Online Extra: The "Tremendous Shift" to Wireless

Siemens' Rudi Lamprecht has a bold prediction: In 2010 every new phone in Europe will be 3G-capable

That last few years have been rugged for Rudi

Lamprecht, a member of Siemens' executive board and the head of mobile communications for the Munich-based electronics giant. Siemens (SI ), which sells equipment for mobile networks as well as handsets, has battled through a collapse in the telecommunications market and now appears poised to be one of the main suppliers of equipment for third-generation networks. Recently, Lamprecht spoke with BusinessWeek Frankfurt Bureau Chief Jack Ewing about the outlook for the 3G rollout and the global shift to mobile communications. Following are edited excerpts of their conversation:

Q: To what extent are you seeing a transition from fixed-line to mobile technology globally?


A tremendous shift is taking place. There are already more mobile users than fixed-line users, and the number of mobile users is growing. Some people say mobile penetration rates are growing 20% annually, though some estimates are more conservative. Many people are using both. But I feel that 10 years from now, mobile will dominate. That doesn't mean everything is mobile. At certain times the air traffic will travel on the land-line network.

Q: Will we see new technologies to bring mobile telephony into the home? For example, some companies are working on phones that connect to the land-line via Bluetooth technology when people are at home and use the mobile network outside the home.


If it's Bluetooth, that's the big question. But yes, we're working on it. Indoor-outdoor convergence will be of importance, and Siemens will have an advantage. We're already present in 50 million households.

Q: How soon will this technology reach the mass market?


It's very complicated to predict. In the next five years, we will see big developments.

Q: How difficult will it be for existing land-line carriers to make this transition, given that they risk cannibalizing their own business?


I think they can utilize what they have. There are arguments, of course. But I don't want to get into the middle of the arguments! We believe in synergies. Mobility doesn't mean that everything needs to be mobile. In terms of bandwidth, the fixed environment will have an advantage for quite a while.

Q: What new technological developments do you see in the future?


We're concentrating on third-generation UMTS [universal mobile telecommunications system]. To start talking about another generation would not be wise. There's so much potential in current technology. We're just at the situation where [second-generation] GMS [global messaging service] was in 1991. We need to roll out the handsets, make sure applications are available. The whole telecom industry is overloaded by technology. The industry spends too much time talking in three-letter acronyms. We need to transport the technology benefits to end users.

Q: What do you see as the timetable for 3G?


By the end of 2004, there will be 12 million to 15 million users. In 2005 you'll see a mass market with 40 million UMTS terminals. In 2006 we'll cross the 100 million mark. This is a very bold statement: In 2010 every new phone in Europe will be 3G-capable. This is the kind of internal planning we're using.

Siemens was the first to install networks, and we're already at the second generation of base stations. We have been replacing some competitors' base stations. We have shipped 24,000 base stations altogether.

Q: What will be the most important applications for 3G?


There are two or three categories: Picture-video messaging, location-based services, and business applications. Some will be interlinked.

Q: How is the market for telecommunications equipment in general?


There might be a slight improvement, but it's still crummy. There are still a lot of vendors fighting for a smaller cake.

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