Mobile, 'Net, drive telecom growth

The most important areas of growth in the telecommunications arena over the next four years will be mobile communications and the Internet, according to regulatory and industry leaders kicking off the Telecom 99 conference last week.

Speaking at the opening session of Telecom 99 here were John Roth, president and chief executive officer of Nortel Networks, Yoshio Utsumi, general secretary of the International Telecommunication Union and Erkki Liikanen, the European Union commissioner responsible for technology.

In addition to agreeing that mobile and internet communications will drive telecom growth, the three speakers also said that more cooperation is needed among national regulators on important issues, such as universal access and increased competition.

Utsumi spoke of the rapid growth in mobile communications and the likelihood that mobile communication will overtake fixed-line communication in the next few years. Fixed-line services are in decline, he said, while mobile traffic and revenue are growing at double-digit rates in many places. "If it were not for the growth of mobile cellular and the Internet, the industry as a whole would be shrinking," he said.

Utsumi credited the increasing competition in most markets as helping to spur growth in mobile communications.

"Competition (in the mobile sector) has reduced connection charges and monthly subscription charges ... making mobile affordable for even the most cost-conscious consumers," Utsumi said.

The growth of mobile telecommunications may answer one of the industry's most pressing problems - the fact that two-thirds of the world's households still don't have a telephone line, Utsumi said. Many of the households will turn to mobile telephony, thus helping to shrink the gap between those who have telephone service and those who don't.

While the internet was a major topic of discussion at the last Telecom event, held here four years ago, "today at Telecom 99 we are witnessing the coming together of the mobile telephone and Internet services," Utsumi said.

The ITU soon will be able to complete the third-generation (3G) mobile communications standard, Utsumi noted. The standard, called IMT-2000, will offer data rates three times that of today's ISDN (integrated services digital network).

Nortel's Roth focused more on the internet and the challenges ahead for it. Predicting there will likely be between 350 million and 500 million users of the internet by the time the next Telecom event is held in 2003, Roth voiced concerns about some fundamental weaknesses of the network today.

The some of the main problems, Roth said, include reliability of the network, quality of service for voice traffic, and the sluggishness of the network.

Roth added that revenue from voice telephony will decline thus no longer able to subsidise the internet. Roth pointed to e-commerce as a potential solution.

Like Utsumi, Roth sees the lack of universal access to telephony as a major barrier to continued expansion of the internet. Once the internet can be built profitably, said Roth, its growth in developing nations will follow.

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