Why Your Cell Phone Stinks...

By Maryanne Murray Buechner

Here in the U.S., we've got software gods, Web commerce wizards and computer-chip kings. But when it comes to wireless technology, the Finns rule. Just look at what they can do with a cellular phone: buy a Coke from a vending machine. Run a car wash. Zap a digital picture to a friend. On this side of the Atlantic, we're just glad when our calls aren't cut off midsentence.

And it's not just the Finns' phones we fancy. The Swedes use theirs to pay utility bills. The French use them to check flight schedules, reserve hotel rooms and scan the traffic along Le Peripherique. This month marks the birth of the mobile video phone. Where? Japan.

The U.S. has lagged in cell-phone technology for the better part of this decade. While two-way text messaging over cell phones has for years been a standard service from London to Lisbon, and the chat method of choice for teenagers in Tokyo, only a tiny number of users in the U.S. have the feature. U.S. wireless carriers are on the cusp of offering Internet access; overseas, it's already happening. Cell phones as wireless modems for laptops? Works great--in Europe.

Why are we so deprived? One big reason: the whizziest stuff you can do with a cell phone requires a digital network, and the Europeans had a three-year head start implementing theirs. Moreover, they chose one network technology: GSM (Global System for Mobile communications). The use of a single standard puts them in a much better position to embrace the next big thing in wireless.

The Finns in particular have benefited from the nearly demonic devotion of one of their country's leading companies, Nokia, to cell-phone technology. Once a clunky national conglomerate, Nokia is the world leader in cell phones, and last year sold $9.5 billion worth. So far this year sales are up 50%; the stock price is up 40%, to about $86.

Going digital was a much rockier road in the U.S., mainly because the FCC chose to let competing technologies duke it out in the market. The result: Qualcomm, Ericsson and others squabbled over whose standard would "win." None did, so we're left with a hodgepodge of incompatible networks and a gaggle of abbreviations (GSM, CDMA, TDMA, IDEN) that are not only confusing but also confining, restricting us to a particular carrier's coverage area and delaying the roll-out of advanced services.

While the worst growing pains seem to be over, complaints about service continue. Mark Meyer, a lawyer and constant cell-phone user from Dobbs Ferry, N.Y., spends three months a year in Romania on business. He has two cell phones--one from AT&T for the States, the other from Romanian GSM carrier Connex. "You never lose a signal in Bucharest," says Meyer, "and the signal is always clear." But in New York, he can name five different spots along his 26-mile commute from Westchester to Wall Street where his phone will go dead every time. "It's maddening," he says. "We have to have a problem in New York?"

To be fair, the top U.S. carriers have a much bigger customer base spread out over a lot more territory than, say, a telecom in Central Europe. And here's another excuse: Americans, by and large, are not desperate for cutting-edge cell phones. They have fixed phone service that's cheap and ubiquitous. Demand for digital cell phones is a lot stronger in Europe and Asia, where land lines are much more expensive (thanks to the hated PTTs--Postal, Telephone and Telegraph monopolies) and where digital capabilities like exchanging text messages ("Meet me at the cafe") have become culturally ingrained. Mobiles have become so popular in Finland--57% of the population have one, the highest penetration in the world--that the colloquial term for one is kannykka, or kanny, which means "palm of the hand."

The same love affair is going on in Japan. Not even a player in this industry five years ago, Japan is expected to steal Europe's lead come March 2001, the target date for deployment of a high-speed network capable of moving wireless data as fast as 2 mbps. The so-called wideband CDMA network (Code Division Multiple Access) will be an exponential leap from the 9.6-kbps speeds of current digital networks. Europe is expected to upgrade its system to high-speed data services a few months after Japan (making an interim jump to 384 kbps sometime in between). As for the U.S.? We'll be lucky to get there by 2003.

The U.S. is beginning to close the gap on the feature side. Sprint PCS announced last week that starting late September, its customers will be able to use their phones to access Web content specially formatted for cell-phone screens and check their Web-based e-mail. The French and Belgians have been doing that for only six months. AT&T (whose earlier PocketNET service was limited) and other U.S. carriers are moving forward with similar plans.

The introduction of broader, consumer-friendly wireless data services may be the strongest indication yet that the U.S. is catching up to the Europeans and the Japanese. E-mail-by-cell might even make up for the years we haven't had text messaging. Some more good news: cell phones that double as personal digital assistants are also due shortly. But anyone waiting to dial up that Coke is still going to get awfully thirsty.

--With reporting by Kim Landry/Paris, Tim Larimer and Sachiko Sakamaki/Tokyo and Charles P. Wallace/Berlin

With reporting by Kim Landry/Paris, Tim Larimer and Sachiko Sakamaki/Tokyo and Charles P. Wallace/Berlin