Cannes Summary...3G Still A Facade

From Intrenational Herald Tribune Is 3G ready? Not for me.

I could tell 3GSM World Conference was a disappointment based on the few eye-catching press releases . This biggest news that came out of it was the MSFT Nokia partnership. Outside of that, nada. Music on the phone was the biggest buzz .

CANNES A golden sun drenched the beaches, and red carpets dressed the sidewalks. It was a cheerful farewell to Cannes for the 3GSM World Congress, which has been held at the Palais des Festivals here since the inception of GSM networks more than a decade ago.

Longtime conferencegoers, who have had to book hotels up to a year in advance, are looking forward to next February, when the mobile phone industry gathers for the first time in Barcelona, where rooms and conference space are more abundant.

The Cannes send-off was agreeable and gracious, the golden aura contagious: "The sun is shining on the show and on the industry," said Simon Beresford-Wylie, head of Nokia Networks.

It was a welcome change after the downbeat conferences of the past four years. But at some point over the course of the week, I realized that the glow was just a patina.

The industry's great white hope - third-generation cellular networks that can turn mobile phones into portable minicomputers - is still not ready for a mass market. Only geeks need yet apply. I, for one, am waiting until at least 2006 before I invest my own or my company's money in 3G.

That truth came out in several quiet admissions over the week. The chief technology officer of Nokia, Pertti Korhonen, said parts of 3G are still glitchy and will likely remain so through this year. Sophisticated billing systems that charge high-speed voice and data by the second or by the byte need work, he said. The handover of a signal from one 3G provider to another - or from a 2G network to a 3G one - is still unpredictable. The basics of what we have come to expect from mobile communications have not yet been mastered.

Of course, the carriers are blaming the handset makers as much as the reverse. Marco De Benedetti, chief executive of Telecom Italia Mobile, said existing "low-tech" handsets still outperform the "advanced" - and more expensive - 3G handsets that are available.

Don't get me wrong: I love my 2.5G mobile phone and its access to the Internet and e-mail and Google and news headlines on the spur of the moment. And I do believe that 3G will change daily phone habits and our communications culture and will even give PCs, cameras and digital music players a run for their money. I also believe that data charges will be huge moneymakers for carriers and the handsets a profit center for manufacturers.

But not this year.

It's too bad, because the general public has been baited with promises since 2000, when phone companies bid up the cost of licenses to offer 3G into the hundreds of billions of dollars. The industry itself is especially important to Europe's telecommunications prowess, enriching the coffers and reputations of Ericsson, Alcatel, Nokia and Siemens, to name a few.

The GSM Association, the trade group that co-sponsors the world congress, said in a report this week that the mobile industry contributed €105.6 billion, or $137.3 billion, last year to the gross domestic product of the 15 pre-expansion European Union countries.

Nearly three million jobs in those countries depend on the mobile services industry: 423,000 of them directly, 738,000 jobs in support services, and 1.6 million indirectly. Based on that level of employment, the association calculated that the mobile services industry generates €83.9 billion a year in revenue in Europe.

I don't expect 3G to change those numbers significantly this year. At a news conference in Cannes this week, Didier Quillot, chief executive of Orange France, said that the early adopters of his company's 3G service were three-quarters men and two-thirds under the age of 35. That has "geek" written all over it.

The two main complaints 3G users had in the early going, he said, concerned the range of the network and the reliability of the handsets. If there were two more fundamental problems for mobile phone use, I'm not sure what they would be.

My personal forecast is that Barcelona in 2006 will be warmer and sunnier for the industry - and for mobile phone users - than Cannes this year.

Will there be a competing technology that upstages 3G by the time 3G gets here?

I think so. Will service providers realize what it is? I don't, till it's too late.

That's the problem with technology these days. Technology is moving so fast that your timing has to be even "more" perfect. The "too early to survive, too late and you fail" motto has never been more appropriate.