ITU Home Page International Telecommunication Union Français | Español 
Print Version 
ITU Home Page
Home : Office of the Secretary-General : CSD
Chapter Highlights from ITU Internet Reports 2002: Internet for a Mobile Generation

Chapter One:  The Big Gamble  

Next Chapter >>

                                                                                            Click here for ordering information

“It requires no great leap of the imagination to believe that the convergence of mobile communications and the Internet will produce something big… but it may take longer than you think”

Mobile communications and the Internet were the two major demand drivers for telecommunication services in the last decade of the twentieth century. Combine the two—Mobile Internet—and you have one of the major demand drivers of the first decade of the twenty-first century. That’s the theory, at least.

As Figure 1 shows, the two industries have exhibited remarkably similar growth patterns since the start of the 1990s, but with a lag of about two years. So, it requires no great leap of the imagination to believe that the convergence of mobile communications and the Internet will produce something big, perhaps even the mythical “sum that is bigger than its parts”. In this view, the convergence of mobile communications and the Internet would produce innovations, new applications and new services that would not otherwise be possible. For instance, the service of knowing the location of a particular mobile user, combined with the service of targeted advertising, should theoretically make it possible for local businesses to attract users that are passing by, within a certain radius. Similarly, multimedia messaging services will open up visual, more exciting person-to-person communications. Thus, the mobile Internet could give birth to a whole new family of services.

Exploiting the new opportunities offered by the mobile Internet will require high levels of capital investment, possibly higher than ever before in the telecommunication industry. Investors want to see proof that a market for mobile Internet services exists. But operators can’t provide that proof until they build the networks. Because of this “chicken and egg” conundrum, the mobile Internet is potentially the biggest gamble the telecommunication industry has ever taken on. The lesson so far is that the pioneers get burnt fingers: to date, more than US$ 100 billion has been invested in acquiring 3G licences, even before network construction and service roll-out costs are taken into account. The timing of 3G investment could hardly be worse, with venture capitalists running scared of anything that has the word “telecom” or “Internet” in it. Consolidation is on their menu, not expansion.

As previous waves of technological convergence have shown, we should not necessarily expect to see the commercial fruit of the mobile Internet for some ten or fifteen years yet. It will not happen straight away, but that does not mean it will never happen. It is worth remembering that the “hype” generated by a particular technological development often falls flat before market development begins to take off. Consequently, the popular view is that a particular development has “failed”, whereas the more accurate explanation is that market development has not yet got going properly. Those who forget their history are condemned to repeat it. So it is with some caution—and long-term vision—that the pioneers of this new wave of convergence must prepare their business plans.


Figure 1: Mobile and Internetidentical twins, born two years apart

Mobile subscribers and Internet users (millions)


Penetration rates (per hundred inhabitants), worldwide

Source: ITU World Telecommunication Indicators Database.


Box 1: Singapore—e-ready, but not so Internet mobile…

Singapore has almost 70 per cent mobile phone penetration, over 50 PCs per 100 inhabitants, and over one-third of its inhabitants are Internet users, making it one of the most ICT-connected and -adept nations worldwide. Internet use has been actively promoted by the Government, with evident results: Singapore is considered a world leader in ICT use in education, with innovative programmes run in schools and universities. Moreover, the high level of literacy in English means that Internet content can be easily accessed. The importance of the language factor is also highlighted by the fact that almost half of Singaporean adults whose first language is English are online (see chart below).  Singapore is a world leader in e-government applications. In line with its vision of becoming an “intelligent island”, the Government has promoted the creation of a broadband backbone network—Singapore One—available to all citizens.

Rather surprisingly though, the take-up of mobile Internet has been lukewarm. Although all three mobile operators, SingTel (the former incumbent), MobileOne (M1), and StarHub, obtained 3G mobile licences when these were auctioned in April 2001, none have yet proceeded to roll out 3G networks. There has even been pressure on the regulator, the Infocomm Development Authority of Singapore (IDA) to delay or abolish the 31 December 2004 deadline for national 3G network roll-out. The IDA, however, held to its position, arguing that European and Scandinavian regulators have not modified their 3G roll-out requirements, and that operators in those countries are on schedule to provide services according to deadline. Notwithstanding the optimistic regulatory stance, the operators themselves are not yet proceeding with 3G network roll-out, more cautiously opting to further exploit the possibilities offered by WAP and GPRS. SingTel Mobile, for example, plans to introduce MMS services in 2002.

Source: Adapted from ITU Internet case study on Singapore. See

Relevant links

ITU Strategy and Policy Unit

ITU ENUM Website 

ITU Case Studies Website

World Summit On the Information Society – Official Website




   Next Chapter >>


Top - Feedback - Contact Us - Copyright © ITU 2011 All Rights Reserved
Contact for this page : Strategy and Policy Unit
Updated : 2011-04-04