TELECOMS: Manhattan mobile mystery
Telephone technology has leapt ahead in Europe while the US has been complacent. Why are so many Americans still queuing at phone booths?
On a recent trip to New York, I tried a small experiment. In a London street a few days before, I had happened to notice six passers-by in a row talking on mobile phones. Could this be repeated in Manhattan?
Not a chance. The traditional phone booths at every street corner were as busy as ever. But on a 20-minute stroll, I saw maybe half a dozen mobiles in all, and most of them were clunky old analogue handsets, not the slim digital ones favoured by Londoners.
Americans, of course, notice the same thing in reverse. But most of them regard it as a quirk, a local oddity. It would not occur to them that they are being left behind. For how could America be left behind, especially by Europe?
This is a curious illustration of US complacency. Mobile telephony is, by any measure, a vital industry: stuffed with high technology, fast-growing and global in reach.
Who would have thought, then, that the world's biggest mobile phone operator would be British, or that it would have taken over a leading Californian rival this year?
Again, take the manufacture of handsets. Is it not odd that the world's leading supplier should be Finnish, and that America's finest, Motorola, should be consigned to the second rank with Ericsson of Sweden?
The next big step in this industry, of course, is internet access. How this will evolve is not yet clear. But the technology underpinning it is, if not strictly European, at least transatlantic.
Thus, the standard whereby next-generation mobile phones will browse the internet - so-called Wireless Application Protocol, or WAP - was developed a couple of years ago by Motorola and Unwired Planet of the US, together with Nokia and Ericsson of Europe.
Again, the standard whereby mobile phones talk to mobile computers, known as Bluetooth, was developed in the first instance by VLSI Technology, the Silicon Valley chip maker. But four months ago VSLI was acquired for $1bn (œ590m) by Philips, the Dutch company.
As for how the internet is displayed on mobile devices, there is still no accepted standard. There are various candidates, one of which - of course - is Microsoft.
The striking fact is, however, that Microsoft's Windows CE interface is not the front-runner. That position - for now, at any rate - goes to the Epoc system, developed by the UK company Psion and taken up by a global consortium known as Symbian.
How far America's big players grasp all this is not clear. Mr Gates, it seems, has not got it at all. In London last week, he reportedly dismissed the idea of mobile phones and the internet. Try doing your homework on one, he said.
Craig Barrett, chief executive of Intel, seems to differ. Spending $1.6bn last week to buy DSP Communications, an Israeli maker of chips and software for mobile phones, he remarked: "Our vision is that the internet will increasingly go wireless."
Or take today's uncrowned king of US telecoms, Bernie Ebbers of MCI WorldCom. Mr Ebbers does not carry a mobile and, until lately, he was of the opinion that he did not need a mobile phone operation either.
There was perhaps an echo here of Mr Gates, who until four years ago was unimpressed by the internet. But at the start of this year, Mr Ebbers had his conversion. His $115bn purchase of Sprint this month was prompted largely by the desire to acquire Sprint's US mobile phone business.
At the same time, Mr Ebbers took the opportunity to be rude about Europe. Most European telecommunications companies, he said, would not survive a deal with an American one. "If you bought Deutsche Telekom today," he added, "you would be buying the German government."
Now, here is complacency and no mistake. In relation to Europe's old national telephone companies, Mr Ebbers may have a point. The vast armies employed by France Telecom and Deutsche Telekom are still technically civil servants. Say no more.
But it is worth recalling that earlier this year, when Mr Ebbers first saw the light on mobile telephony, he tried to buy AirTouch of California. Vodafone of the UK bought it instead.
Mr Ebbers has, to that extent, missed the boat. He may have bought Sprint for $115bn of his highly rated paper. But if he ever wanted to buy Vodafone, he would have to pay nearly double that, and in cash.
When Americans look at Europe, they tend to see a divided region, hamstrung by government cartels and red tape. But mobile telephony is a technology which goes above all that. The only thing governments control is the spectrum; and in Europe, as in the US, that is being auctioned off on an explicitly competitive basis.
Mobile telephony is thus a rare example of a business in which Europe can punch its weight: not merely because of technical standards, but because it can behave, like the US, as a genuinely unified market.
There is a parallel of sorts with Monsanto and the saga of genetically modified foods. Two weeks ago, the head of the company found himself effectively apologising to European activists for arrogance and complacency.
Monsanto's error lay in assuming that because the technology had been widely accepted in the US, European countries would roll over. In the event, European consumers balked collectively.
The result is not merely that US growers of GM corn and soya are shut out of European markets. Some US consumers are reportedly getting nervous of a technology that Europe, rightly or wrongly, has rejected.
Over the past decade, America's ascendancy has been based largely on its technological strength. That strength is still overwhelming. But in one or two quite important areas, the ground seems to be shifting. Once again, who would have thought it? |
