It'll be good to talk, shop, or bank with the mobile of the future

It's a video-camera, television, home shopping and Internet terminal; certainly not anything as ordinary as a phone. But that's what the mobile phone of the next century will be like, Barbara Roche, the trade and industry minister, predicted yesterday.

The shape of phones to come was sketched out by Ms Roche as she unveiled the third wave of licensing for parts of the radio spectrum, to create a new range of high-tech services.

Many digital mobile phones are already able to send and receive data, and at least one already has an integral keyboard and small liquid crystal screen so that users can access the Internet from almost anywhere.

But the new phones, which will exploit improving digital technology and completely replace the old, analogue variety first introduced in the 1980s, are expected to offer the same sound quality as landline telephones. That should mean that the crackles and interference which still plague analogue mobile phones will be a problem of the past.

Since their introduction, mobile phones have enjoyed almost uninterrupted growth - apart from one hiccup when the previous government licensed an analogue system which could send but not receive calls.

It was a commercial failure, as consumers waited for better digital phones, which followed early in the 1990s.

A number of companies are believed to be working on systems that will beam broadcasts from mobile phones up to a receiving device, sending messages and images around the world.

The new services, called Universal Mobile Telephone Services, should also allow users access to faster e-mail, video conferencing, mobile electronic banking and databases from their mobile handset.

Ms Roche said Europe had led the world in the development of mobile phone technology and Britain was at the forefront of this research.

Licences for the new bandwaves are expected to be auctioned off before April 1999 with services coming on line in 2002.