| BUSINESSWEEK ONLINE : MAY 3, 1999 ISSUE | ||||||||
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| SPECIAL REPORT
Cell-Phone Central (int'l edition) Finland leads the wireless charge At the Lintumepsan Middle School, 10 kilometers outside Helsinki, kids as young as 10 are showing up in the morning with mobile phones. They're supposed to turn them off during class hours, but some of them always forget. ''It's horrible when phones ring during class,'' says Tarja Mattila, who teaches eighth-graders German. What's worse, the children have their phones rigged to ring with a few bars from songs by Guns N' Roses and the Leningrad Cowboys--which, of course, only adds to the annoyance. Why do all these children pack phones? In the past five years, mobile phones have worked their way into the fabric of Finnish society, taking their place right alongside the sauna. More than half of all Finns own a mobile phone--the 58% penetration is the highest in the world, ahead even of neighboring Sweden. But that doesn't mean this market is saturated. Phone companies here expect Finns to continue snatching up mobile phones until, five years from now, the machines outnumber the country's 5 million people. ''We should top 100% market penetration by the middle of the next decade,'' says Mika Uusitalo, chief technology officer at Sonera Ltd., Finland's largest telephone company. All these phones promise a lot more than chatter in Finland. Already, Finns are racing into data transmission, sending millions of short missives to each other's phones. Spouses trade one-sentence messages, say, telling each other when and where to drop off their kids or to pick up a liter of milk. High school students speed-type on their phones, zapping out messages with such ease that teachers, worried about cheating, confiscate the devices before tests. But these current forms of data transmission over the phone will soon be viewed as primitive--little more than the Digital Age equivalent of Morse code. Within two years, Finland, along with Japan, will be leading the charge into a far grander world of data, the so-called Third Generation of mobile telephony. That new technology will lift data speeds from today's sluggish 9.5 kilobits per second, equivalent to modem rates from early this decade, to one megabit or two per second--20 or 40 times as fast as standard modems today. It's the future of the Web, coming on a mobile phone. Think stereo-quality sound, talking E-mail, and high-quality videoconferencing. UNDER THEIR THUMB. Tiny Finland will play a critical role in shaping this wireless future. From $15 billion cell-phone king Nokia to startups on the border of Lapland, the country's entire phone industry is gearing up for the new era in data communications. Nokia is rolling out a new $750 Internet phone later this spring, and the government has already awarded licenses to Finnish phone companies Sonera and Radiolinja, along with their Swedish competitor, Telia, to set up Third Generation networks. In Finland, some of the easy-to-use data services are starting to take hold. Mobile-phone subscribers in Finland can request their bank balances, weather updates, traffic reports, even Cable News Network headlines, through short-message services. Kids enjoy dialing up a number where, for the equivalent of 40 cents, they receive the latest Finnish jokes. They also can browse a long list of songs on a Sonera Web page and then dial the Helsinki number and the appropriate song code. In a matter of minutes, they receive as a short message the software coding that programs the phone to ring with the chosen song--everything from Under My Thumb by the Rolling Stones to Finnish ballads. Each song costs 60 cents, and some kids change their rings three or four times a week. With services like these, Sonera has soared to $1.9 billion in sales, with mobile phones and services accounting for more than half the revenue. "IN DENIAL." Finns even craft their own sounds to signal an incoming call. Waiting for the music to start at a James Brown concert in Helsinki in early April, several Finnish professionals pull out their phones and compare rings. One Nokia manager, equipped with the computer phone called the Communicator, has programmed it to ring with the voice of his child singing. A jazz pianist has a phone that whistles like a New Yorker hailing a cab. A newspaper editor has downloaded the theme from Star Wars. Asked if they know people who don't have cell phones, they sit back and think. Finally, Iiro Rantala, the musician, says: ''I know four people who don't have them. They're in denial.'' These days, young Finns moving into apartments rarely bother to install wired phones, and businesses are now ditching wired phones altogether. Anygraaf, a 12-person graphics company outside Helsinki, just tossed out its desk phones last month in favor of a mobile network and dozens of Nokia 6150 phones. Employees reach each other by dialing a three-digit extension whether the person called is in the next cubicle or in the U.S. In time, says Chairman Hannele Tahvola, the mobile network should be linked to the company's computer system so that the mobile phones will be able to pick up E-mail and corporate data. Now, the Finns have their eyes on the phones and networks that should make these grand promises real. Nokia and the other phone manufacturers are coming out with the first set of Internet phones to use the new global standard, Wireless Application Protocol. They're planning zippier models, with high-definition color screens, to be sold by the end of this year. Phone companies, meanwhile, are racing to raise the data speed by a factor of six. This means that the mobile-phone users in Finland should be ready for serious Web surfing by this time next year. Much work still has to be done. The trick is to come up with custom services for the mobile market, and scores of Finnish software companies are springing up to produce these programs. Around a former ceramics factory outside Helsinki, an entire high-tech community focused on mobile communications is taking shape. Two-year-old Digia is piecing together a mobile network for 70,000 small and midsize businesses in the country. This suburban development alone is attracting upwards of $100 million in financing a year, estimates Digia CEO Pekka Sivonen, as investors from New York to London to Silicon Valley are recognizing that the mobile phone has transformed Helsinki from a hinterland into a hub. At the dawn of the mobile era, the cell phones in Finland are ringing happy tunes. By Stephen Baker in Helsinki _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
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