Magazine article The Spectator

Wap Is Kwap, but Keep Hoping

Magazine article The Spectator

Wap Is Kwap, but Keep Hoping

Article excerpt

GREAT powers are again struggling for dominion in Europe; except that it is a curiously modern, even 21st-century, conflict. It does have many of the hallmarks of a battle between rival chancelleries: clandestine diplomacy, strategic alliances, unexpected attacks and, above all, fearsome costs: already this year about 200 billion has been spent. Yet it is also an odd kind of war. Nobody has yet been - and nobody should be - killed. At issue is a piece of terrain the size of two ordinary postage stamps. The protagonists are not nation states, although they are quite similar. They are, rather, Europe's great telecoms powers: BT, France Telecom, Deutsche Telekom and Vodafone. However, the strangest feature of this contest is that nobody is quite sure if winning is going to be worth it.

What the great powers want to dominate is Europe's mobile Internet. Yet so far the mobile Internet has been a total disappointment. In the run-up to last Christmas, we were told to love the Wap phone and, in particular, a design from Nokia which featured in last year's top action-flick, The Matrix. It was hoped that the combination of the two hottest consumer trends in the last five years, the Internet and the mobile phone, would be a immediate hit. In fact, Wap phones have been a disaster. First, the screens are too small to display much information, a point which, oddly, the phone designers ignored. Second, the access speed, four or five times slower than a home Internet connection, is just too slow.

Third, and most important, once you're online there is nothing to do. There is no access to the full Internet because existing websites have to be rewritten and redesigned to speak Wap (that's Wireless Application Protocol, a different tongue from the Internet's HTML) and to fit on the phones' tiny screens. There are, however, uninteresting mobile websites provided by the mobile operators.

Last year, as Wap was coming into being, conflict broke out. In October 1999, the German telecoms and engineering group Mannesmann, which had built up strong positions in Germany and Italy, surprised the industry by taking over Orange, the fastest growing operator in Britain. The problem was that Britain's Vodafone had considered Mannesmann an ally: the move amounted to a declaration of war. So Vodafone's cricket-loving executives, led by Chris Gent, mounted a hostile takeover bid - the largest in history - for Mannesmann, and the Germans finally succumbed last February.

This triumph changed the rules of the game. The resulting group had a position in the European mobile telecoms market that was way ahead of rivals, with subsidiaries from Sweden to Spain, from Britain to Greece. Rival telecoms powers felt they had to catch up. Yet their problem - the problem of all great powers - was simple. Could they afford to participate in the landgrab that had begun?

In the spring, costs continued to soar. In March, Britain began an auction for five `third-generation' mobile-phone licences. The third generation (the first was analogue phones, the second, digital) is meant to solve the slow-speed mobile Internet problem. Phone-company boffins claim that third-generation networks will run at speeds at least a dozen times faster than Wap phones.

Nobody was sure how much the licences - necessary because there is only a finite number of radio spectra available - would sell for. Britain was the first country in Europe to hold an auction; Finland and Spain had also issued licences but rashly gave them away. The British auction took eight weeks and raised (L)22.5 billion, ten times more than people were prepared to predict beforehand. …

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