Global telecoms hopes kept alive at Asia meeting

date: 9th December 2000, source: REUTERS

Excitement over third-generation mobile phone technology was tempered by trepidation over how to finance and profit from the wireless future at this week's huge International Telecommunications Union Asia conference.

Also making headlines - and provoking longing among would-be suppliers - was China and its phenomenal growth prospects. The world's most populous nation will have roughly 70 million mobile users at the end of this year - behind only the United States.

China's telecoms industry as a whole will double in size over the next five years, Wu Jichuan, China's top telecoms regulator, one of the marquee speakers, told the conference.

And Japan's NTT DoCoMo, operators of the only large-scale wireless Internet service, "i-mode", strutted through Hong Kong's gigantic convention centre, the envy of and example to other wireless carriers.

Under attack

"The business model is under attack," Mike Butcher, head of networking equipment giant Lucent Technologies, said following one of the more sobering addresses of the week.

Mr Butcher's point: exploding data traffic is forcing carriers to spend huge amounts, but is not generating substantial revenue or profit growth. That disconnect was helping punish valuations in the industry and making it harder for new service providers to raise capital, Mr Butcher said.

"We maybe are in trouble - the markets are telling us we are," Mr Butcher warned.

Another 3G expense that has depressed telecoms share prices, especially in Europe, is the huge amount that they have paid to governments to get licences to offer services.

As worries over revenue build, an estimated US$215 billion in market capitalisation has been wiped away in the top 10 global telecommunications firms in the past six months.

Chinese temptress

While China stood as temptress to the world's telecoms equipment suppliers, the host nation to the event also annoyed the Geneva-based ITU - "the Olympic Committee of Telecoms", as wags put it - with appearance cancellations by a handful of Chinese officials.

"We could've had many other nice ministers come and speak instead," griped one ITU official after a last-minute cancellation by Su Jinsheng, director general of the MII's telecoms administration.

One supplier's long-tortured efforts to crack China won a further boost during the week: US-based Qualcomm, developers of the CDMA wireless standard, announced a memorandum of understanding with the MII, bolstering prospects that carrier China Unicom Group will build a CDMA-based network next year.

And Sweden's Ericsson revealed plans to expand its share of China's handset market to 20 per cent from 10-15 per cent now, and pledged, with its suppliers, to invest US$2.7 billion in China by 2005.

Sensory overload

But it was the sensory assault of the exhibition halls - where scantily-dressed models, thumping music, dance routines and robots were employed to show off the latest in telecoms gadgetry - that made perhaps the week's strongest impression.

Prototypes, both simulated and operational, of 3G mobile phones were often equipped with cameras, which will allow for remote-videoconferencing.

Japan showed up with working 3G prototypes and its latest Java-enabled i-mode model, demonstrating the appeal of the Web surfing service that has now topped 15 million users in Japan logged on to the Internet on business card-sized screens.

Cash-rich from i-mode's success, NTT DoCoMo is moving at full throttle towards 3G services, which it will launch in May next year.

There were phones with Organic EL displays, a brighter light emitting display technology that uses less power and has a higher resolution than the conventional colour displays used higher resolution than the conventional colour displays used for mobile phone screens.

Amid the hype, however, was the undeniable approach of more change and competition ahead for the telecoms industry.

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