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Glitches threaten potential for new wireless services

Telecommunications companies must work quickly to smooth out glitches in the newest wireless services, such as multimedia messaging, to revive growth after the industry's worst slump ever, executives said.

France Telecom SA, Vodafone Group Plc and rivals have begun selling services for handsets equipped with cameras made by companies such as Nokia Oyj and Samsung Electronics Co. They don't always work when a customer tries to send a photo to someone using a different brand phone or a different network.

"The fact is that sending an MMS even within the same network can yield some very strange results," Douglas Li, chief executive officer of Hong Kong's SmarTone Telecommunications Holding Ltd, said at the annual 3GSM World Congress.

"It is a major challenge facing our industry," he said.

Cegetel chief executive officer Frank Esser demonstrated the challenge when he sent a photo from his vacation at the Meribel ski resort in France from a Panasonic-brand handset over his company's network to a user with a Sony Ericsson Communications Ltd phone. The photo that turned up was half the size of a thumbnail.

Still reeling from record losses and battered stocks, companies are trying to entice consumers to buy new phones and adopt the new services.

How well multimedia messaging works may determine appetite for the next generation of cellphone services, executives said.

"The stories we're picking up is that it's turning a lot of consumers off," said Tom Lynch, president of Motorola Inc's phone division.

"There is that risk" that operators and handset makers have promised too much, he said.

Motorola, Nokia and Ericsson AB have lost a combined US$400 billion in market value since May 2000 as demand for phones stagnated and spending on networks plunged. Ericsson has racked up six straight quarterly losses, while Motorola in January reported its first consecutive quarters of net income in two years.

NTT DoCoMo Inc, the world's second-biggest phone company by sales, launched its third-generation phone in October 2001 and has missed its subscriber targets for the service, known as FOMA, as handset deliveries were delayed and network connections patchy.

Global handset sales fell for the first time in 2001 and barely budged last year, as markets neared saturation and users put off upgrades. Earlier technologies designed to help move data over wireless networks have flopped because consumers found the services difficult to install and unreliable.

The theme of the 3GSM World Congress this year is "delivering the promise."

"Network interoperability has to be worked out," said David Shepard, general manager of Texas Instruments Inc's wireless networks unit.

"The different networks have to be able to talk to one another," he said.
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