Going Mobile in Barcelona

This year's Mobile World Congress will showcase the latest in wireless, but the hottest topics are likely to be mobile broadband, mobile TV, and mobile search

by Jennifer L. Schenker

Barcelona, SPAIN: A visitor talks on his mobile at the 3GSM congress in Barcelona, Feb. 14, 2007. LLUIS GENE/AFP/Getty Images

It's like the Oscars of the global mobile-phone industry. Every year, the movers and shakers of the wireless business converge for the Mobile World Congress, which was previously known as 3GSM. Held in Barcelona for the third year running, the event is expected to attract more than 50,000 attendees and 1,200 exhibitors.

Companies will unveil everything from flashy new handsets and mobile services to esoteric network equipment. In hidden meeting rooms or behind the podium on the main stage will be at least 200 chief executives, including China Mobile Chairman Wang Jianzhou, Softbank CEO Masayoshi Son, Vodafone (VOD) CEO Arun Sarin, Nokia (NOK) CEO Olli-Pekka Kallasvuo, and keynote speaker John Chambers, CEO of Cisco Systems (CSCO).

This year, given the growing importance of mobile music and video, the guest list also includes a few flashier names. Film stars Robert Redford and Isabella Rossellini are set to show up, as is the curiously named will.i.am, front man for the music group Black Eyed Peas.

During five frantic days starting Feb. 10, hundreds of hopeful startups offering the latest breakthroughs in mobile software, services, and content will throng rooftop pool parties hosted by venture capitalists. Everyone will feast on tapas and guzzle Rioja wine amid the dizzying dealmaking.

After all, the mobile industry has a lot to celebrate. Buyers snapped up 1.14 billion mobile phones last year, a 12% increase over 2006. Industry leaders Nokia, Samsung Electronics, and LG Electronics all reported strong fourth-quarter results, thanks largely to exploding demand in emerging markets. And though mobile-services revenue growth in developed markets is slowing, customers are finally starting to use cellular networks for more than just talking and texting.

Gateways to Service

Indeed, one of the big stories of 2007 was the belated takeoff of so-called mobile broadband, shorthand for the use of speedy cellular networks, instead of a wire or short-range Wi-Fi connection, for online access from a handset or a laptop. Analysts now say it won't be long before mobile broadband surpasses fixed-line connections to become the predominant Internet access method.

That prospect is setting off a scramble to roll out new moneymaking services that take advantage of speedier wireless connections. What mobile operators dread most is being relegated to the role of "dumb pipes," or providing commodity connections while other companies take home the gravy from online services and content. So they're trying to offer everything from music and video clips to social-networking services and broadcast TV on handsets.

What spooks operators is the enormous success of Apple (AAPL). The iPod and the iPhone have demonstrated how easy it is for consumers to eschew mobile networks for downloads and instead pump content directly from PCs into mobile devices. Sure, some people buy songs or video clips over the air, but many such services are still too clunky or expensive to use.