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The BBC's Rory Cellan-Jones
"It is clear that sales are still speeding ahead"
 real 28k

Tuesday, 4 July, 2000, 09:57 GMT 10:57 UK
Mobiles 'owned by 50% of UK'
Children using mobile phones
Those without mobiles are now a minority
By BBC e-commerce reporter John Moylan

This week will mark a milestone in our growing love-hate relationship with the mobile phone.

Figures released from the four mobile network operators this week should confirm that more than half the UK population now own a mobile.

A product which was once the hallmark of the wealthy and flash will have confirmed its position as the most successful consumer gadget of the past decade.

The growth of the UK's mobile phone market has been nothing short of remarkable.

In Europe only Italy and the Scandinavian countries boast higher penetration.

The introduction of pre-paid mobile phone packages boosted growth here in recent years and mobile use is expected to mushroom in Europe as these packages are adopted more widely.

But as the mobile operators toast their success, they also know it will be hard to sustain.

How are they to drive future revenue growth?

The answer lies in persuading you and me to use our phone more ... and use it differently.

Mobile internet

For a taste of what is to come, look to Japan.

A mobile phone internet service called i-mode is currently taking the country by storm.

Samsung's video mobile
Phones of the future, such as Samsung's, will carry video
It allows its seven million subscribers cheap and continuous access to the net.

It is so popular Japan is set to become the first country where mobiles are more popular than PCs for accessing the internet.

In Europe the mobile internet is in its infancy.

New WAP phones allow limited access to information held on the net.

Meanwhile companies are reporting a huge growth in the use of text messaging - 200 million messages were sent on the Orange network alone in March.

As the mobile operators upgrade their systems in the coming years these data services look set to boom.

New technologies due to be rolled out across Europe in the coming year will give mobile users a permanent connection to the internet avoiding lengthy dial up and download times.

The Third Generation (3G) networks which will follow in 2 to 3 years will deliver data transmission speeds 200 times faster than today.

The industry believes those leaps in technology will change forever how we use our phones.

But huge questions remain unanswered.

It is one thing providing new services - it is quite another persuading people to pay for them.

Anecdotal evidence suggests our first experience of the mobile internet - WAP phones - have not exactly taken the public by storm.

The limited availability of handsets, the lack of content to browse and the slow connection speeds mean the WAP experience has failed to live up to the advertising hype.

Money to burn

Meanwhile the world's mobile giants are currently gearing up for an unprecedented spending spree.

Third generation network licences are being auctioned across Europe this year - Germany's auction will commence at the end of the month.

If the prices match the 22.5bn paid in the UK, operators face massive debts if they are to win licences and build their networks in Europe and around the world.

Some believe the industry is embarking on the biggest business gamble in history.

The fall in share prices across the sector in the past month suggests some investors are less than convinced about the long term outlook.

In the end it is consumers who will seal the sector's fate.

If we can be persuaded to use our mobiles more - and run up bigger bills - the telecom giants could dominate business life in the 21st Century.

If we can not - then this week's mobile milestone may turn out to be a fleeting highpoint for one the greatest commercial follies in corporate history.

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See also:

29 Oct 99 | The Economy
Mobile sold every two seconds
09 Dec 99 | Business
The mobile internet race
29 Oct 99 | Business Basics
Mobile phones - a growth industry
30 May 00 | Business
Shifting Europe's mobile landscape
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