Russel Hayes

Health worries may have caused a collapse in confidence in genetically modified foods in the UK, but they have had little effect on the mobile phone industry.

The British based mobile communications company Vodafone, for example, has seen its profits surge by 44% to almost a billion pounds during the last year. In fact, nearly everybody in the industry is doing well and mobile phone use is predicted to double by 2001.

All that despite persistent concerns that there may be a link between the use of the phones and brain tumours.

Russell Hayes: "Health scares may worry the mobile phone industry, but the sales figures won't"

But the faith of investors in the mobile phone business may be well founded.

After a slow start, growth in mobile phone ownership in the UK has been explosive. Around 15 million people in Britain now have one, 25% of the population.

Jim Sloane, of Deloitte and Touche, comparing public health concerns over GM foods to mobile phones

Even so, the British are a long way behind other countries such as Finland, the home of the handset manufacturer Nokia, where the figure is almost 60%.

The industry believes that the UK market is a long way off being saturated and there are few signs that customers disagree.

Opting for 'safer' phones

Lurid headlines linking use of the phones with brain tumours have failed to dent demand. Sales of protective radiation shields and hands-free sets, which reduce the amount of radio waves absorbed by the brain, have risen sharply.

But as one customer told me, the research so far has not produced any hard evidence, and the mobile is just too useful to give-up.

Fashion accessory

Colour counts - the phone as fashion accessory

There is another reason for our passion for the mobile. The manufacturers have spent millions on advertising to re-invent the mobile as a fashion accessory.

Today, marketing is as likely to emphasise a phone's style and sophisticated looks as its technology. This, combined with new ways of paying for phones, like the pre-paid contracts introduced last Christmas, have created extraordinary demand from younger customers.

And as Eleanor Trickett from the advertising industry magazine "Campaign" says, "in that market peer pressure and image far outweigh any health concerns surrounding the phones".

One is not enough

All of which is bad news if you already think mobiles are the scourge of modern life. The industry is so certain of the value of its product, that it is counting on us buying not just one phone each, but two.

Telecoms analyst Jim Sloane from Deloitte Consulting says that is already happening in Scandinavia and Italy: "As services have developed people are increasingly buying one for work use and another smaller and more stylised model for private use. Each will have different tariffs and facilities".

The next generation

A new generation of mobile phones, which will come into service early in the millennium, are also expected to draw in new users.

Expanding on the some features already being offered by some of the most advanced phones, these so called G3 services, will offer users a range of desktop computer like services over the air, such as e-mail and the Internet, television and video conferencing.

Other technologies such as Cellnet's "Bluebooth", will mean mobiles can run our lives almost without the involvement of their owners.

Mobile phones have discovered the Internet

The biggest development driving the future of telecommunications is the demand for ever-increasing capacity to support the transmission of computer and business data and traffic from mobile phones.

After more than a century of stable development, the structure of the telecoms industry is undergoing a convulsion.

The once dominant fixed lines are being displaced by mobile communications. One result of this is a wave of multi-million dollar mergers, as operators and manufacturers vie for global dominance.

Soon Vodafone will become part of that, if as expected, it gains final approval for its £67bn takeover of Airtouch of the US.

It will create the world's first truly global mobile phone company, able to carry calls on its networks in Europe, Asia and parts of the US.

The future is bright...

This month the Western European mobile phone market reached a total of 110 million users - with 16 million of them joining in the first four months of the year.

As one British mobile phone advert puts it, the future is bright.

The one cloud on the horizon is the health scares.