Kohl, Gerstner sing Internet praises at CeBIT fair
(rewritten with opening speeches, company comments)
By William Boston
HANOVER, March 18 (Reuters) - International Business Machines(IBM - news) chief executive Louis Gerstner, opening the CeBIT information technology fair on Wednesday, predicted the market for Internet commerce would hit $200 billion a year by the end of the century.
''I believe that's a conservative forecast,'' said Gerstner, keynote speaker at the world's largest technology trade show.
''It's not hyperbole to say that the 'network' is quickly emerging as the largest, most dynamic, restless, sleepless marketplace of goods, services and ideas the world has ever seen.''
German Chancellor Helmut Kohl, sharing the platform with Gerstner, also sang the praises of the Internet as the engine for new jobs and a vast global marketplace that never sleeps.
Kohl said Germany was rushing into the information age and that the booming sector would create thousands of jobs.
''Over the past two years 100,000 jobs were created in the information industry. This year alone another 90,000 new jobs are expected,'' said Kohl according to the summary of his speech.
A few hours earlier, the fair's organisers were embarrassed by the crash of a key communications network which put on hold the work of thousands of reporters, business executives and assembly workers.
''These are complicated networks and these things happen,'' said Peter Mihatsch, board member for telecommunications at German industry group Mannesmann, whose firm installed the network. He blamed the problem on the failure of a fibre optic cable.
Around 600,000 visitors are expected to attend the fair and 10,000 journalists will be on hand as nearly 7,300 companies display mobile phones, computers, and networking equipment from March 19-25 at the annual information technology fair.
Gerstner praised Internet companies like book seller Amazon.com as pioneers that were reshaping business practices, predicting huge consequences for public policy.
He urged governments to ensure that people have cheap access to the Internet and warned against discriminatory taxes on electronic commerce and that privacy be protected by allowing encryption of private and business documents.
''Governments have to encourage competition and end monopoly structures,'' he said. ''The news from across Europe is starting to be encouraging here.''
That reference to the explosion of competition in the European telecommunications industry since the market was opened in January was clearly demonstrated at the trade fair, where new phone companies held a beauty contest to show off their services and lure customers.
German telecoms newcomer Viag Interkom (VIAG.F) said it would revise its business expectations sharply higher because of the strong public response to new phone services.
''The entire market has been underestimated,'' Martin Furuseth, Viag Interkom board member, told a news conference.
''We will probably raise our estimates for customer numbers twice as high as previously seen in our business plan. There could be 100,000 to 300,000 customers this year.''
Viag Interkom, a joint venture between German utility Viag, British Telecom (quote from Yahoo! UK & Ireland: BT.L) and Norway's Telenor, said it would launch public phone services in May.
Commenting on the boom in mobile communications, Nokia (NOKSa.HE) senior vice president Anssi Vanjoki said worldwide sales of mobile phones would continue to accelerate, hitting 470 million units by the end of 2000 from just over 100 million in 1996.
Jozef Cornu, president and chief operating officer at French telecommunications group Alcatel Alsthom (NYSE:ALA - news; CGEP.PA), took the wraps off new network technology that he said would enable Internet access 100 times faster than today's networks.
''Internet business will increase exponentially, with 10 percent traffic growth monthly and the number of users worldwide doubling each year,'' he said.
The prospects for doing business increase as the networks get better, faster and cheaper to use.
''When I see all the developments in bandwidth on the Internet, I see huge opportunities for electronic commerce,'' said Hans-Juergen Mammitysch, general manager of the German subsidiary of Dell Computer Corp (DELL - news).
Dell currently generates $4 million in turnover worldwide each day through personal computer sales over the Internet. In Germany, the company's Internet sales total around $1 million a week.
Klaus Eierhoff, multimedia chief at Bertelsmann (BTGGg.F), Europe's biggest media group, said German companies were more reluctant to embrace Internet commerce, but that the times were changing.
''Electronic commerce is not the distant future for us, but already reality,'' he said. ''But we are at the beginning. We're at the place where the U.S. was two or three years ago.''
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