Mobile Commerce Emerging as New Business Trend

The explosive growth seen in both mobile phone and Internet sector over the past five years indicates that the booming electronic commerce is quickly advancing to the stage of mobile commerce.

Seeing the enormous profound effects of the progression toward 3G and mobile Internet on the business world, the Hong Kong Industrial Technology Center Corporation organized the Business & Technology Exchange Forum on 3G & M-commerce earlier this week.

3G technology, which will give cell phones nearly five times current bandwidth and the capability to carry video and CD-quality sound, will transform mobile phones from simple voice communication devices into pocket computers.

"Mobile phones and the Internet have quickly become indispensable. Their combination presents us with some of the most compelling business and lifestyle opportunities of the information age," said Peter Y Lo, chief executive officer of the center.

Statistics show that the number of mobile phone subscribers worldwide has increased from over 11 million in 1990 to over 400 million. By 2004 this figure will have exceeded one billion and will surpass the number of fixed line subscribers. At about the same time, the number of wireless devices accessing the Internet will exceed the number of wired ones.

The high expectations for the value of wireless access to Internet led to the intensity of bidding for 3G licenses in the United Kingdom in April, when five companies paid a total of US$33 billion for spectrum.

Despite the size of this figure, which was ten times higher than expected, it was dwarfed last month when Germany's spectrum auction netted more than US$46 billion.

Although the telecommunication companies involved in these auctions have come under fire for paying too much, the sums involved point at the long-term value they all place in 3G spectrum, and specifically the wireless Internet, with its promise of high-speed data delivery, location-based services and global interoperability.

NTT DoCoMo, a mobile phone operator, in the 18 months since its launch, has captured the imagination and the wallets of more than 10 million subscribers, leap-frogging every fixed line ISP (Internet Service Provider) to become Japan's largest ISP.

In Hong Kong, with a 61.5 percent mobile phone penetration rate, the second highest in the world, it is forecast that there will be nearly 3.5 million active wireless Internet users in five years. Their use of data services alone is projected to generate more than US$450 million in revenue.

Voice, for so long the dominant paradigm in communications, will continue to play an important role, but, as 3G becomes more and more established, new services based on high speed data, video and broadband technologies will begin to assume greater importance.



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