There is a growing sense of anticipation about this year's 3GSM World Congress, the mobile phone industry's annual shindig that started yesterday in Cannes.
The technology buffs are obviously looking forward to getting their hands on the latest gadgets and talking about the next generation of mobile services -- 3G -- which should become a reality throughout Europe as this year progresses. But for the host of chief executives heading for the south of France the real question is who will still be there when the conference rolls around again next year.
After one of the worst periods the industry has been through in its relatively short life, the hangover from the dotcom boom and bust seems to have worn off. Operators in Europe experienced a bumper Christmas with handset sales and new customer numbers soaring.
Research firm Gartner forecasts that 560 million phones will be sold this year, up from an estimated 510 million last year.
Share prices have been heading upwards and that means multi-billion-dollar mergers and takeovers are back on the cards.
The auction of AT&T Wireless, the third-largest US mobile phone operator, ended a week ago with the number two player, Cingular, snatching the prize from Vodafone with a US$41 billion offer. Vodafone proclaimed that it had quit the auction in the name of shareholder value but it was a setback for chief executive Arun Sarin, who has been at the helm for only six months and is still in the shadow of his predecessor and deal-maker extraordinaire Sir Chris Gent.
Vodafone is left trying to patch up its relationship with its existing US partner, Verizon Communications.
Then just before the weekend it emerged that Dutch telecoms operator KPN recently tabled a bid -- mostly in shares -- for UK rival MMO2. The approach was rebuffed because the management of MMO2, led by chief executive Peter Erskine, felt it did not place a suitable value on the company.
KPN, insiders believe, is unlikely to take no for an answer and is expected to return with a better -- or even hostile -- offer. The board of the Dutch company was expected to face intense questioning about its plans at its results announcement yesterday.
Part of the reason for KPN's interest in MMO2 will be highlighted at Cannes: it has been excluded from the alliances that have grown up in the past year to take on Vodafone.
Vodafone has an enviable position in Europe because it took advantage of the effect the Internet boom had on share valuations to consolidate its place in the region through acquisition. Its competitors are banding together in loose alliances based on international roaming and collective purchasing power to seek some of the savings and service enhancements Vodafone can extract from its seamless pan-European network.
France's Orange, Germany's T-Mobile, Telefonica in Spain and TIM in Italy were the first to get together, last summer, but their partnership is rumored to be riven with in-fighting and factionalism.
Finding itself excluded from the party, MMO2 decided to put together an alliance in the autumn, partnering its operations in the UK, Ireland and Germany with Amena in Spain, One in Austria, Pannon in Hungary, Sunrise in Switzerland, Telenor in Norway and Wind in Italy. It will be announced during 3GSM that this loose affiliation has taken on the title of the Starmap Mobile Alliance, according to industry talk.
Behind closed doors at this week's conference, executives will be jostling for position within these alliances, while investment advisers look at ways to make them more than just loose affiliations.
In public, much of the talk will be about 3G, with several big operators, including Orange, laying out plans for the new service and new handsets being shown by manufacturers.
In 3, Europe already has a 3G operator offering a service in the UK and Italy, but it failed to generate a real buzz because of technical difficulties and problems getting handsets. Now these issues have been addressed the company yesterday was to unveil plans for a pre-paid service which it hoped would boost customer numbers before the rest of the industry launches competing services in the autumn.
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