Cellphones pick up a British accent
PARIS: 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 the center of gravity in cellular entrepreneurship from the Nordic countries, many in the industry say and a new study supports.
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 the 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. Another 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 closer 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 ascent and the Nordic comedown in an industry that now has more than 1.5 billion customers worldwide.
A study, commissioned by the 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 $3.5 billion, a year in business. A panel of judges selected a list of "50 to Watch" based on their size, stability and inventiveness; their sales alone total £1 billion annually.
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Other anecdotal evidence supports the shift. At the annual trade conference for the industry, the 3GSM World Congress, which historically has been held in France, about one-third of the exhibitors are British companies.
Today, Sweden, Finland, Denmark and Norway no longer have the same 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 long-time 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. The mobile market was farther away than most people thought" geographically. He noted that the fastest-growing wireless markets today were in developing nations.
When the mobile business started in the 1980s, supporting companies were drawn to the Nordics 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 invested in Scandinavian research centers 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 of 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 centralized 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, with headquarters on the outskirts of London, has become the biggest cellphone operator outside of 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 internationalization of the carriers has certainly helped in the U.K.," with Vodafone operating in 27 countries and O2 and Orange in several others.
France, Germany and Italy have certainly fostered many mobile phone businesses too, but 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 specializes in machine-to-machine communications, using wireless chips and software to link "dumb" devices like vending machines.
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, the Wyless communications director, maintains that the center of the machine-to-machine market also "has shifted from Scandinavia to the U.K. - but we do have offices in Scandinavia."
