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Next in line: a new world of mobiles

A futuristic trade show is revealing new ways to control almost anything. Gideon Spanier reports from Barcelona

The mobile industry pleads that it is over-regulated and struggling to grow in Europe, but it doesn't look like it is suffering that much at the booming Mobile World Congress trade show, which opened yesterday in Barcelona, Spain.

More than 60,000 delegates are in attendance, up sharply on last year, and hundreds of global firms are competing to have the biggest, glossiest exhibit to showcase their latest devices and apps.

The Chinese phone manufacturer Huawei has built a pavilion that is so big it looks like a bus station, while Google's colourful stand features a fun slide, a robot which makes mobile phone cases for delegates, and a free juice bar that is mobbed three deep.

It's not just phone networks, manufacturers and technology developers who now come to Barcelona. The US car giant Ford has a major presence. Mobile technology means a driver can unlock a vehicle remotely or pay for motor insurance in real time based on the number of miles you drive.

The big idea is that mobiles can change almost every aspect of life, from household appliances to monitoring patients' health or harvesting crops. It will soon be easy to embed a mobile phone chip or SIM card into almost anything, as is evident at the futuristic "Connected House" exhibit, where the TV set, the heating and even kids' toys can be controlled remotely by mobile.

One example is Kibot2, a cute children's toy robot, made by the South Korean firm KT, which features a touchscreen instead of a face that lets the user access apps, games and songs via the web. It even allows video calls so a parent who is away from home can appear on screen and read a bedtime story.

It's not only innovation but also necessity that is driving change. The big mobile operators need to find new income because regulators have forced down the cost of voice calls, text messages and roaming phone use overseas.

The rise of smartphones, tablets and other embedded devices means it is possible to generate new revenues from mobile internet use and "cash-less" commerce. But this also requires investment in a new high-speed 4G networks, known as LTE, which can handle this extra demand.

"The data traffic is growing rapidly in our networks, with some predicting a 30 times increase in five years' time," said Enrique Blanco, chief technology officer at Telefonica, parent company of Britain's O2. He demonstrated how the new 4G service, which is being piloted in London this year, can carry around 10 times as much as traffic as the present 3G system.

But investment in LTE is a major issue as mobile operators must plough tens of billions of pounds worldwide into not only building the infrastructure but also buying the 4G spectrum from national governments.

Vodafone's chief executive, Vittorio Colao, and Telecom Italia's chairman and chief executive, Franco Bernabe, both used speeches to warn about how "excessive" regulation on pricing and costly spectrum auctions are harming the ability of mobile operators to invest. "The industry must make money and be able to reinvest," explained Mr Colao, warning that the European telecoms industry "is not growing".

Doubtless critics such as the small but noisy group of trade union and anti-capitalist protesters gathered outside the entrance of MWC would dismiss this as special pleading. But Mr Colao's argument is that Europe, including Britain, whose UK Trade & Investment body has a prominent stand at MWC, risks falling behind other emerging markets.

Chinese, Indian, Russian and Latin American firms have a high profile at this fair as emerging markets offer the biggest opportunity for growth. Many operators unveiled cheaper smartphones as they look to make it more affordable to access the mobile web and make transactions.

Telefonica announced a tie-up with the web browsing firm Mozilla to make a low-cost phone platform, which uses the latest open internet language, HTML5, and could cost well under £100. Orange also unveiled a cheap own-brand smartphone, called the Santa Clara, powered by the US chip-maker Intel, while Nokia announced a new cut-price version of its Windows Lumia smartphone, called the 610.

There are plenty of high-end devices on display too, but the leading player, Apple, maker of the iPhone and iPad, does not bother to attend.

Getting consumers to use their smartphones as payment devices – instead of coins and banknotes – is the other big theme. Vodafone has linked up with the credit card company Visa to let users pay with a "mobile wallet" in a scheme that will debut in the UK later this year.

Other, smaller players are already benefiting from mobile commerce. Neil Fullman is UK chief executive of Get Taxi, an app which lets smartphone users not only book a cab but also monitor its progress, pay for it and get a digital receipt. "We're creating our own 'mobile wallet' inside the app," he explained.

Everyone agrees that competition is fierce, and little wonder that the fair is moving to a new, bigger location in Barcelona next year.