Wireless sets sail from Cannes

26 Feb 2003

When the GSM Congress kicks off every year in Cannes, tradition has it that if Nokia is booked into the Majestic Hotel, arch-rival Ericsson will have set up camp in the equally grand Carlton a few hundred yards along the famous resort’s waterfront, or vice versa.

However, if current market trends are any guide, both of these networking giants will have to book early in future in order to keep out an aggressive new arrival from Asia. Korean handset seller Samsung is now the third largest in the world and is among a band of electronics firms from the east that is staking a claim to leadership in the wireless arena.

For now, however, the mobile industry remains dominated by European companies, many of which were in Cannes for the wireless industry’s 18th annual shindig. If there is a recession in the sector, someone forgot to tell the 500-plus companies exhibiting at the show and the 30,000 delegates who thronged the halls all week – a 25pc jump on last year’s attendance, according to the organisers.

Although a couple of big names stayed away – most notably Vodafone and Orange – the majority of the mobile industry’s heavy hitters were there, spending hundreds of thousands if not millions of euro putting on a good show.

Some had hired yachts moored alongside the Palais des Festivals for a reported €30k to €100k for the week, while one exhibitor, Siemens, went the whole nine yards and rented an entire passenger ferry. Emblazoned in the Siemens Mobile livery, the Corsica Victoria sat out in the bay fulfilling the triple role of offshore demo centre for the German company’s latest networking gear, entertainment venue for its customers and sleeping quarters for some 200 of its staff. Siemens executives good-humouredly denied wicked rumours that customers were kept hostage on the vessel until they signed on the dotted line.

The ship was an apt metaphor for the wireless industry as a whole – no, not all at sea, but rather buoyed up by a new optimism, following the collapse of the telecoms market and doubts surrounding the prospects for 3G. For the first time in perhaps three years, the industry is feeling pretty good about itself. Not cocky, God no, but at least positive about what is happening today and the outlook for tomorrow. Yes, at Cannes 2003, there was a definite whiff of confidence in the air.

What seemed to be at the root of it was, primarily, the improving financial situation of a number of major equipment makers. “We’ve finally nailed this one behind us,” said Pascal Debon, president of Nortel Networks’ wireless division, referring to the company’s recent quarterly results that showed its first quarter-on-quarter sales increase for over two years and cash reserves standing at a handsome US$4.1bn.

In a briefing to journalists on Nortel’s wireless strategy, Debon suggested that the industry is in a healthier condition than most people give it credit for and argued that a dangerous mythology had grown up around the sector, misrepresenting the facts. “Wireless industry growth is over, data is never going to amount to much, 3G is never going to happen, 3G needs a killer app, 3G is just an extension of 2G…these are all myths,” he said emphatically.

“The truth is that the wireless industry is fast becoming a consumer business. It took 20 years to reach the one billion wireless subscriber mark; there will be two billion by 2006.”

Furthermore, 3G would happen and was already happening, he added, throwing up a chart of a world map strewn with active 3G projects, from Vodafone and Hutchison in Europe, to DoCoMo in Japan and Verizon in the US.

It was noticeable at Cannes that when 3G was mentioned it was accompanied by none of the hyperbole that used be the case two or three years back. It is no longer seen as this explosive new technology that is going to revolutionise our lives, but rather as an evolution of existing 2.5G technologies, the only difference being speed of data transmission.

The message seemed to be: it’s not the technology that matters but what you can do with it. With operators around the world spending billions rolling out new networks the pressure is on to launch the services that will generate the required return on investment.

Campbell Scott, product director O2 Ireland, which took a stand, felt that this services theme came out very strongly.
“Whereas last year’s show had two big themes, media messaging and location-based services, this year there are a lot more applications, things that make it better and easier for the customer, as well as video streaming, downloads, applications for the Symbian operating system and so on,” he said.

With O2 committed to launching a 3G service in Ireland and Germany by the end of 2003 as part of its licence obligations, Scott was obviously relieved to see a proliferation in the number of services coming to market.

Unlike 3G, a technology for which there is already proven demand is WLAN (wireless local area network), the group of technologies coalescing around the 802.11 standard that has swept all before it. Unsurprisingly therefore, Wi-Fi networks – and, in particular, how to make them pay – were another key theme at the event.

Overall, Cannes 2003 was short on surprises – no major technology breakthroughs, precious few handset launches and no record-breaking market growth. A sign, perhaps, that youthful exuberance may be giving way to a growing maturity – and no bad thing for that.
By Brian Skelly