Wherever next? Part 1 (Published in Land Mobile, September 2001)

Where is the evolution of mobile communications taking us? In the first of three articles, Peter Clemons offers an antidote to the 'outrageously positive' visions of the future set out in glossy brochures by mobile industry leaders in recent months and years. The communications landscape, he argues, is extremely uncertain and we are in danger of being unable to create the vision of society they promised us

Our only reference for predicting the future is our interpretation of the past and present. The fact that we have a fairly good pictorial representation of life throughout the 20th century should help us with this interpretation. However, our opinion regarding progress during the 20th century will differ widely according to our sex, political persuasion, country of origin, ethnicity, religion, or cultural, social and economic background.

However much sociologists and analysts try to break people down into a few simple categories, it is becoming increasingly difficult to grapple with the complexity of modern-day life. One undeniable fact is that the pace of life for the increasingly impossible-to-define average human being living in a number of wealthy Western and Eastern countries has clearly accelerated over the past 100 years.

Back in 1901, telephony was still in its infancy. There were no airports, practically no motor cars and no radio or television. The two World Wars had not been fought and most economic activity was still carried out by tightly-held family businesses within restricted geographical boundaries. Agriculture and heavy industries dominated the economic landscape and most people worked on the land, down mines or in factories. There was little concern for health and safety and environmental issues, although the struggle between capital and labour was becoming more intense due to the lack of truly democratic institutions representing the majority of the population.

If we fast-forward to 2001, we find that technology-based, service-centric business is now a 24-hour affair, driven at a frenetic pace by stock markets, investment banks and global enterprises. Family businesses make way for global branding and franchising. Life appears to resemble one massive theme park on CCTV.

We travel greater distances more often; we generate, send, receive and process more information than ever before; we drink more coffee, burn more midnight oil and have more meetings than ever before. Are powerful new communications networks the cause or the effect of this new reality? Are we the masters of our own destiny or are we confused, na?ve beings trapped in the lights of a technological juggernaut about to run us all over?

Travel, broadcasting, computing, networking and mobile telephony are all converging around the Internet to create the so-called new economy - the brave new world. Society is changing to accommodate this new reality, as are people's expectations. Unfortunately, as we cross the threshold from one millennium to another, the successes of the 20th century are becoming the millstones of the 21st. We have come so far in 100 years and yet there is still so far to go!

Are we even really sure whether the Internet is the answer to all our prayers? I am prepared to bet that, sooner rather than later, we will come to realise that the Internet itself was just one enormous speculative bubble, ready to burst together with the late 20th century American economic model. History has shown us that something even bigger will definitely come along to take its place at the centre of our lives. The Internet itself has already eclipsed the telex machine and France Telecom's Minitel. The personal computer quickly made the typewriter redundant. If we admit that old habits die hard, the Internet is likely to survive long into the future as a peripheral service used by older people. To borrow a phrase from the Cisco Systems' commercials: are we ready?

Forecasting: a daunting task

When internal or external telecommunications analysts make predictions that are critical to a particular company's long-term strategy, they need to take into account as much relevant quantitative and qualitative data as possible. Numbers extrapolated in a straight line or on a steady curve are virtually useless for forecasting purposes without a thorough understanding of the underlying methodology or the specific characteristics of the market being forecast, such as the competitive landscape, regulatory issues etc. The analyst's experiences of past developments in the same or similar markets are extremely valuable even if they cannot be quantified. There are too many examples of expensive reports commissioned by clients which do not provide sufficient, multi-sourced information to back up crucial strategic decisions.

It is probably best for companies to use both internal and external sources of information and analysis to safeguard themselves against bias. If a degree of uncertainty clouds the decision to go ahead with an investment in a new technology or some new market which is central to a company's strategy, not even advice from internal and external sources will be enough. Ironically, industry experts can often exaggerate - and therefore misread - the likely success of a particular solution because of too much knowledge, which can lead to excessive optimism regarding the importance of certain mobile solutions. This means that companies will also need to understand what a cross-section of the general public thinks about mobile communications, requiring a detailed, well-planned consumer survey.

Forecasters can face pressure from clients to come up with optimistic forecasts in order to present a solution's prospects in a favourable light to company directors or external financing agents. Because the forecaster wants to gain repeat business from a client and have an easier life, incentives to produce the best possible, independent analysis do not always exist. However, if the forecasts do turn out to be wide of the mark, both forecaster and client will suffer financial penalties and/or a bad reputation. There are no short cuts to successful forecasting, which must be continuously updated to keep abreast of new developments.

A dose of reality and humility

During the 1990s, the growing success of GSM in Europe and then around the world led many members of the investor community to believe that just about all mobile communications solutions would be successful. Reports identifying hundreds of millions of users for wireless local loop networks, mobile satellite networks, DECT, TETRA and LMDS were snapped up by manufacturers, operators and investors and used as evidence of a world gone wireless.

This mobile frenzy was fuelled even more by reports of the imminent Las Vegas-style marriage of mobile communications with the ubiquitous, seductive Internet - a marriage made in heaven. Prices for dot.coms and 3G licences soared ever higher by the day as investors feared missing out on the latest gold rush. When will we ever learn?

Forgetting the lessons of history

It is easy for each new generation to forget that the history of human technological progress is a long series of laborious trials and errors, containing a lot more misses than hits. History conveniently filters out the thousands of faux pas, leaving us with a story of constant progress culminating in the amazing technological successes of our present day. This distorted, mainly Western, view of history creates the impression that we are heading towards some glorious final solution - Heaven on Earth, Utopia.

We seem to forget that most of the really big discoveries have already been made a long time ago (see timeline, at the end of this article). The human beings that, in an age long before the written word, Hollywood or CNN, first domesticated crops and animals, perfected the wheel and harnessed the power of nature to increase the economic surplus of early civilizations have long been forgotten by history. Their remarkable collective achievements mean that most of us no longer need to worry about satisfying our basic needs, but can spend our time devising new ideas for dot.com companies or new applications for 3G networks. For all the thousands of hours spent sitting at a desk in front of a PC, we are likely to achieve very little in comparison to a handful of forgotten early 'geniuses' who led us from the animal kingdom into civilization.

In retrospect, many events, considered true revolutions in their day, turn out to have been just one more small step on the road towards some minor historical goal. Many objects and services common to our everyday lives at the outset of the 21st century are simple continuations of earlier objects and services introduced over the past 200 years or so.

If there is to be another Industrial Revolution at some stage over the coming millennium, it is hard to believe that we are witnessing it at the moment. If the 20th century has taught us anything, it should be a need for greater humility regarding our achievements. The mobile communications industry needs to gain a real sense of perspective and be much more honest with itself about its impact on society if it really intends to be part of the next significant breakthrough.

Globalization's false message

We are told that size matters in the new global economy. The seductive power of globalization is based on the enormous economies of scale which can be achieved by colossal multinational companies that rule the world and make nation states irrelevant. America is held up as the one and only 21st century superpower, exporting its economic model throughout the world via democratic institutions such as the World Bank and the International Monetary Fund, bringing peace and prosperity to all. One day everyone will own a multi-protocol, 3G/4G personal communicator with global coverage in order to tune into CNN and MTV.

To borrow an American phrase: get real! The above is what many economic experts would like us to believe. The reality is that many multinational companies appear to have already overstretched their own capacity to penetrate new markets. Many leading global enterprises are facing meltdown in their share price because they are unable to deliver on ambitious promises made to investors, being too cumbersome, bureaucratic and debt-laden to adjust to a new economic reality.

The American way of life is, in fact, only enjoyed by a relatively small minority of the world's population, and many alternative models are waiting to come of age during the 21st century. Westernization does not appear to guarantee peace and prosperity, and it is still true that most human beings have never made a phone call.

Everything must change

Over the centuries we have been made to believe in the power of kings, armies, tax-collectors, religious institutions, dictators, democratically-elected governments and the capitalist system. Each generation is encouraged to believe in some form of eternal symbols, reinforced by an apparently benevolent education system. Past civilizations have all erected monuments to past achievements and eternal truths, which subsequently need to be conveniently transformed to appeal to the younger generations as circumstances change. The only eternal truth is that nothing stays the same. Change is an important part of human existence, even though it creates considerable tensions among a general population which is habit-forming and conservative by nature.

People need order: they need to believe in something, they need leaders with ideas and vision. Every generation is led to believe that its political and business leaders will find the formula to lead humanity towards its ultimate goal through some mystical process of unadulterated progress. And every generation is disappointed. Where are the mighty dinosaurs now? What happened to the all-conquering ancient civilizations? What fate befell the divine kings and their empires?

Old technologies, old companies literally become dated and 'uncool'. As new generations search for their own identity, slow, accumulatively dramatic shifts in social, cultural and business practices take place every 20 years or so. The trick of survival and temporary success is to package old ideas in new and exciting ways. This is exactly the trick being performed at the moment by the mobile communications industry, generating products and services valued by millions of customers. Of course, history has shown us that any industry generating excessive profit margins must eventually regress to some average level once it matures.

A small number of companies with natural monopolies or a particularly powerful product may manage to survive for a century or beyond - Coca Cola comes to mind - but does anyone really believe that Vodafone, Amazon.com or even Microsoft will survive the generational tidal wave? Newton's Law of Gravity can definitely be applied to business: what goes up must come down, sooner or later. 

Towards a new economic model

If we look at the motor of the world's economy at the dawn of the third millennium, the United States, we observe the extreme confidence, over-optimism and abundance of opportunities spawned from the genesis of the Internet economy. Entirely new economies are apparently being created in hyperspace; we have new electronic addresses, we move around new worlds, interact with machines more than we do fellow human beings, and pay for everything with 'funny money', which seems to appear and disappear from our accounts like magic on its hyperactive journey around the world's financial centres. Shops never close, there is no place to hide from hypercapitalism, which seduces us with the constant promise of riches and glory just around the corner for everyone.

Isn't the American Internet vision of the future too good to be true? If it is, what are the consequences for mobile communications companies if we all embrace the Wireless Web? We must surely also have a fallback plan, in case the Internet is overtaken by something else more powerful and adaptable to 21st century living.

What can we do to prepare and shelter ourselves from the fallout from the excessive expectations and unfulfilled dreams of consumers everywhere? How can serious analysts - and citizens - attempt to make accurate predictions of the future of mobile communications in the current context of vested interests, speculative bubbles and information overload? Surely there is the real danger that new technologies such as genetic engineering, bionics, human cloning, interplanetary travel, or some other fad, might replace mobile communications as investor hot stocks, endangering the real value of our pensions when we retire in 2024.

The long and winding road to 3G

All the above is relevant to our analysis as we search for the key elements from the past, present and future, which will allow us to take a shot in the dark at predicting the future of mobile communications and its place in history. But ultimately, this article is not intended to be a piece of science fiction. We must live in the present. What are the immediate steps that can be taken to ensure as smooth a transition to 3G as possible following the amazing mistakes made by highly intelligent mobile industry participants over the past 24 months or so?

There are already some very good digital technologies available today: GSM, CDMA, TETRA, Tetrapol, iDEN etc. A concerted effort by regulators, manufacturers and operators to provide a greater degree of connectivity, interoperability and imagination could already offer users affordable solutions to today's - and a lot of tomorrow's - problems.

Mobile data doesn't need to wait for 3G: existing resources can be used more efficiently, the hardware and software based on existing protocols can be enhanced to get us through the early part of the 21st century. This would appear to be a sensible solution to a crisis which appears to have been created by a mixture of greed, ignorance and over-confidence.

It is unfair to place all the blame on over-ambitious manufacturers, operators and consultants. The regulatory and financial climate should have been more patient with the solutions of the future: UMTS, next-generation MANs and PANs, instead of encouraging stock-market speculation and aggressive business plans, which are now jeopardizing the entire future of mobile communications. The solutions promised by 3G and beyond will be developed if we take a more realistic approach to technological innovation during the 21st century and educate investors about the real potential market sizes of these solutions in the short, medium and long term. This will be the subject of the second article in this series.

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INSET:

This highly selective list of human technological achievements highlights the long development cycle of many of today's products and services. It also demonstrates the fact that most modern-day development programmes simply build upon the endeavours of past genius:

1769: Nicolas-Joseph Cugnot builds a steam-powered tricycle.

1774: Alessandro Volta's electrophorus, forerunner of the battery.

1821: Michael Faraday produces the world's first electric generator.

1827: Joseph Nicéphore-Niépce takes the first photograph.

1839: Charles Babbage designs his 'difference machine' (computing device).

1840: Samuel Morse's patent for Morse Code and the telegraph.

1876: Alexander Graham Bell makes the first telephone call.

1877: Thomas Edison records the first sound; invents the phonograph.

1895: Louis Lumière produces his portable cinématographe.

1898: Christopher Latham Sholes obtains a patent for his typewriter and the QWERTY keyboard.

1901: Guglielmo Marconi makes the first transatlantic radio transmission.

1903: The Wright brothers make the world's first powered flight.

1908: Henry Ford sets up his assembly line for the Model T.

1927: John Logie Baird achieves the first images on his Phonovision (television).

1930: Galvin Manufacturing Corporation produces its first 'Motorola' car radio.

1945: Pennsylvania: ENIAC is the world's first general purpose electronic computer.

1969: Neil Armstrong takes one huge step for mankind.

1969: First four host computers connected to ARPANET (start of the Internet).

1972: Ray Tomlinson writes the first e-mail.

1979: First commercial cellular service begins in Japan.

1982: CEPT establishes the Group Spéciale Mobile (GSM).