Left by the wayside?, European data market remains stagnant

Despite the fact that European authorities have mandated a common regional digital cellular standard as opposed to allowing market forces to fragment national cellular standards as in the U.S., the former still lags significantly behind the latter in exploiting mobile data.

"We still have this European reticence to go for mobile computing," said Andy Keates, keynote speaker at the IBC-sponsored "Data Over GSM" conference held earlier this month in London. "We're still way behind [the U.S.] in adopting mobile computing.

Keates, marketing manager for mobile computing at Intel and chairman of the Intel-pioneered Mobile Data Initiative, said that one business PC in three sold in the U.S. in 1996 was a notebook; in Europe the figure was one in five. Intel also estimates that worldwide, there are a mere 300,000 GSM users and that these generate only 1% of total GSM revenues.

Given the bonafides of mobile data in general and of GSM in particular, this is something of a puzzle. Dean Eyers, associate director for Dataquest's European Telecommunications Group, noted that around 38% would-be mobile data business users believe they would benefit from using the technology. From a productivity point of view, data might even be easier to sell than voice, which is sometimes regarded as just a convenience.

"When we do research among users and talk about mobile voice, quite often we get the feeling that it's actually very difficult to make a business case for mobile voice," Eyers said. Meanwhile, GSM is available in around 110 countries worldwide, and 50% of all notebook PCs travel internationally.

So why the no-show for GSM data? Eyers listed lack of awareness of the technology's capabilities, the high price of early data offers, slow transmission speeds, cumbersome connectivity solutions, a lack of vertically integrated applications and inappropriate approaches to marketing. "A key thing is the lack of end-to-end packaging," he said.

Some of that is beginning to change. Familiarity with and use of non-voice communication is on the up, thanks to the success of the Internet and IP. GSM data transmission speeds are set to increase from 9.6 to 14.4 kb/s with data compression and go up to 64 kb/s with high-speed circuit-switched data, and to 164 kb/s with the generalized packet radio service when it becomes available in 1999.

Connectivity has also become easier with innovations such as software modems with serial cables, data phones and data cards in the PCMCIA format. In the U.K., three of the four digital operators are also using ISDN protocols to connect to Internet service providers, a mechanism that lowers training times from around 25 seconds to seven seconds.

"Visibility is growing from all segments of the industry - from phone manufacturers, notebook manufacturers, card manufacturers and the GSM network operators," Keates said. Still, there is a continuing need to "evangelize" the GSM data proposition, he concluded.

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