New phone fad hits market

AFP HELSINKI

As sales of mobile phones dwindle across Europe, Nokia and other struggling telecom groups are pinning their hopes for a recovery on new technology now hitting the market featuring high-speed wireless Internet connections and multimedia messaging services incorporating sound and photos.

The newest fad in mobile phones, called General Radio Packet Services, is intended to bridge the gap between the current generation of GSM mobile phone services and the next generation, called third generation or 3G.

"This year will see the arrival of a number of new exciting products and services," Nokia chief executive Jorma Ollila said as he presented Nokia's annual earnings report in January, holding up GPRS handsets with radios, digital cameras and music players.

All of the big mobile phone makers - Sony-Ericsson, Siemens, Motorola and Nokia - have already launched their first GPRS phones on the market, though more affordable handsets with additional features are expected this autumn.

But whether the new technology will be the success Ollila and the rest of the telecom sector hope for remains to be seen.

On Nokia's home turf, many tech-savvy Finns remain skeptical.

"GPRS will be a flop, just like WAP (Wireless Application Protocol)," said a senior Finnish government official who asked to remain anonymous but who carries no less than two Nokia handsets on him at any given time.

"We won't bother with it, we'll go straight to 3G instead," he added.

The third generation was initially meant to have been launched in Europe by now, but it has been repeatedly delayed and is now forecast to hit the market sometime in 2004 or 2005.

With the launch as elusive as ever, many think GPRS will meet many of 3G's expectations.

While 3G's super-fast wireless Internet connection allows users to watch live video, GPRS, which builds on WAP technology, offers mobile Internet, e-mail and multimedia messaging or MMS, incorporating sound and still images.

"With services like mobile e-mail and Internet surfing, whenever and wherever you are, you can really do an ad-hoc organization of your day, you can basically there and then make the decision how to proceed and who to contact," said Raimo Kantola, a telecommunications professor at the Helsinki University of Technology.

GPRS also offers a theoretical data transmission rate of up to 172 kilobytes per second, almost 20 times faster than current GSM phones, but in practice it will be closer to 30 to 50 kilobytes per second, said Karri Rinta, telecom analyst with Evli Bank.

For operators, adapting their networks from GSM to GPRS consists basically of a software upgrade, which represents a minimal investment that allows increased traffic on their GSM networks and the possibility of huge profit margins on new services.

Since GSM networks are already congested, GPRS will also finance the rollout of 3G networks, which are compatible with GPRS and GSM standards.

In Japan, services similar to GPRS have been all the rage, with 4 million subscribers over the past 18 months hooking up with operator J-Phone's handsets with photo messaging, featuring embedded low-resolution cameras.

Even more impressive has been the success of rival DoCoMo's popular i-mode standard for mobile Internet, ringing up 31.3 million subscribers in three years.

Those numbers are music to the ears of Ollila, who will soon launch Nokia's first handset with a large color screen and built-in camera, enabling users to surf the Internet and send and receive MMS.

The Finnish Association of Electronic Wholesalers expects these services to be so popular that it has forecast that 80 percent of the mobile phones sold in Finland by the end of the year will be GPRS handsets.

However, whether it will be such a success remains to be seen, according to Kantola.

"Nobody can know beforehand if it will be a flop or not," he said.

"The bottom line is that GPRS is a good service, and a worthwhile addition to GSM."