The European love affair with wireless is hard to miss. Walk down any street in Milan or Helsinki and you are bound to see at least three young hip cell phone addicts per block. But what is not as well known is that Scandinavia is the hotbed for new wireless applications in Europe. A unique combination of high wireless penetration and high Internet usage has made Scandinavia a driving force in new data wireless applications.

The Nordic countries have long been fond of wireless. In Finland and Sweden about 65% of the population have mobile phones compared to 28% in the United States. Each country boasts a giant mobile equipment manufacturer: Finland has Nokia and Sweden has Ericsson.

Internet usage in the Nordic countries is also comparatively high. Even though expensive telephone costs have limited Internet penetration in other parts of Europe, Finland and Norway rank one and two in the world in terms of Internet users per 1,000 people (244.5 and 231.1, respectively). Sweden and Denmark also rank high—eighth and tenth, respectively.

Cashing in

As in North America, next-generation service providers in Europe are forging strategic partnerships and mergers in order to meet the challenges of competition and fast-changing market realities. Last fall, Norway's leading telecommunications company, Telenor, attempted to merge with Telia, the Swedish carrier. The Nordic merger foundered, however, on the issue of location of the new company's mobile division. In spite of the merger's collapse, the companies are still vying to drive growth in the industry. Both companies are now in merger talks with other European telecoms and there is still a possibility that Telia and Telenor will resolve their dispute.

In addition to mergers and acquisitions, companies are using innovative advertising to harness the wireless market. Just last fall, Nokia launched its sleek 8210 mobile phone at a fashion event in Paris. The notion of mobile phones as an accessory is taking hold. Some analysts are predicting a mobile teledensity greater than 100% in Scandinavia because many users have one cell phone for work and another, more stylish one, for home and social events.

Cell phone surfing

Today, the most important advances in data wireless are being made in the wireless application protocol (WAP) arena. WAP enables wireless devices, such as cell phones, pagers and hand-held computing devices, to be used to access the Internet. While mobile phones do have some limitations when it comes to Internet browsing (the small screen, the difficulties of keying in information), experts are predicting that a whole host of new applications will make wireless the leading device for Internet access. Applications will not be limited to cinema listings and stock quotes, and could include an amazing variety of E-commerce interactions: on-line shopping and banking; precise location-based information about weather, traffic flows, train and plane schedules, restaurant menus and so on. Micro-commerce could also be a feature of WAP-based wireless: use your cell phone to buy a Mars bar or a Pepsi from a WAP-enabled candy machine and have it charged to your telephone bill.

If this were a limited market, the applications would not cause much excitement. But estimates are that there will be over one billion wireless subscribers worldwide by 2004, with over 350 million of those in Europe. No wonder this is seen by players in the industry as a sizzling growth area.

Nordic head start

Scandinavia is leading the pack in WAP development, as well. In March of 1999, Finland was the world's first country to issue a license for third-generation cellular operators. In order to connect customers and get WAP widely deployed, Norway's Telenor is offering subscriber identity module (SIM) cards to make mobile phones WAP-ready without the cost of purchasing a new WAP phone. Telecoms are working out the business relationships and business models that will drive applications and ensure that WAP makes economic sense. Meanwhile, in spring of 2000 Telenor announced it would soon be offering affordable WAP phones at 80% less than previous prices.

Despite the impressive statistics, however, challenges remain. As is often the case with new technologies, service providers face the proverbial chicken and egg conundrum: How do you sell WAP phones when there are so few WAP services up and running? And the corollary: How do you make the business case to develop WAP applications when there are so few subscribers?

Other problems remain to be resolved as well. Security issues could cause serious complications and delays, and lead to attempts at a proprietary-driven industry instead of one based on widely accepted protocols. Slow production and distribution of WAP-ready handsets could hamper growth. And there is an urgent need to develop and implement new breeds of OSS for WAP networks.

Developing the critical operational support system (OSS) is one of the keys to the successful deployment of third-generation wireless networks in Scandinavia and elsewhere. WAP networks require much greater integration and demand greater sophistication from OSS systems. WAP devices will need unique identifiers, greatly extending the overall network that OSS will need to negotiate. This will complicate the workflow for service activation, provisioning and order management systems.

The future of wireless is ripe with possibilities for Scandinavia and the world. And innovative OSS vendors will certainly play a key role in harvesting the fruits of the wireless revolution.

From Current OSS, Summer 2000, Vol. 1, No. 4. Published by Eftia OSS Solutions.