Telecom sector pinning hopes on GPRS

Sure, this year's CeBIT trade show doesn't have the party atmosphere of last year's event, but it's by no means a funeral. Such is the general sentiment among executives from telecommunication vendors here, most of whom attribute the hopeful mood to GPRS (General Packet Radio Service).

"Motorola has been too shy about promoting our GPRS offerings, but GPRS is here and ready now. Thanks to GPRS, we are confident in our ability to regain momentum," Robert Growney, Motorola Inc.'s president and chief operating officer told journalists here.

Along with Motorola, all of the major players in the telecommunications sector are promoting their new and upcoming GPRS offerings, including Nokia Corp., L.M. Ericsson Telephone Co., Vodafone Group PLC, WorldCom Inc., IBM Corp. and Symbian Ltd. They are all promising that the "always on" GPRS packet-data technology, which runs on GSM (Global System for Mobile Communications) networks at speeds around 40K bps (bits per second), will live up to industry promises.

Furthermore, it is the general belief that GPRS will lead the way towards solid 3G (third-generation) services as well as consumer acceptance of 3G. "GPRS is the revolution, 3G is the evolution," is now Motorola's new corporate mantra.

"People have got to start building wireless into their strategy now. Certainly, what many of us should not be doing is waiting for 3G, because GPRS is happening now," said Val Rahmani, IBM's general manager for global wireless solutions, in an interview with the IDG News Service.

For example, here at CeBIT, Nokia introduced the Nokia 3330, and two other new handsets with support for GPRS which are due to ship in the third and fourth quarters of this year, while Ericsson announced two new GPRS phones -- both featuring Bluetooth personal area networking -- and promised its first GPRS handset, the R520 is on the way to stores. NEC Corp. will this year launch the GPRS DB4300 mobile phone as well as the 256-color screen DB7000 handset, according to Laura Smith, NEC's product marketing assistant for Europe. And Motorola demonstrated its new GPRS mobile handsets: the Timeport 280, the triband Timeport 260, the large touch screen Accompli 008, the Talkabout 192 and the clamshell shaped V.series 66.

"Our industry is probably in a recession but GPRS is, I think, going to change things. It creates a single standard, which of course creates more competition but it also creates a bigger pie. I think because of GPRS, we will see a very different industry next year than we're seeing this year," said John Thode, Motorola's vice president of 3G PCS in an interview with the IDG News Service.

Symbian Ltd., which displayed version 6.1 of its operating system for GPRS devices at CeBIT, expects GPRS to significantly boost the use of mobile data services, with the GPRS networks gaining traction at the end of the year and in the course of 2002.

"Packet(-switched technology) will be the catalyst for change. It enables a different user experience," said Mark Edwards, senior vice-president of sales and marketing at Symbian, which is jointly owned by Motorola, Psion PLC, Nokia, Ericsson and Matsushita Electric Industrial Co. Ltd. Other handset makers, such as Germany's Siemens AG, have licensed Symbian's platform. About 15 operator GPRS networks are already on air in Europe and 30 operators are planning to go on air by the end of this year, according to Motorola's Thode.

Additionally, Motorola has an order from a customer for 500,000 GPRS handsets, of which 150,000 have already been shipped, Thode said. Motorola declined to announce the name of that customer, presumably a major carrier, until Monday.

Even better news for vendors pushing GPRS is the fact that attendees at CeBIT seem ready to embrace the new wireless technology as well. "I am really here to look at some of the GPRS technology," said David Pirek, a CeBIT attendee from Prague. "I like the products Nokia is showing the best."

Thode stressed that it is customer focus -- offering corporate and individual consumers services that they want to use over GPRS -- that is going to make the new standard take off in the market. "It can't be GPRS for GPRS' sake. What GPRS is, and what 3G will be, is an enabler for the types of experiences that the users want. It's applications, applications, applications," Thode said.

That is a theme echoed by IBM's Rahmani. "I still worry that a lot of (the GPRS focus) seems to be more in the technology rather than the real uses of the technology. The industry needs to focus on the real uses of the GPRS networks and then the 3G technologies," Rahmani said.

GPRS vendors are trying to make sure that not only do the GPRS phones have solid versions of new services, but that the phones and the services offered over them are more fun for the consumer. For example, the Nokia 8310 GPRS handset has a plug-in music player and Motorola showed off a range of six "product concepts," including a "Mood Hood" which would combine wireless and broadband technologies in a wearable hood that could allow users to play and share music and video.

"GPRS and ideas like the 'product concepts' demonstrates our commitment to the industry and our deep investment in trying to serve the consumer. What Motorola is doing differently for the first time is really trying to understand the consumer," Thode said.

"It will be very important for GPRS not to repeat the mistakes of WAP (wireless application protocol), and we do that by focusing on product and services, like, for example NTT DoCoMo has done with its I-Mode wireless Internet service," Thode said.

I-Mode was rolled out two years ago by NTT DoCoMo Inc. in Japan and now has 21 million active subscribers, each paying an average of US$20 per month. Analysts have pointed to the I-Mode features, and social and environmental factors along with its extensive network coverage as the reasons for its success, a lesson which is not being lost on the industry as a whole. Back at CeBIT, Fujitsu Siemens Computers BV showed a PDA (personal digital assistant) MultiMobile powered by Microsoft Corp.'s Pocket PC, boasting a GSM module supporting GPRS from one of its corporate parents, Siemens AG. Fujitsu Siemens will sell the product on the enterprise market; Siemens will handle the retail channel. Test units will be available in June, with volume shipping shortly after that. "One of the big things next year is going to be wireless communications from machine to machine. For example, a robot on a production line being able to talk to a machine in a totally different country wirelessly. And wireless e-commerce will become part of the way things function, as opposed to a standalone proposition. It will be commerce triggered by specific things, such as when a certain car is in stock," said IBM's Rahmani.

So while there is a lot of talk at CeBIT about the economic downturn in the US and its spread to Europe, most companies and executives -- with the glaring exception of Hewlett-Packard Co.'s Chief Executive Officer, Chairman and President, Carly Fiorina in CeBIT 2001's most discussed and debated speech -- are remaining cautiously optimistic.

The economic slowdown in the technology sector "had to happen. This was inevitable because there was so much that was really pure hype. But now companies need to make real money out of what's out there and what they've got today -- which includes GPRS -- and companies know that," Rahmani said.

By next year, "we'll have gotten it, if you will," Motorola's Thode said of GPRS. "And once we get used to GPRS and you see the first 3G products on the market, a lot of people will run for the doors (to join the market) as fast as they can," Thode said.

Ericsson, in Stockholm, can be reached at +46-8-719-0000, or http://www.ericsson.com/. IBM, in Armonk, New York, can be reached at +1-914-499-1900 or http://www.ibm.com/. Motorola, based in Schaumburg, Illinois, can be reached at +1-847-576-5000 or online at http://www.mot.com/. Nokia, in Espoo, Finland, is at +358-9-5113-8193, or at http://www.nokia.com/.

(Joris Evers, Ashlee Vance, Peter Sayers and Martyn Williams contributed to this report.)

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