery of new mobile technology and it is worth monitoring the progress there for indications of future trends in Europe. The next few years promise to be very interesting in mobile technology - and it's only just starting.
jgannon@irish-times.ie