Asia poised to lead high-speed wireless Web phone race

Asia poised to lead high-speed wireless Web phone race

SINGAPORE (AP): Telecommunications companies are taking heat
for paying tens of billions of dollars for rights to high-speed
wireless Internet services in Europe, which some consider a
colossal gamble on an unproven future market.

But in Asia - where speedy Web phones are about to make their
world debut - there is little talk of impending disaster.

Because of cheaper licenses and more technically advanced and
uniform digital phone networks across the region, many believe
Asia's business risks will be fewer and that Asians will get a
cheaper and better product than most Europeans and North
Americans.

The arrival of so-called third-generation, or 3G, mobile phone
technology has created both rational and irrational exuberance
across the globe, with telecoms spending billions on the
technology they say will put wireless Internet in the palm of our
hands at speeds 100 times faster than what's currently available.

"Wireless technology is probably better positioned to be
rolled out in Asia," says Steven Yap, director of communications
at iamasia.com, a Hong Kong-based Internet research company.
"There's greater standardization in Asia than the U.S. or in
Europe."

Third-generation mobile phones will in fact be handheld
computers - capable of making phone calls, sending e-mail,
broadcasting movies, playing video games, even taking digital
photographs.

So a tourist on the Great Wall of China can snap a digital
photo of herself, send it via e-mail to her mom in Pittsburgh and
then call to confirm reception - all with the same gadget. She
can also use it to ask directions to the Starbucks cafe in
Beijing's Forbidden City.

There are concerns, though, that only the rich will be able to
afford such devices. And some analysts worry that 3G's chances of
becoming dominant may be hurt by a current technology, that of
Japan's wildly popular "i-mode" phones, or by a steppingstone
technology.

Most telecommunications companies are now upgrading networks
to the steppingstone system, known as Global Packet Radio Service
(GPRS). It is designed to transmit data four to six times faster
than the current standard, or about as fast as a 56K modem on a
personal computer.

Unlike today's wireless phones, handsets using this technology
will be able to play news and movies through streaming video. And
that has some analysts predicting it may become such a hit that
consumers won't want to bother spending money to upgrade to 3G.

In theory, 3G will be so fast it will seem instant. But in
reality, 3G networks in big, busy cities like Tokyo and Bangkok
could eventually become clogged just with phone calls, said Geoff
Johnson, research director of Gartner Group Pacific.

Meanwhile, Japan's i-mode technology could build up a
worldwide constituency that could hurt 3G's chances. More than 17
million Japanese already use i-mode phones to exchange text
messages, send animated figures and surf Web sites, and NTT
DoCoMo is working to take i-mode global this year.

But i-mode has limited bandwidth and can't do streaming video.
So DoCoMo is banking on 3G, too. The company will be the first in
the world to launch 3G services - this May in the Tokyo area.

More than $100 billion was spent in Europe last year for the
rights to airwaves necessary to implement 3G services. Analysts
say it will cost another $80 billion to upgrade Europe's existing
digital phone networks.

Most expect it to be cheaper to upgrade in Asia, but costs are
difficult to estimate.

In Asia, auction prices will be significantly lower and many
countries, including Japan, are opting instead for "beauty
contests" that allocate licenses to what regulators deem the most
qualified companies.

In South Korea, where half the population has a mobile phone,
two licenses were sold in December for dlrs 1 billion each and
the government has plans to allocate another for a similar sum.

Singapore is due to auction four licenses in April or May at
the starting price of S$150 million (US$86 million). Taiwan plans
an October auction and Hong Kong is still debating its timing.
Singapore, Hong Kong and South Korea plan to launch commercial
services early in 2002.

Steppingstone GPRS services will be launched gradually
throughout the region this year in what Lucas Chow, CEO of
Singapore's leading mobile phone operator, SingTel Mobile, says
is "to give people a taste" of what's to come.

Asia has the advantage of having the world's newest digital
phone networks, which will be cheaper and easier to upgrade than
those in Europe and North America.

In the United States, 3G services will likely be two years
behind Asia because of its "severely fragmented wireless market,"
said Gartner's Johnson.

Some U.S. carriers are currently upgrading their networks to
offer higher speed wireless services, but others need additional
capacity before they can start delivering fast wireless Internet
and video. Many will have to wait for another set of U.S.
licenses to go on the auction block this fall.

Chow, of SingTel, believes 3G's most compelling application
will be "voice portals" that let people command wireless gadgets
to surf the Internet.

A recorded voice will ask questions like "What city?" or "What
stock?" and then read results.

Chow believes voice portals will be popular with Chinese
speakers, whose handsets seldom have Chinese characters for text
messages.