Does this man have a direct line to the future?

`Mobile phones put the whole world within reach, and Vodafone is one amongst many companies that want to conquer it'
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The Independent Culture
IT PROBABLY should not be a matter for national pride that a British company has launched the world's biggest hostile take-over bid. Even so, there is something particularly gratifying about Vodafone's $107bn offer for Germany's biggest mobile phone company, Mannesmann.

After all, we are forever hearing that the UK is lagging in international competitiveness, with a dilapidated science base and a perpetual inability to turn hi-tech applications into commercial successes. How pleasing, then, to discover that this country has a world leader in mobile telephony, able to offer a sum equal to a quarter of annual UK government expenditure, for a Continental rival.

Forget the fashionable disparagement of the oiks who bellow down their mobiles on the train. Sure, the conversation always does begin: "Hello. Hello? I'm on the train", intruding everybody's banalities into the traditional commuter reserve.

But mobile telephony is a crucial technology, over which giant corporate battles are being fought and the stock exchanges are going mad . It will deliver the enormous benefits of new technology to consumers. In the process it will make fortunes for some businessmen and investors. In the last three months telecom shares have increased by more 30 per cent and have leapt again this week, partly on the back of this bid.

The Vodafone bid may be defeated - no hostile take-over has yet succeeded in Germany, and there is particular outrage there that a foreigner has dared to have a go. Mannesmann has many traditional defences it can draw on.

Still, it is only the latest in a spectacular series of mergers in the industry, in traditional as well as mobile telecommunications. Vodafone itself took over Airtouch, then America's biggest independent cell-phone company. Mannesmann has recently struck a deal to buy Orange in the UK. In the US, MCI WorldCom, itself a merged company, is buying Sprint, in the world's biggest agreed take-over. These are just the biggest - and, boy, are they big.

Part of the reason for the merger mania is the launch of the euro. The creation of a single currency has, as predicted, turned a notionally single market into a genuine one. Companies in all industries across the Continent are rethinking their business and jostling to become pan-European market leaders by merging with firms in other countries. The wave of mergers and acquisitions in Europe is already record-busting in scale, and investment banks report a long pipeline of planned take-overs.

One of the issues raised by the Vodafone bid, therefore, is whether or not British companies can stay in the European market on the same terms as rivals from countries that went ahead and joined the euro. If not, the potential costs of Britain's hesitation about the single currency look a lot more ominous.

There are, however, deeper forces driving the changes in the telecommunications business. The market structure of traditional telephony is still taking shape as governments continue to withdraw from what used to be national monopolies.

Nor has the potential of mobiles to leapfrog standard telephones been fully realised. By the end of next year about three out of five adult Britons will have a mobile, putting us behind the Scandinavians, on a par with the US and ahead of many other European countries. Even here, that leaves a big potential market up for grabs, with demand in developed countries growing at a rate of about 25 per cent a year. The non-industrialised world remains pretty much virgin territory.

We shall all want to upgrade again anyway; the technology is bounding onwards at a breathtaking pace. For once, Europe has the technical edge over the US, thanks to the early adoption of a single digital standard.

Phones are a classic network technology that becomes vastly more useful the more people can use it, so there are huge economies of scale that companies can tap into if common standards are set. Faxes are a good example; there is no point being the only person with a fax machine, but when everybody else has one they become indispensable, until they in turn are made redundant by another technology, such as e-mail.

As a result, Europe has mobile handset manufacturers as well as mobile service providers to give mega-US corporations a run for their money. Americans adore the neat little handsets Europeans can use (at a pretty steep price, admittedly) not only across Europe, but also in parts of the US and even other bits of the planet.

Experts predict that it will take only about a year for Internet access via mobile phones to move from the possible to the commonplace.

Already mobile handsets have converged with electronic organisers - in other words, the same bit of kit can make phone calls and contain your electronic diary and telephone book. The next step, thanks to the "wireless application protocol", is to make the Internet mobile.

Developers are working on applications such as getting local traffic reports and driving directions to mobile phones, or more general information such as the local telephone directory, and information about restaurants and cinemas.

Beyond that, mobile devices will send and receive e-mail and allow video- conferencing. High-powered executives will never have to leave the airport lounge - they will be able to do their entire jobs while in transit. Mobiles ought eventually to allow us to communicate with our fridges and ovens (although it is a mystery why people who cannot set a timer on the oven or even programme their video should be expected to manage instructing the same appliances through their mobile phone).

Mobiles can also signal where their users are, which raises some privacy concerns. But it is great for tracing 999 calls, and is also widely used in Japan by parents, who can keep track of their teenagers through a tracker website.

On top of all that there is e-commerce, of course - shopping anywhere, any time. This is exploding so fast that soon that annoying "e-" prefix can vanish, with online ordering just another alternative to the high street and mail order. It is a measure of the expected growth of these new types of mobile telephony that giant software company, Microsoft, is trying to get into and corner the market with its own proprietary system, Mobicom. If it is growing stupendously fast, Bill Gates wants it.

And no wonder. Enthusiasts argue that mobile phones - if such a restrictive noun can still be applied to these clever, multipurpose handsets - will eclipse the desktop PC, rather than, as some argue, digital television sets. After all, if you can do your shopping on the way home with a device that fits into your pocket, why would you wait to get home and sit in front of a large black box?

Certainly this is the view of Chris Gent, the chief executive of Vodafone. He was a very early convert to the wonders of mobile technology. There is indeed something magical about being able to dial 10 or a dozen numbers on a device that fits snugly into the palm of your hand, and find yourself speaking to somebody on the other side of the Earth.

So, with pocket-sized instant gratification in prospect, it is no wonder that mobile phone companies are scrambling to become king of this castle. The stakes are huge.

The Vodafone bid for Mannesmann looks like it will be bitterly fought. Even the preliminary skirmishes have reached the courts. Mr Gent launched the bid in the first place in reaction to the German company's agreed merger with Orange, which came as a shock as Mannesmann already had partnership agreements with Vodafone in France, Germany and Italy. Rumours swirl in the financial markets about whether Mannesmann will seek a "white knight", a preferred and preferably Continental purchaser, to rescue it from the British clutches.

Nationalism ought to be redundant in a wireless world that links person to person regardless of where they are. Yet mobile telephones appear to have become, instead, the latest arena of corporate imperialism. They put not only our whole lives, but also the whole world within reach, and Vodafone is one among many companies that want to conquer it.

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