Copyright 2001 Crain Communications Inc.
Global Wireless
November 1, 2001, Thursday
SECTION: Pg. 1
LENGTH: 933 words
HEADLINE: Newcomers duck out before 3G party begins; Drastic European consolidation predicted
BYLINE: Matt Hilburn
BODY:
MADRID, Spain-It is hard to believe that just about a year ago, starting a new mobile-phone company in Europe seemed like a good idea. A booming stock market and hugely inflated hopes for short-term third-generation (3G) revenues meant start-ups across Europe had no problem raising capital to finance the purchase of 3G licenses. All of Europe seemed set to witness a boom in mobile-phone competition and science fiction-like services unheard of on a continent previously dominated by lumbering, state-owned telecom companies.
Today, finding good news about 3G in Europe is about as hard as finding a 3G handset, and the high hopes for an era of competition and low-cost services seem nothing but a pipe dream.
Some of the would-be new players are starting to leave the stage before the show even starts. In Spain, 3G licensee Xfera ''froze'' further investments and announced plans to lay off a large chunk of its staff, and in Norway, Broadband Mobile, another licensee, declared bankruptcy. Most experts agree that these two ventures represent just the tip of the iceberg.
''I believe the main part of the start-ups will never get into the air,'' said John Strand of Copenhagen, Denmark-based Strand Consulting, a leading consultancy in the mobile-phone market. ''These two are not going to be isolated cases. If you look at the costs, license and infrastructure are the cheapest part. The most expensive part is to get the customers, and these companies don't have even one.''
The idea of further spending is difficult to contemplate for all cash-strapped telecom firms across Europe, and for start-ups like Xfera and Broadband, which have no revenues, more cash outlays are anathemas.
''It's particularly acute for the new entrants. They have no infrastructure and no cash flow,'' said Morten Singelton, a telecom analyst with Williams De Broe in London. ''It's a start-up business, and when you're playing catch-up, it looks particularly bleak for the start-ups.''
Morten said that in the current climate, the old monopolies are showing their strengths, largely because they have existing income and large customer bases.
''I think it is fair to say that there is a lot of convergence needed,'' he said. ''There currently is only one pan-European player, Vodafone, and there is a need to take more of these national operators into Europe-wide scales.''
Some analysts, such as Michelle de Lussanet at Forrester Research in Amsterdam, the Netherlands, go so far as to predict that Europe will see only five survivors when the dust has settled.
''Our research said there would be major consolidation,'' she said.
While the analysts may disagree about who and how many will survive, they are all in agreement that consolidation to achieve the economies of scale necessary for successful rollout of 3G services will happen and that it will be sweeping.
''There are five mobile operators in Denmark, which has only 5 million people,'' said Strand. ''You can't make money from that.''
''There's only one that's making money, and it's the one that bought the old monopoly,'' Strand added, referring to TDC Mobile.
While consolidation may be inevitable and necessary to build economically viable operations of necessary scales, there is not much momentum for mergers and acquisitions (M&A) given the current economic picture.
''We're not seeing much in the way of M&A due to the current conditions,'' said Singelton. ''Everything has been going against these licenses since the German and U.K. auctions.''
MVNO side show
In time, mergers, acquisitions and bankruptcies will surely reduce the number of players in Europe, thus reducing competition. While government regulators, who had hoped to spawn competition by bringing more operators to the market, are seeing that idea backfire, there could be some room for competition from mobile virtual network operators (MVNOs), such as Virgin in the United Kingdom. These companies rent excess bandwidth and resell it, but most analysts agree MVNOs won't offer the kind of competition many had hoped for.
''One could argue that the innovations will not take place on the networks, but outside of the network,'' said Lussanet. ''You can question whether one brand suits all.''
Strand is adamant that MVNOs are not viable, and in particular, add little to increased innovation, something he sees as the most important aspect of rolling out new services.
''They don't make money on interconnectivity,'' he said. ''Australia had 18 (MVNOs), and now there are one or two. Last summer, in Norway there were 14, and there are four now. They add very few services and normally attract the low-end customers. Also, if you look at the costs for starting even an MVNO, it's not that much less than trying to build a new operator, and one could even say that MVNOs help the existing operators as the operators won't have to deal with as many customers directly and won't have to market their services.''
According to Strand, competition is not necessarily a good thing and gives the Danish example as evidence.
''You could say that the Danish market is the most competitive in the world,'' he said. ''But with such fierce competition, the companies have to concentrate more on keeping customers rather than investing in expanding and improving services.''
Strand goes on to say that scale of business is vital.
''Some say that content is king,'' he said. ''Content is not king-scale of business is. The regulators believe that competition will make things cheaper for the end users, and it is the opposite."
GRAPHIC: A London shopper compares mobile phone prices at a store called The Link.
LOAD-DATE: November 15, 2001
Copyright 2001 Crain Communications Inc.
Global Wireless
September 1, 2001, Saturday
SECTION: Pg. 6
LENGTH: 678 words
HEADLINE: Business before pleasure for Europe's mobile Internet
BYLINE: Matt Hilburn
BODY:
MADRID, Spain-As Europe holds its breath for third generation (3G) and the science-fiction applications it promises, the first successful exploitation of a wireless Internet will most likely be realized in areas many people will not notice.
As with mobile phones, the early adopters of wireless applications will be businesses, and while back-office interface may not be as sexy as interactive games, most experts agree business applications have the potential to make a lot more money. Even more compelling to this argument is that none of this depends on Universal Mobile Telecommunications System (UMTS) technology.
"The consumer applications are over-hyped with stuff like you're walking down the street, and you pass a Starbucks, and you get beamed a 10-cent-off coupon," said Martin Dunsby, a London-based partner and wireless leader with Deloitte Consulting. "These are not realistic drivers for carriers. What drives revenue is pretty boring stuff like field service and field sales support, where you get big benefits to business and more revenue for operators."
With mobile penetration rates reaching nearly 60 percent across the Continent, Europe presents an excellent opportunity for businesses to exploit the wireless Internet. These applications present an immediate way for businesses to empower their front-line workers and streamline a variety of systems, thus reducing costs and improving service.
"These applications can be used from the truck driver level all the way up to the CEO (chief executive officer)," said Chris Barnard, research manager of IDC's European eBusiness and Networking Group based in Amsterdam, the Netherlands. "The trucker will be able to have route changes wired to him, while the CEO can receive the most up-to-date information before a big meeting or presentation."
Dunsby agreed these applications will be beneficial, but represent only the tip of the iceberg.
"A lot of organizations are structured with front-line people who have the facts, and back-office people who take those facts and stick them in systems and then tell the front-line people to go do this. With mobile, you've got the potential for the front-line people to interact with (back-office) system(s)," he said.
"These large amounts of data and huge chunks of business processes are what really drive revenue."
Speed is unnecessary
Diversified revenue streams are vitally important to carriers, many of which are saddled with tremendous debt in the wake of 3G auctions. Corporate users will not only have much higher average revenue per user (ARPU) than the average consumer, but many of the applications of use to businesses can be delivered over GSM and General Packet Radio Service (GPRS) networks.
"There's no need to wait for 3G," said Dunsby. "Many of these applications are not dependent on bandwidth."
Still, there are hurdles to overcome. The lines between carriers, software developers and systems integrators are all being blurred, and this presents new challenges in coordinating how to work together.
"Carriers need expertise in business processes, and application developers need facilities to test products," said Dunsby. "There are lots of things carriers are going to have to look at, such as application hosting, content production hosting and brokerage services, to name but a few."
And while bandwidth may not be a concern, there remain technological inadequacies.
"It's a problem given how stupid most of the devices are and how they depend on being connected for most, if not all the information they provide," he said. "The device has to be intelligent enough to accept data and provide information even when there is no coverage."
Despite the obvious advantages the development of business applications present to the whole spectrum of those involved in creating wireless applications, to focus solely on the corporate customer will be to one's own peril.
"Businesses will provide the bedrock," said Barnard. "You need a critical mass of business users and as many consumers as possible."
LOAD-DATE: September 17, 2001
Global Wireless
September 1, 2001, Saturday
SECTION: Pg. 6
LENGTH: 678 words
HEADLINE: Business before pleasure for Europe's mobile Internet
BYLINE: Matt Hilburn
BODY:
MADRID, Spain-As Europe holds its breath for third generation (3G) and the science-fiction applications it promises, the first successful exploitation of a wireless Internet will most likely be realized in areas many people will not notice.
As with mobile phones, the early adopters of wireless applications will be businesses, and while back-office interface may not be as sexy as interactive games, most experts agree business applications have the potential to make a lot more money. Even more compelling to this argument is that none of this depends on Universal Mobile Telecommunications System (UMTS) technology.
"The consumer applications are over-hyped with stuff like you're walking down the street, and you pass a Starbucks, and you get beamed a 10-cent-off coupon," said Martin Dunsby, a London-based partner and wireless leader with Deloitte Consulting. "These are not realistic drivers for carriers. What drives revenue is pretty boring stuff like field service and field sales support, where you get big benefits to business and more revenue for operators."
With mobile penetration rates reaching nearly 60 percent across the Continent, Europe presents an excellent opportunity for businesses to exploit the wireless Internet. These applications present an immediate way for businesses to empower their front-line workers and streamline a variety of systems, thus reducing costs and improving service.
"These applications can be used from the truck driver level all the way up to the CEO (chief executive officer)," said Chris Barnard, research manager of IDC's European eBusiness and Networking Group based in Amsterdam, the Netherlands. "The trucker will be able to have route changes wired to him, while the CEO can receive the most up-to-date information before a big meeting or presentation."
Dunsby agreed these applications will be beneficial, but represent only the tip of the iceberg.
"A lot of organizations are structured with front-line people who have the facts, and back-office people who take those facts and stick them in systems and then tell the front-line people to go do this. With mobile, you've got the potential for the front-line people to interact with (back-office) system(s)," he said.
"These large amounts of data and huge chunks of business processes are what really drive revenue."
Speed is unnecessary
Diversified revenue streams are vitally important to carriers, many of which are saddled with tremendous debt in the wake of 3G auctions. Corporate users will not only have much higher average revenue per user (ARPU) than the average consumer, but many of the applications of use to businesses can be delivered over GSM and General Packet Radio Service (GPRS) networks.
"There's no need to wait for 3G," said Dunsby. "Many of these applications are not dependent on bandwidth."
Still, there are hurdles to overcome. The lines between carriers, software developers and systems integrators are all being blurred, and this presents new challenges in coordinating how to work together.
"Carriers need expertise in business processes, and application developers need facilities to test products," said Dunsby. "There are lots of things carriers are going to have to look at, such as application hosting, content production hosting and brokerage services, to name but a few."
And while bandwidth may not be a concern, there remain technological inadequacies.
"It's a problem given how stupid most of the devices are and how they depend on being connected for most, if not all the information they provide," he said. "The device has to be intelligent enough to accept data and provide information even when there is no coverage."
Despite the obvious advantages the development of business applications present to the whole spectrum of those involved in creating wireless applications, to focus solely on the corporate customer will be to one's own peril.
"Businesses will provide the bedrock," said Barnard. "You need a critical mass of business users and as many consumers as possible."
LOAD-DATE: September 17, 2001
Copyright 2001 Crain Communications Inc.
Global Wireless
March 1, 2001, Thursday
SECTION: Pg. 1
LENGTH: 1314 words
HEADLINE: Spain to witness first 3G launches
BYLINE: Matt Hilburn
BODY:
MADRID, Spain-Last March, when the Spanish government's beauty contest awarded Universal Mobile Telecommunications System (UMTS) licenses to Telef nica M viles, Airtel, Amena and Xfera, third-generation (3G) services seemed set for smooth sailing. Spain was ahead of other countries in awarding licenses, and the August 2001 rollout of services-a stipulation of the contest-seemed feasible. In fact, Spain was slated to be the first country in the world to receive 3G handsets. Since then, however, as in much of the rest of Europe, the future of 3G services in Spain has hit some major turbulence.
The first controversy to rock Spain included charges of government favoritism in awarding licenses just days before national elections. This provoked talk of re-examining the legality of the beauty contest among companies that did not receive licenses, but protests have since faded.
The government then riled licensees by calling for a steep annual fee for spectrum use, the brunt of which would be paid by mobile providers. To many, this seemed an attempt to recoup cash following the low prices charged for the Spanish UMTS licenses.
''Spain licenses were dirt cheap compared to what was paid in the U.K. and Germany,'' said Nigel Hawkins, a telecom analyst with Williams de Broe.
The annual levy issue still remains to be ironed out in Brussels, Belgium. But Maria Rotondo, a telecom analyst at Banco Santander Centro Hispano (BSCH), said its estimates have Telef nica M viles paying e234 million (US$216 million) from 2001 onward, although this amount and what other licensees will pay is subject to change.
While the supplemental spectrum fee is a uniquely Spanish issue, Spain shares many of the same problems with its European telecom counterparts. First and foremost is finding who will supply handsets.
''We've been asking everyone to supply,'' said Concepcion Gutierrez, UMTS service manager at Telef nica. ''At the moment, we're completely open.''
Then there is the vital question of standardization and availability of upper-level services, such as banking, m-commerce and content. Hawkins underscores the importance of data to the success of 3G services.
''If someone thinks they're going to get their revenues from voice, they'd be wrong,'' Hawkins said.
But how this will be solved remains to be seen.
''There has to be trust between the providers and the content providers, said Dr. Brian Subirana, an associate professor for information systems at the IESE business school in Barcelona, Spain. ''In Japan, i-mode was able to get together a lot of companies to support the service, and I don't see that happening in Europe.''
For its part, Telef nica recently signed a deal with Indiqu to provide interactive games over Telef nica's e-mocion wireless Internet platform. In a further attempt to promote the capabilities of mobile Internet, it rolled out the first nationwide system of 2.5-generation (2.5G) or General Packet Radio Service (GPRS) technology on 18 January. ''That was an important step to show people what they can do with a mobile phone,'' said Gutierrez. ''We think that little by little we can show people. We have to show them.''
The operator also opened a high-tech mobile phone demonstration room to offer a glimpse of services currently available as well as a peek into the 3G future.
That future remains uncertain, but there are some good signs that 3G will take off, just perhaps not as quickly as many thought. The country has mobile-phone penetration levels of 62 percent, which is comparable to average European levels. Internet penetration is low compared with the rest of Europe, which could point to higher demand for mobile Internet services, such as messaging, an increasing source of income for operators.
Rotondo thinks 3G services will take off in Spain and sooner than Telef nica Chief Executive Officer (CEO) Ignacio Aller's prediction that affordable widespread services would not be available until 2003.
''I think it will be offered massively by late 2002,'' said Rotondo.
Things are moving ahead. Nortel recently installed the first piece of commercial 3G infrastructure in Spain for Airtel, which says it will offer pilot services by August. While there will surely be more bumps in the road, Subirana sums up the Spanish 3G situation best.
''We tend to overestimate the short-term impact (of technology) and underestimate the long-term impact,'' he said. ''I think the (3G) revolution will be beyond science fiction.''
LOAD-DATE: March 19, 2001
Global Wireless
March 1, 2001, Thursday
SECTION: Pg. 1
LENGTH: 1314 words
HEADLINE: Spain to witness first 3G launches
BYLINE: Matt Hilburn
BODY:
MADRID, Spain-Last March, when the Spanish government's beauty contest awarded Universal Mobile Telecommunications System (UMTS) licenses to Telef nica M viles, Airtel, Amena and Xfera, third-generation (3G) services seemed set for smooth sailing. Spain was ahead of other countries in awarding licenses, and the August 2001 rollout of services-a stipulation of the contest-seemed feasible. In fact, Spain was slated to be the first country in the world to receive 3G handsets. Since then, however, as in much of the rest of Europe, the future of 3G services in Spain has hit some major turbulence.
The first controversy to rock Spain included charges of government favoritism in awarding licenses just days before national elections. This provoked talk of re-examining the legality of the beauty contest among companies that did not receive licenses, but protests have since faded.
The government then riled licensees by calling for a steep annual fee for spectrum use, the brunt of which would be paid by mobile providers. To many, this seemed an attempt to recoup cash following the low prices charged for the Spanish UMTS licenses.
''Spain licenses were dirt cheap compared to what was paid in the U.K. and Germany,'' said Nigel Hawkins, a telecom analyst with Williams de Broe.
The annual levy issue still remains to be ironed out in Brussels, Belgium. But Maria Rotondo, a telecom analyst at Banco Santander Centro Hispano (BSCH), said its estimates have Telef nica M viles paying e234 million (US$216 million) from 2001 onward, although this amount and what other licensees will pay is subject to change.
While the supplemental spectrum fee is a uniquely Spanish issue, Spain shares many of the same problems with its European telecom counterparts. First and foremost is finding who will supply handsets.
''We've been asking everyone to supply,'' said Concepcion Gutierrez, UMTS service manager at Telef nica. ''At the moment, we're completely open.''
Then there is the vital question of standardization and availability of upper-level services, such as banking, m-commerce and content. Hawkins underscores the importance of data to the success of 3G services.
''If someone thinks they're going to get their revenues from voice, they'd be wrong,'' Hawkins said.
But how this will be solved remains to be seen.
''There has to be trust between the providers and the content providers, said Dr. Brian Subirana, an associate professor for information systems at the IESE business school in Barcelona, Spain. ''In Japan, i-mode was able to get together a lot of companies to support the service, and I don't see that happening in Europe.''
For its part, Telef nica recently signed a deal with Indiqu to provide interactive games over Telef nica's e-mocion wireless Internet platform. In a further attempt to promote the capabilities of mobile Internet, it rolled out the first nationwide system of 2.5-generation (2.5G) or General Packet Radio Service (GPRS) technology on 18 January. ''That was an important step to show people what they can do with a mobile phone,'' said Gutierrez. ''We think that little by little we can show people. We have to show them.''
The operator also opened a high-tech mobile phone demonstration room to offer a glimpse of services currently available as well as a peek into the 3G future.
That future remains uncertain, but there are some good signs that 3G will take off, just perhaps not as quickly as many thought. The country has mobile-phone penetration levels of 62 percent, which is comparable to average European levels. Internet penetration is low compared with the rest of Europe, which could point to higher demand for mobile Internet services, such as messaging, an increasing source of income for operators.
Rotondo thinks 3G services will take off in Spain and sooner than Telef nica Chief Executive Officer (CEO) Ignacio Aller's prediction that affordable widespread services would not be available until 2003.
''I think it will be offered massively by late 2002,'' said Rotondo.
Things are moving ahead. Nortel recently installed the first piece of commercial 3G infrastructure in Spain for Airtel, which says it will offer pilot services by August. While there will surely be more bumps in the road, Subirana sums up the Spanish 3G situation best.
''We tend to overestimate the short-term impact (of technology) and underestimate the long-term impact,'' he said. ''I think the (3G) revolution will be beyond science fiction.''
LOAD-DATE: March 19, 2001
Copyright 2001 Crain Communications Inc.
Global Wireless
May 1, 2001, Tuesday
SECTION: Pg. 12
LENGTH: 567 words
HEADLINE: Telefonica's lucrative Brazilian adventure
BYLINE: Matt Hilburn
BODY:
MADRID, Spain-Telefonica's mobile subsidiary, Telef nica M viles, has found growth opportunities outside Spain. Latin America-particularly Brazil's largely untapped market of 170 million people-could well be a gold mine.
Last year, consolidated revenue for the Spanish mobile operator rose 47 percent in Latin America, thanks mainly to Brazil, which accounted for US$2.36 billion. Cell-phone penetration in Brazil hovers around 14 percent, but could grow to about 35 percent by 2005, according to some estimates.
Nigel Hawkins, a telecommunications analyst with Williams de Broe in London, described Brazil's wireless market as ''a messy affair,'' due to the large number of operators, but he sees rapid consolidation during the next couple of years, which will result in four or five players remaining.
''(Telefonica's) policies are to consolidate their holdings,'' Hawkins said. ''I think they are in a reasonably strong position.''
In fact, in early April, Telefonica announced a purchase of Spanish electric giant Iberdrola's interests in several Brazilian fixed-line and wireless operators, such as Tele Sudeste Celular and Tele Leste Celular, in a stock deal valued at more than US$300 million.
But in what has been the biggest consolidation to date in Brazil, Telefonica and Portugal Telecom (PT) reached an agreement earlier this year to cooperate in a US$10 billion joint venture. The agreement will join PT's interests in Telesp Celular (Sao Paulo) and Global Telecom (Santa Catarina and Paran ) with Telefonica Movile's stakes in Tele Sudeste Celular (R o de Janeiro and Esp rito Santo), CRT Celular (Rio Grande do Sul) and Tele Leste Celular (Bah a and Sergipe).
The move will give the two companies the largest market penetration in Brazil, with coverage of more than 9 million customers in Brazil's most prosperous regions. Within these areas, there are 94 million potential customers.
''With PT and our holdings, we'll have the largest network in Brazil, and we're in the states in Brazil that hold the highest amount of GDP (gross domestic product),'' said a Telefonica spokesman. ''With fixed lines in Sao Paulo, we'll have 70 percent of the GDP in Brazil.''
Telefonica is not alone in seeking to capitalize on Brazil's potential. Telecom Italia, for example, has purchased three wireless licenses in the recent 1.8 GHz auctions. The licenses give Telecom Italia virtually full geographical coverage of the country, something the Spanish giant does not have, and could provide a serious challenge to Telefonica's dominant position.
Another competitor for Telefonica is Telecom Americas, a three-way partnership between Mexico's Telmex, Bell Canada International and U.S.-based SBC Communications. Telecom Americas recently took a significant stake in Tess, a wireless operator serving Sao Paulo, Brazil's wealthiest and most industrialized state.
Despite the lack of licenses, the Telefonica-PT joint venture held from the start that buying licenses was not fundamental to its Brazilian strategy. In fact, many analysts said the best way to gain nationwide coverage in Brazil's wireless market is to acquire existing companies. ''Licenses are exchangeable,'' said Hawkins.
''There's a larger philosophy to increase holdings,'' said the Telefonica spokesman. ''That will provide cost savings, synergies and a single brand that will be to our advantage.''
LOAD-DATE: May 22, 2001
Global Wireless
May 1, 2001, Tuesday
SECTION: Pg. 12
LENGTH: 567 words
HEADLINE: Telefonica's lucrative Brazilian adventure
BYLINE: Matt Hilburn
BODY:
MADRID, Spain-Telefonica's mobile subsidiary, Telef nica M viles, has found growth opportunities outside Spain. Latin America-particularly Brazil's largely untapped market of 170 million people-could well be a gold mine.
Last year, consolidated revenue for the Spanish mobile operator rose 47 percent in Latin America, thanks mainly to Brazil, which accounted for US$2.36 billion. Cell-phone penetration in Brazil hovers around 14 percent, but could grow to about 35 percent by 2005, according to some estimates.
Nigel Hawkins, a telecommunications analyst with Williams de Broe in London, described Brazil's wireless market as ''a messy affair,'' due to the large number of operators, but he sees rapid consolidation during the next couple of years, which will result in four or five players remaining.
''(Telefonica's) policies are to consolidate their holdings,'' Hawkins said. ''I think they are in a reasonably strong position.''
In fact, in early April, Telefonica announced a purchase of Spanish electric giant Iberdrola's interests in several Brazilian fixed-line and wireless operators, such as Tele Sudeste Celular and Tele Leste Celular, in a stock deal valued at more than US$300 million.
But in what has been the biggest consolidation to date in Brazil, Telefonica and Portugal Telecom (PT) reached an agreement earlier this year to cooperate in a US$10 billion joint venture. The agreement will join PT's interests in Telesp Celular (Sao Paulo) and Global Telecom (Santa Catarina and Paran ) with Telefonica Movile's stakes in Tele Sudeste Celular (R o de Janeiro and Esp rito Santo), CRT Celular (Rio Grande do Sul) and Tele Leste Celular (Bah a and Sergipe).
The move will give the two companies the largest market penetration in Brazil, with coverage of more than 9 million customers in Brazil's most prosperous regions. Within these areas, there are 94 million potential customers.
''With PT and our holdings, we'll have the largest network in Brazil, and we're in the states in Brazil that hold the highest amount of GDP (gross domestic product),'' said a Telefonica spokesman. ''With fixed lines in Sao Paulo, we'll have 70 percent of the GDP in Brazil.''
Telefonica is not alone in seeking to capitalize on Brazil's potential. Telecom Italia, for example, has purchased three wireless licenses in the recent 1.8 GHz auctions. The licenses give Telecom Italia virtually full geographical coverage of the country, something the Spanish giant does not have, and could provide a serious challenge to Telefonica's dominant position.
Another competitor for Telefonica is Telecom Americas, a three-way partnership between Mexico's Telmex, Bell Canada International and U.S.-based SBC Communications. Telecom Americas recently took a significant stake in Tess, a wireless operator serving Sao Paulo, Brazil's wealthiest and most industrialized state.
Despite the lack of licenses, the Telefonica-PT joint venture held from the start that buying licenses was not fundamental to its Brazilian strategy. In fact, many analysts said the best way to gain nationwide coverage in Brazil's wireless market is to acquire existing companies. ''Licenses are exchangeable,'' said Hawkins.
''There's a larger philosophy to increase holdings,'' said the Telefonica spokesman. ''That will provide cost savings, synergies and a single brand that will be to our advantage.''
LOAD-DATE: May 22, 2001
Copyright 2001 Crain Communications Inc.
Global Wireless
July 1, 2001, Sunday
SECTION: Pg. 17
LENGTH: 590 words
HEADLINE: Contrasting opinions on m-payment's potential
BYLINE: Matt Hilburn
BODY:
MADRID, Spain-As many European mobile-phone markets inch closer to saturation levels and as voice calls become more commoditized, European mobile providers are seeking other products and services to boost sagging bottom lines. One of the great hopes is mobile payment-the ability to use a mobile phone to pay for anything from a can of soda to insurance.
''If someone thinks they're going to get their revenues from voice, they'd be wrong,'' said Nigel Hawkins, a telecommunications analyst at Williams de Broe in London. ''They are going to have to seek out other revenues in order to pay for the 3G licenses.''
In May, most of the leading banks and all the mobile operators in Spain announced a plan to invest some 7 billion pesetas (US$35.9 million) into a standardized system of m-payments. While other European countries have m-payment schemes in place-some by banks, some by operators and some by start-ups-the Spanish agreement is the most inclusive.
While those who study the mobile-phone industry agree that m-payment will become an important source of revenue, there are varying views on when and how. While operators are jumping into m-payment schemes across the continent, two of the leading technological research firms, Forrester and IDC, have differing views on the speed at which m-payment will grow.
Forrester, for example, takes a cautious approach. In a recent report titled ''Mobile Payment's Slow Start,'' the firm predicts that m-payment will account for only 0.5 percent of consumer spending by 2005.
''That the mobile phone will become your wallet works well in a lab setting,'' said Michelle de Lussanet, an Amsterdam, the Netherlands-based analyst with the firm. ''But the kinds of initiatives necessary to make this happen on a broader scale do not happen overnight; for one, there are no standards.''
De Lussanet said the Spanish model recently unveiled offers some promise in that banks and mobile operators have agreed to work together on one standard, but added that alone does not guarantee success. She cited technological hurdles that need to be overcome to increase the speed and ease of m-payment. Perhaps most importantly, she said there will be a need to change behavior and increase the perception of security.
''Only 8 percent of mobile-phone users said that they were comfortable using the mobile to pay,'' she said. ''Consumers don't change their habits so fast.''
IDC, while sharing some of Forrester's concern about standards, the need for banks and operators to work together, and changing consumer habits, is more optimistic and calls for banks and operators to jump into m-payment now.
''There will be some 270 million mobile-phone subscribers in Europe by the year 2003,'' said Chris Barnard, research manager of IDC's European eBusiness and Networking group in Amsterdam. ''That is one of the significant drivers.''
Barnard also cited upward trends in e-commerce throughout Europe and claimed m-commerce is not a far jump from that.
''People are used to getting their mobile-phone bills with a breakdown between data and voice, so I think people will be open to m-payment billing,'' he said. ''Mobile devices are very much a part of who you are, and banking readily translates to mobile devices, especially minor payments.''
M-payment will become part of the mobile landscape, but as with any new technology, the benefits to consumers, banks and operators will take time to become clear.
''It will be evolutionary rather than revolutionary,'' said Hawkins.
LOAD-DATE: July 09, 2001
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