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Mr Erkki Liikanen

Member of the European Commission, responsible for Enterprise and the Information Society

"Mobile Services in Europe: Current Challenges and Future Perspectives"

IST Information Day - 2.5G-3G mobile applications

Brussels, 19 September 2001

Ladies and gentlemen,

The main subject of today is the IST Programme Initiative for Mobile 2.5 and 3G services and applications, which has already been presented and discussed throughout the morning.

I would now like to present what the Commission is doing to foster the conditions which will enable future digital mobile services to thrive,

  • firstly concentrating on the economic and regulatory aspects and then

  • the support for research activities.

Where are we now?

The telecoms sector remains, in spite of current difficulties, one of the most dynamic sectors in the European economy. It has significantly contributed to the general economic growth of the EU. (European telecom service market in 2000: €200bn, 12.5% growth)(1).

Mobile communications is the main driving force behind this growth: 30% of total telecom service revenues(2), 240 million GSM users(3), penetration rate around 70% on average in the Community(4). Overall there is a positive job creation effect, despite recently announced cutbacks of mobile technology suppliers.

The Commission is confident in the 3G market perspectives and in order to support European competitiveness and leadership in this sector the Commission is undertaking a series of actions in different fields.

The future introduction of 3G networks will allow the creation of a whole new range of wireless services. By combining the two main technology drivers of recent years the Internet and mobile communications 3G can have a tremendous impact on Europe in both societal and economic terms.

Nevertheless, we are now facing 3 challenges:

  • The global downward trend in high-tech and telecom stocks that started over a year ago is continuing. The devaluation of technology stocks, notably "" stocks, reflects the current uncertainties of the markets towards the future developments of this sector;

  • High 3G license costs and fragmentation of licensing conditions;

  • Uncertainty deriving from the fact that the market for new wireless applications remains largely untested.

It is this third challenge, which is at the heart of today's discussion.

More particularly, a common challenge to all players of the mobile services game is the need to be creative and daring in developing and testing new business models. To be successful, these must have a clear user orientation and will require new partnerships amongst all (old and new) members of the mobile services value network.

Let's be clear about it: on whatever technical platforms applications and services will be successfully developed, tested and tried: at the end of the day, in the market place people will only use services, which are attractive in terms of content and for which they are also ready to pay for. And they do not pay attention to the technology behind.

The main question now is: what needs to be done to ensure that Europe maintains its lead in wireless communications and services ?

3 things ( as presented in the Commission's Communication of March 2001 on the Introduction of 3rd Generation (3G) Mobile Communications in the European Union)

    facilitating the deployment of 3G

    getting the new regulatory framework right

    supporting future digital wireless services

1. Facilitating the deployment of 3G networks under current legislation

As we all know, 3G licences have already been granted in most of the Member States on the basis of the existing national and Community law.

However, a number of important regulatory questions are now emerging in the radically changed financial context. Questions such as network infrastructure sharing or the treatment of delays in fulfilling deployment obligations, are being raised on a daily basis in several Member States. There is a risk of increased fragmentation of the regulatory environment in the EU unless co-ordinated European approaches are sought.

For this reason, the Commission launched last April a dialogue with the Member States and other stake-holders (operators, equipment providers) to address these questions at the European level, following up on its Communication on 3G. We can find a European added-value here, instead of each Member State trying to find its own solutions for similar problems.

Clearly, the responsibility for the licences that have been issued remains with the Member states. However, the Commission can act as a facilitator and encourage the Member States to seek co-ordinated solutions.

Some positive effects of this dialogue are already visible. In particular, the possibility of permitting network infrastructure sharing has now been explored with positive results in several Member States. The German regulator recently took a rather open position and set out guidelines for operators who want to pursue sharing schemes. In Sweden, the Netherlands and Belgium the different options available are also being discussed.

The results of such a dialogue will be useful not only in view of finding immediate solutions for 3G services. They may also help in defining future licensing modalities with the aim of minimising the negative effects of fragmentation in the future and to tackle the issues related to the organisation of further licensing rounds.

This brings us to the second essential element to ensure the success of wireless communications in Europe: getting the new regulatory framework right.

2. Getting the new regulatory framework right

As there are limited possibilities for intervention under the present framework, it is essential to get the future one right!

This means to set in place regulation that will help us address licensing issues in the future in a more co-ordinated way between Member States. Still the regulation should be flexible enough to keep up with the pace of technological change while providing at the same time the necessary legal certainty to operators.

    Avoiding over regulation

    The new rules seek to limit ex-ante regulation to the minimum necessary while in the long run relying more on competition rules. This is a necessary condition to create the sound investment context the industry needs in view of the increasing initial cost for the implementation of new and innovative services.

    The adoption of flexible but harmonised procedures is essential to tackle rapidly changing technical and market conditions.

    This brings me to the last part of my intervention: how can we build a bridge to future wireless services and technologies?

3. Actions in support of future wireless services

Together with setting the right regulatory environment, continued support for research activities and for the development of European customised multimedia content for wireless applications is key to the success of future wireless services.

    IST Work Programme 2001/2002:

    To underpin our efforts in the area of research, we have launched this additional Call for Trials in Work Programme 2001. Since the market for new 3G services remains largely untested, it is vital for all interested parties to gain experience with the new technologies and the new market.

    The challenge is therefore to ensure a smooth transition between 2G and 3G (GPRS, EDGE will provide a useful test in this respect), not only in terms of infrastructure but also services, from voice oriented 2G services to multimedia context-aware 3G services. Therefore, this initiative aims at supporting Trials of 2.5-3G applications and services at a pan-European level.

    In addition to this dedicated call, other instruments such as accompanying measures and clusters of existing projects can be used to reflect on further enhancements to the regulatory framework.

    A complementary cross programme action in the IST Work Programme 2002 is under discussion.

    Research The IST Priority of the 6th Framework Programme:

    The private sector, the Member States and the Community need to maintain a high level of research for future wireless technologies. In its proposal for the 6th Framework research programme (2002-2006), the Commission proposes to strengthen the priority for research for wireless technologies.

    A radical shift from the current « PC based » systems and from the "keyboard, mouse and screen" towards almost invisible technology of natural and effortless use is expected.

    The proposal includes a massive research effort to:

    • embed electronic components and devices in everyday objects and to build networking and computing technologies that have enough bandwidth and performance for interconnecting such components everywhere and at anytime.

    • develop interfaces that use our natural senses (touch, smell, speech and gesture) for easy and effective interaction with knowledge-based applications and services.

    This approach is strongly supported by industry and the research community.

    There is a clear opportunity for Europe to build on its technological and industrial strengths in areas such as mobile communications, consumer electronics and embedded software.

    3G systems and services constitute the first step.

    eEurope Action Plan:

    From the users perspective 3G is important not so much as a technology but rather as an enabler of new services and applications. Users are interested in the content they get, not in the technology.

    It is crucial that we have favourable conditions for the creation of digital content in all European languages. People are unlikely to pay for services that are not available in their own language.

    The main responsibility for content creation is of course within industry, but the eContent programme that the Council adopted last December will provide for incentives for multi-lingual European content production.

    The first call for proposals of the eContent programme was a success with many good proposals. The evaluation took place in July 2001 and out of 116 submitted proposals 19 have been selected for negotiation(5).

    The use of public sector information is also becoming increasingly important. Geographic information, traffic information or meteorological information can provide important material for value-added, location based services for mobile devices.

    Internet Protocol version 6:

    A fully-fledged Mobile Internet where every terminal would have its own internet address will not become a reality unless we move gradually to a new Internet Protocol, IPv6. With the current protocol, IPv4, we will run out of addressing space in the near future. IPv6 will offer limitless address space and allow the Mobile Internet to become a reality.

    The Commission launched a Task Force whose objective is to develop a comprehensive action plan by end 2001, aiming at ensuring the timely availability of IPv6. (The IPv6 Task Force members are senior representatives of relevant European industries).

Future Perspectives

A vision for the future is the emergence of multi-modal services, which are seamlessly delivered across a diverse range of channels/devices (mobile terminals, digital TV, PC, wearables, embedded devices, …).

Key features will include situation and context sensitivity (location awareness), as well as personalisation.


The Commission remains confident in the development of the future wireless communication and services of which 3G is an important step.

In my intervention, I have highlighted some of the challenges lying ahead and the developments of regulatory approaches to cope with them. It is the task of the European Commission, among other players, to foster an environment which is supportive of new technologies and new applications. My objective is to continue sustaining this effort.

Based on Europe's broad acceptance of and user experience in mobile communications as well its large cultural diversity mobile services are bound to become a European success story provided the other conditions are also good (economic, legal/regulatory, competition, pricing, consumer protection, security, …).

Today we are offering you, through this call, an opportunity to co-operate in the exploration of future mobile services. The launch of 2.5G services may prove to be a crucial step for the satisfactory uptake of 3G, offering reliable insights into the future market for true 3G services and building up an initial customer base.

I encourage you to participate by submitting ambitious proposals, which involve the key players in the sector and which are, therefore, capable of influencing the course of events.

Thank you for your interest in this Information Day and I wish you success in this call and in the overall 3G mobile challenges.

(1) Source: EITO 2001 (European Information Technology Observatory)

(2) Source: EITO 2001 (European Information Technology Observatory)

(3) Source: Mobile Communications August 2000 / August 2001

(4) Source: Mobile Communications August 2000 / August 2001

(5) Call 2 will open in November 2001.

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