Wireless firms face fear and next generation at conference
By Yukari Iwatani
CHICAGO, March 18 (Reuters) - Amid a gloomy economic outlook and a loss of investor faith in the telecommunications industry, wireless firms are poised to jump-start the momentum for the launch of next-generation technologies during the nation's largest wireless industry conference this week.
This year's Cellular Telecommunications Industry Conference, in contrast to years past, is taking place as the industry faces the dual challenge of trying to ride out the economic downturn while upgrading its technology to the next level.
Hundreds of companies ranging from start-ups to technology giants such as Motorola Inc. <MOT.N> and Microsoft Corp. <MSFT.O> are expected to unveil a slew of 2.5G and 3G products and services, from phones to combination devices to software.
These so-called 2.5 generation (2.5G) and third-generation (3G) networks are based on costly technologies that promise significantly faster Internet connectivity and multimedia capability. Current wireless networks are considered second generation.
However, analysts expect the conference to be fraught with anxiety over a possible delay in the roll-out of the next-generation networks.
Key wireless giants like Motorola and Ericsson <LMEb.ST> <ERICY.O> have recently issued profit warnings, and a wireless trade fair in Cannes last month did little but fuel concerns that new telecom networks and handsets will be delayed.
"I think that we will see vendors putting on a really happy face with this 3G story, but the underlying currents are going to be felt throughout," said Jane Zweig, chief executive of the Shosteck Group.
To add to that, the industry is also facing skepticism about its ability to generate money with the new, expensive networks.
DEBT CRISIS A POTENTIAL DANGER
In Europe, telecom operators have just spent around $100 billion to date on 3G mobile phone licenses, and they are now faced with a possible debt crisis if it cannot recover its expenses.
"We're facing a situation that an industry is possibly heading for bankruptcy ... even before a single 3G call is made," Intel Corp. <INTC.O> Vice President and General Manager Hans Geyer told the audience in Cannes.
Industry watchers fear the same could happen with U.S. telecommunications firms.
"This market is going to be much slower to take off," Zweig said. "It's going to be much more costly, and a lot of the start-ups may not even make it until that time," she added.
Wireless service providers in the United States are currently not expected to roll out their first 2.5G services until later this year. True 3G services are not expected in the United States until 2006 or 2007, according to Zweig.
Japan will be the first country to roll out 3G services in May and Europe is expected to follow in 2003. But even in those countries, experts predict that it will be another few years before the technology really takes off as a mass phenomenon.
TOO SOON TO CALL NEXT-GEN TUNE
It's too early to tell how the next-generation technologies will play out, but technology companies at the CTIA conference this week are hoping to allay these fears and present an upbeat front.
Handset makers including Nokia Corp. <NOK.N> <NOK1V.HE> and Motorola, the world's No. 1 and No. 2 mobile phone makers, respectively, are expected to unveil new models of their phones and discuss their 3G strategies.
Qualcomm Inc. <QCOM.O> will be talking about the next-generation version of its CDMA technology and wireless service providers such as Sprint PCS Group <PCS.N> and AT&T Wireless Group Inc. <AWE.N> will be touting their plans for next-generation services.
A myriad of smaller companies also will be introducing everything from mobile commerce applications to billing, and from customer care management software to information services, all designed to work optimally on 3G networks.
18:38 03-18-01 |
