Britain's mobile innovators
The British are coming - and innovating - in a strong way in Europe's mobile
phone industry
By VICTORIA SHANNON
FROM wireless rat-catchers to search engines, from gambling specialists to
e-mail developers, British companies are leading European innovation in the
mobile phone industry, taking over from the Nordic countries, a view held by
many in the industry and now supported by a new study.
The innovating companies are not the biggest on Europe's telecommunications
landscape; they are not the cellphone network carriers or the phone makers,
for example. Rather, they are entrepreneurs who are finding niches and
building on creative ideas to feed a global market demand for more mobile
services and features.
One of these small British start-ups is making 3D games for cellphones.
Another is thriving on sales of Bluetooth phones. One repairs and
refurbishes mobile phones at a plant in Romania, and yet another makes the
software used for the BlackBerry hand-held e-mail device.
A telecommunications market that was deregulated early, greater comfort with
the English language, better availability of public and private financing, a
close connection to the Continent and the United States and ready access to
masses of mobile phone users are some of the factors contributing to
Britain's recent move ahead of the Nordic comedown in an industry that has
more than 1.5 billion customers worldwide.
Evidence of a shift
A study, commissioned by British magazine Real Business and the mobile
operator O2 and scheduled for release on Wednesday concluded that more than
200 wireless start-ups were operating in Britain, generating as much as 2
billion - or S$5.9 billion - a year in business. A panel of judges selected
from the 200 or so to a list of '50 to Watch' based on their size, stability
and inventiveness; their sales alone total 1 billion annually.
Other anecdotal evidence supports the shift. At the annual trade conference
for the industry, the 3GSM World Congress, about one-third of the exhibitors
are British companies. Today, Sweden, Finland, Denmark and Norway no longer
have the cachet they once did for wireless soothsayers.
'That's essentially right,' said Bengt Nordstrom, chief executive of the
Stockholm-based analysis firm Northstream and a longtime watcher of the
mobile industry. 'Sweden, along with Germany and some other countries, could
do a lot more to encourage start-up innovation in terms of financing and
taxes.'
In Scandinavia, he added, 'we are just not that many people', and the mobile
market is 'farther away than most people thought' geographically. He said
the fastest-growing wireless markets today were in developing countries.
When the mobile business started in the 1980s, supporting companies were
drawn to the Nordic region by the presence of Nokia of Finland and Ericsson
of Sweden, the companies that largely built Europe's cellular networks.
In the 1990s, companies from Microsoft to the Asian wireless leader NTT
DoCoMo of Japan invested in Scandinavian research centres to propel their
wireless ideas and aspirations forward. Stockholm gained the nickname
'Wireless Valley' in some circles, and at one point there were more mobile
subscribers in Sweden than in all the rest of Europe.
Now, it is not the network or mobile phone makers around which new ideas
revolve but the carriers, a transition of power that took place gradually
over the past several years.
Because the operator business is not centralised in Northern Europe, that
area does not have the same attraction for entrepreneurial businesses
looking for seed money or investments from big business.
Nokia and Ericsson eliminated thousands of jobs when the telecommunications
bubble burst in 2000. Microsoft gave up its Ericsson research partnership
several years ago. And Vodafone, headquartered on the outskirts of London,
has become the biggest cellphone operator outside China.
'Today's incubators of new mobile ideas are the carriers and the venture
capitalists,' said Mike Short, vice-president for research at O2. 'The
internationalisation of the carriers has certainly helped in the UK,' he
said. France, Germany and Italy have fostered many mobile phone businesses
too, but Mr Short maintained that they would have trouble coming up with a
comparable list of 50 wireless companies with the strength of the British
version.
That list includes Wyless, a London-based company that specialises in
machine-to-machine communications, using wireless chips and software to link
'dumb' devices like vending machines.
Companies in the top-50 list
Among other products, Wyless has developed a system to use low-power radio
devices in rat traps to notify people, via the cellular network, when a rat
has been captured so that it can be removed. The company operates in 79
countries.
Paul Barnett, Wyless' communications director, maintains that the centre of
the machine-to-machine market has also shifted from Scandinavia to Britain.
'But we do have offices in Scandinavia,' he added.
Others on the list include:
# AQA, short for Any Question Answered, a London-based company that fields
more than one million questions a year sent via the short-message service on
mobile phones.
# Scoopt, a Glasgow-based company that encourages mobile users to send in
images taken on the cameras in their phones.
# The Cloud, the Fareham, England, company that is the largest European
operator of public wireless-fidelity hot spots.
# Mobiqa, the Edinburgh-based company that developed bar codes that could be
shown and then scanned from the telephone screen and used as tickets,
vouchers and coupons.
# TTP Communications of Royston, England, whose wireless software powers the
BlackBerry.
Mr Nordstrom said, however, that Ericsson and Nokia were still the centre of
a large telecommunications ecosystem in northern Europe, had healthy
multibillion-euro annual businesses and were continuing to finance start-up
companies with bright ideas. He noted that only two weeks ago, Ericsson
bought Marconi, the once-proud British telecommunications network company
that had not been able to recover from the industry's collapse, for 16.8
billion Swedish kronor (S$3.6 billion). - International Herald Tribune
Copyright C 2005 Singapore Press Holdings Ltd. All rights reserved.
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