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Mr Erkki Liikanen
Member of the European Commission, responsible for Enterprise and the Information Society
"The vision of a mobile Europe"
Mobile Europe 2002 Conference
Bremen, 18 March 2002
Ladies and gentlemen,
In June 2000, EU leaders adopted the eEurope 2002 Action Plan. This marked their strong commitment to accelerating Europe's transition to the knowledge economy. eEurope is a success:
Yet more efforts are needed: first, to increase productivity in the economy; and second, to achieve greater efficiency and equity in public services. For this reason, I welcome the decision by the Barcelona European Council to extend eEurope until 2005. I see five core priorities for eEurope 2005:
These five priorities will set the basis for an ubiquitous knowledge society opened to everybody, anywhere, anytime. Mobile communications play a central role in this scheme. They are, and will remain, a key priority for the Commission.
Today, I will expose you my vision of the future of mobile communications and the role of the Commission:
I will start with a stock-taking exercise, to evaluate where we stand.
I will go on to describing the EU approach regarding mobiles and how it supports the development of 3G.
Finally, I will try to see with you what the future of mobiles might be.
1. State of play
The worldwide success of mobiles is striking: cellular subscribers have now caught up with the number of fixed lines at around one billion. More than two thirds of them use Europe's GSM technology.
The situation in Europe is outstanding: in a decade, mobiles have conquered three quarters of the EU population. This compares to about half of the population in the USA and Japan. For most of us, the GSM phone has become an intrinsic part of our daily life. Who could imagine his life without it?
Interestingly, mobile growth is linear in the USA and Japan, while it is exponential in the EU and in China. Of course, the penetration rate is still low in China, and the growth potential in absolute numbers cannot be matched considering the size of the Chinese population.
But it is clear from these figures that 2G mobiles are a very strong European asset. They set the ground for the development of new mobiles services, beyond voice telephony: the success of SMS and downloads of ring tones and icons point at a formidable growth potential.
The way forward is clear: we must build on the 2G technological and industrial success to extend Europe's leadership to the next generation of mobile communications: first 2.5G, then 3G. Unfortunately, a number of obstacles have appeared on the way:
This is all making the transition to UMTS very challenging. But there is also ground for optimism:
However, this doesn't mean that UMTS will automatically overcome these obstacles and rapidly impose itself. Technology in itself doesn't sell: never has, never will, however good it may be.
The average customer is not interested in technology. What customers want are products and services which entertain them, which simplify and improve their lives. If technology doesn't do that, it has no appeal.
This makes it clear that contents, services and applications are decisive for the development of 3G. There isn't yet enough emphasis on this dimension. This also hinders the take-up of 2.5G. The problem is, 2.5G was expected to ease the transition to 3G and accelerate its take-up.
2. EU support to mobile development
Developing contents, services and applications is primarily up to the market. But government can help.
The EU has played a pro-active role in the development of mobiles since the beginning. 2G wouldn't be the success it is without an ambitious, coherent and forward-looking EU policy.
Compared to 3G, the case for 2G was different. The service existed: voice telephony, and it was already part of the life of all Europeans. 2G gave it a whole new dimension, by turning it into a nomadic activity.
With 3G, we enter a totally different realm. We don't need 3G for mobile voice telephony because we already have it. We need it to comfortably surf the Net on the move via a laptop. But that doesn't make a mass market. What we need is a new concept: innovative contents, services and applications that are accessible via handheld terminals.
This is the first priority of eEurope 2005. Support to wireless services is also one of the three action lines set last March in the Commission's Communication on the introduction of 3G. The two others action lines are: first, to create a new regulatory environment; second, to introduce favourable conditions for 3G deployment in the short term.
The 3G Communication was released exactly one year ago. This is perfect timing to assess the progress that has been made:
First, the IST Programme: It supports the development of advanced mobile applications and services along the innovation cycle.
A special 'Mobile Initiative' was launched last year to target 2.5G and 3G services and applications: 11 projects were selected last December under Call 7bis in a wide range of areas, for instance health, tourism, mobile work and location-based advertising. Some of these will be presented to you tomorrow. Additional projects have just been selected under Call 8.
Thanks to the IST Programme, many initiatives are launched by the research community. An example is the Wireless World Research Forum, which recently published its "Book of visions", our gospel for future research directions. It reflects well the transition to a user-centred approach in the field of mobile and wireless technologies.
Second, contents: The eContent Programme, with a budget of 100 million Euro over 5 years, supports the production, dissemination and use of European multimedia and multilingual digital contents. This includes support to a number of wireless projects.
eContent has financed a study which underlines the potential of mobile content. Its median forecast for the European mobile content market is 19 billion Euro by 2006. By 2005, mobiles would represent 8% of content providers' total revenues.
The public sector will play a particularly important role in the realisation of this potential. Today, it is the single biggest holder and producer of content in Europe. There is huge potential in the re-use of public sector information for added value services, in particular mobile ones.
We must therefore encourage and facilitate access to, and use of public sector information. We intend to soon propose legislation to this end.
Third, e-government: Governments also play an important role through the provision of on-line public services. A key priority must be to ensure that on-line public services are accessible through all platforms, including the PC, mobile terminals and digital TV.
There is a strong case for mobile public services. Indeed, 75% of Europeans have a mobile phone in their pocket. As a comparison, only 40% of EU households are connected to the Internet.
Thus, m-government can advance two key targets of eEurope: first, equity in the provision of public services to EU citizens; and second, e-inclusion of all citizens into the knowledge society.
Fourth, IPv6: The number of Internet addresses available under the current version of the Internet Protocol, IPv4, is limited. At the current pace of growth of wireless communicating devices, cyberspace is set to run out of space by 2005. This could impede new developments, in particular machine-to-machine communication, or m2m.
If allowed to grow, m2m will be a major element in shaping our future. It could soon outrank human data traffic. One must imagine a world in which all machines, household appliances, health monitoring tools, even pieces of machinery such as car parts, are constantly interacting to improve our lives and economic competitiveness.
But mobile communication will not give its full potential without the gradual introduction of the new Internet Protocol, Ipv6. It will provide enough Internet addresses for decades to come. It will make the Internet more powerful, robust and manageable.
The Commission recently adopted a Communication, which aims to accelerate the transition to IPv6. The key message is that the first-class EU research must be matched by Member State political involvement. The Barcelona Summit specifically underlined the importance of Ipv6.
Last but not least, regulation: First and foremost, a new telecoms framework was approved and will become operational by mid-2003.
The new regulatory framework is tailored to cater for the needs of extremely dynamic markets, such as mobiles, in the context of convergence: it is technologically neutral; it relies more heavily on competition rules; it limits ex ante regulation to proven cases of market failure; it ensures better co-ordination of legal interventions across Europe.
Another important step is the approval of the Decision on Radio Spectrum Policy. It establishes a policy framework for discussing spectrum issues at EU level. This is very good news for the mobile sector.
In parallel, the short-term regulatory situation for 3G has also improved. Several Member States have clarified the possibility for operators to put in place network infrastructure sharing agreements. They also gave proof of flexibility and pragmatism by adapting deployment conditions to specific market circumstances.
Finally, all the elements of a comprehensive EU-wide framework for e-commerce have been adopted and are being put into place in Member States. Pan-European mobile e-commerce will benefit from that.
3. Looking at the future
Now, let's try to see you what the future has in store for mobiles. The IST Programme is forward looking. It is about designing tomorrow's services, and developing a vision for the day after tomorrow.
Let me highlight some of the key areas investigated by IST projects:
Which of these is going to be the driving one in terms of revenues? Amongst the main candidates, I can see:
The success of such content and applications will depend on the emergence of new business models.
A successful mobile business model must make content production and content provision attractive so that there is a win-win situation for all parties in the chain. Above all, they must make the use or consumption of mobile content attractive to large numbers of customers.
Mobile business models imply new partnerships in the mobile content value chain, and innovative arrangements for sharing of revenues and efforts. We are much interested in the new mobile business models that will emerge in Europe in all those application areas.
The IST Programme also strives to develop a long term vision for mobiles. This is the vision of an 'ambient connectivity'.
In the future, we will see a growing use of sensors. These will be tied up with context recognition though perceptive interfaces. They will sense sounds and images, recognise words, people, gestures and gaze, and respond to process commands. This will constitute a crucial step towards the vision of an ambient intelligence surrounding the user.
Another key element of this vision is seamless communication between all contents, all technological platforms (UMTS, fixed, Wireless LAN, Bluetooth) and all interfaces: the PC, the digital TV, the mobile terminal.
This integrated vision is at the centre of IST research in the current Framework Programme. As we approach the 6th Framework Programme, due to start by the end of this year, closer contact is established with the research community to define the scope of the work to be carried out.
This is where organisations such as the Wireless World Research Forum can assist in defining the work to be carried out regarding the new generations of wireless and mobile systems, and next generation Internet, including the roll-out of IPv6.
Today, I believe that conditions start to be ready for a fast roll-out of 3G.
Governments in the EU, the European Parliament and the European Commission have played their part sofar, by supporting research and standardisation, facilitating roll-out through experimentation, and by having created a sound legal framework.
This must now continue in the spirit of eEurope 2005. We are committed to the success of UMTS, as underlined by the EU leaders at the Barcelona Summit.
For the public sector this means amongst others to invest in offering their own services and applications on 3G mobile terminals. This will make public services more productive and valuable and will be a real contribution to an inclusive society.
With UMTS now showing that it is a sound technology and becoming available, the private sector is challenged to come up with new business models that create mass markets for mobile content, services and applications.
Everybody now has to contribute its part, both the private and the public sector. Jointly we can make 3G mobile Europe a success story.