In Anders Persson's world, almost everyone owns a wireless phone.
The 22-year-old Swede has owned a mobile device for more than four years. He uses it for business and personal calls, as well as for sending text messages through the massively popular short message service.
"Ninety per cent of my friends have cellphones," Mr. Persson said in an e-mail. "Many of us don't even have home phones. With mobiles you can talk, send messages, check e-mail, and it's cheaper than a home phone. It's the best option."
The runaway popularity of wireless phones among Western European consumers -- especially Scandinavians -- has put the continent's wireless service providers and device makers at the forefront of the industry worldwide.
Swedes are nearly four times more likely to own mobile phones than Canadians, with 83 per cent having a wireless phone by September, compared with just 21 per cent of Canadians, according to Washington-based consulting firm Strategis Group.
Arrayed against Europe's massive lead in wireless is North America's domination of e-commerce: The United States, Canada and Mexico will account for more than 77 per cent of worldwide e-commerce revenue this year, according to Forrester Research Inc.
But there is a technological wild card that could tilt the e-commerce balance in Europe's favour -- wireless networks will be the backbone for the next generation of high-speed, mobile Internet services. And that could allow European firms to leap-frog their North American counterparts on the strength of expertise and a huge customer base hungry for new wireless devices and services.
Europe's wireless giants are licking their collective chops over the potential of the wireless Web to boost sales and revenue for service providers. At the recent Comdex high-tech trade show in Las Vegas, the head of Sweden's L.M. Ericsson Telephone Co. Inc., Kurt Hellstrom, predicted that "in only three years from now, more people will access the Internet with a mobile device than with a fixed device, and development will happen with tremendous speed. The mobile Internet will develop even faster than the fixed Internet."
More objective observers paint a similar picture: "The wireless Web is the next wave and it's going to be big, because it dovetails with the emerging growth of e-commerce," says Lawrence Surtees, a senior telecommunications analyst at International Data Corp. (Canada) Ltd. "Mobile e-commerce [or m-commerce]is the next frontier."
European service providers, such as Vodafone Group PLC of Britain and Germany's Deutsche Telekom AG, have spent billions of dollars both for the licences to build the third-generation (3G) wireless networks that will bring fast Internet service to mobile-phone users, and to acquire European and overseas rivals in order to extend their reach.
North American service providers have yet to bid on the wireless spectrum that has been set aside for 3G technology. Canada's auction is slated for mid-January, while the United States is waiting until September, 2002.
Manufacturers such as Nokia Corp. of Finland and Ericsson are outdistancing their North American rivals. U.S.-based Motorola Corp., the No. 2 mobile phone maker worldwide, recently posted a disappointing third-quarter performance that showed a striking 23-per-cent decline in new cellphone orders. The No. 1 maker, Nokia, reported better-than-expected third-quarter results -- and a bullish outlook for the sale of its wireless devices.
"The technology is there in North America to perform, but Europe's got the wireless market and the skill set that's developed along with that -- and that will not change," said Dirk Bout, an Amsterdam-based senior analyst with U.S. research firm Gartner Group Inc. "Europe has a big advantage in wireless in the sense that it has the biggest carriers in the world, and has the biggest equipment makers, both in network infrastructure and handsets."
But North American high-tech firms are not standing on the sidelines. Just as European players have forged ahead with wireless, U.S. and Canadian tech companies hold an edge when it comes to the technologies that deliver the Internet, such as desktop computers, Web software and network hardware.
With this advantage, North American tech players see a big opportunity to provide software, content, handheld devices and network hardware for the wireless Web.
Last month, Sun Microsystems Inc. of Palo Alto, Calif., introduced a wireless business unit, a $100-million (U.S.) venture fund, and a software platform for wireless calendar and messaging applications.
International Business Machines Corp., for its part, rolled out software for wireless devices and a new service for hosting wireless software. "We've made some pretty serious investments, because we believe wireless is the second wave of e-business," says Shahla Aly, vice-president of telecom and wireless at IBM Canada Ltd. of Markham, Ont. "We aim to get to the inflection point where just about one in every two people has a wireless device that they can access the Internet on."
Motorola is also hoping to grab a chunk of the wireless Internet by introducing devices that deliver Web content. "You'll start to see all kinds of devices that won't have any phone functionality at all, but that provide entertainment and information" such as stock quotes and video games, says Frank Maw, vice-president and director of Motorola Canada Ltd.'s personal communications sector.
But it's the smaller tech players, such as 724 Solutions Inc. of Toronto and Calgary's Wi-LAN Inc., that some feel will be able to take a big bite out of m-commerce by providing software that extends Web content to alternative wireless devices such as the Blackberry e-mail unit from Waterloo, Ont.-based Research In Motion Ltd.
"Canada has emerged as one of the hotbeds in wireless data," IDC Canada's Mr. Surtees says. "It's our software development expertise that has make us a powerhouse, despite our small size."
Canadian service providers are anticipating huge growth in the country's wireless market as Web-based services become available. "We will see as much growth in the next three years as in the last 14 or 15, with well over 55-per-cent penetration rates by 2005," says Bob Cummings, Telus Mobility Inc.'s director of marketing services. "M-commerce will increase the value proposition, and will help with the youth market and widen the overall consumer appeal."
Mr. Surtees says Europe's wireless expertise and North America's Internet edge will eventually strike a kind of worldwide balance. "We'll catch up more in wireless and they'll catch up more on Internet through the common glue of e-commerce."
But Mr. Bout of Gartner Group cautions that North American tech players cannot rest on their laurels or on rhetoric. "With the wireless Web, it's going to be very important for North American companies to execute in the Internet space. They've got to try to extend their advantage in that space to wireless, or they'll fall behind."
Why wireless connects with Europe
Callers pay: Unlike in North America, in most of Europe the owners of mobile phones do not pay for calls made to them -- the calling party does. That removes a big economic disincentive to giving out a wireless number. Cost of land service: In much of Europe, there's no such thing as the flat rate that Canadians pay for local phone service. Instead, each call has to be paid for, whether it's made by mobile phone or land-line phone. That means the cost of owning a wireless device in Europe is comparable to a wire-line phone, especially if the user makes lots of calls. And the land-line phone networks in Canada and the United States are more reliable than those in some parts of Europe, making wireless an even more attractive option for many Europeans. Single standard: In the late 1980s, the European Union chose the global system for mobile communications, or GSM, for new digital wireless phone networks. Virtually all of Europe's wireless network uses the same standard, giving consumers fewer decisions to make when it comes to buying a phone and signing up with a service provider. The economies of scale that come with a single standard have helped European wireless firms.
North America has two main digital standards, and several others that have a smaller presence. Superior service: This earlier adoption of digital cellular by European players has led to superior digital wireless network coverage in Europe, and a more mature set of wireless services.