News and Information

Mobile phone bosses strike upbeat note
February 15, 2005

Mobile phone bosses strike upbeat note
By Joia Shillingford
BBC News business reporter, Cannes

Visitors looking at smartphones at the 3GSM World Congress, in Cannes
Firms hope new phones and gadgets will drive market growth

Fears that growth will fizzle out in the mobile industry after most people in the West have signed up for phones are greatly exaggerated - if this year's 3GSM World Congress is anything to go by.

In a 'fireside chat' at the mobile trade show in Cannes, Marco de Benedetti, chief executive of Telecom Italia Mobile, encapsulated the industry's mood.

"I am still very bullish on this industry," he said. "I just don't agree with the argument that now we (the mobile operators) have built up penetration, we're done."

The evidence, he said, is in the fact that "revenues are continuing to grow".

Growing markets

Other chief executives participating in the chat - drawn from mobile operators NTT DoCoMo of Japan, Orange of France and T-Mobile of Germany - indicated that non-voice revenues are growing.

Let's make sure the industry keeps growing, and we can worry about our slice of the pie later
Marco de Benedetti, chief executive, Telecom Italia Mobile

Rene Obermann, chief executive of T-Mobile, said the company's revenues for entertainment and ringtones in Europe and the US were now worth several hundred million euros.

He added that the company's US business grew by 30% and said: "We are quite relaxed about recent (US) merger activities; we intend to keep growing on our own."

Masao Nakamura, president and chief executive of NTT DoCoMo, said the company now makes 1 trillion yen a year from i-mode, the company's content service, and would have more than 10.5 million Third Generation (3G) mobile subscribers by the end of March, more than previously forecast.

Orange chief executive Sanjiv Ahuja said his company was forecasting 1 to 1.5 million 3G subscribers in the UK by the end of this year, but would not be drawn on what plans the company might have to expand geographically.

'Rock solid'

Industry executives were not without concerns for the future.

Making a call outside the 3GSM World Conference, in Cannes
The 3GSM World Conference is showcasing new technologies

Mr Obermann said his biggest challenge was implementing his 'Save for Growth' strategy, which involves cutting jobs - which is difficult given Germany's strong unions - and refocusing investment on new growth areas.

He said he was doing this to make the company "rock solid", in anticipation of industry price cuts and increased competition in the future.

"This industry has growth opportunities, but needs a different approach," he said.

NTT DoCoMo's Mr Nakamura said the company had recently introduced a flat-rate tariff for i-mode and needed to find a way of increasing revenue, beyond persuading customers to use i-mode more frequently.

"We have introduced a mobile wallet...(for example: to buy tickets), so this is the new kind of business we need to expand to grow," he said.

Future services

He also expressed concern that "in many cases, cellphones are being used for crime, and that is growing because of the phenomenal growth of mobile use".

He feels that the mobile industry must face such issues squarely or be "blamed by society".

Mr de Benedetti said that previous lessons learnt by the industry - that making networks and services interoperable can create a market fast - were being ignored for future mobile services.

"Sometimes I worry that we are all trying to go our own way, " he said.

"Let's make sure the industry keeps growing, and we can worry about our slice of the pie later."


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