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Special report: Beige box future dim

Euro numbers make bleak reading for tradition in IT sector

By the time the CeBit technology tradeshow hits Hanover on 13 March, there will be more mobile phone users than landline users in Western Europe. That's more than one billion subscriptions.

So why is the IT world looking so bleak, when gadgets such as mobile devices have pervaded our lives seemingly so completely?

According to the latest, tenth, edition of the European Information Technology Observatory, a report into our technofuture that covers nearly all the bases, the beige box is a dying beast. The traditional desktop PC will be replaced in people's hearts, homes and offices by portable devices such as notebooks, PDAs (personal digital assistants) and smart mobile phones.

In the UK shipments of desktop PCs are predicted to fall from 4.15 million in 2001 to 3.98 million in 2003 and appear to be in consistent decline.

Sales of notebooks are buoying the market and Eito estimates a rise from 1.343 million last year to 1.787 million in 2003. This should keep total shipments of PC systems growing through 2002/3, but this growth is very flat, reaching only 3.8 percent in 2003.

One of the more shocking statistics presented by Dr Bernhard Rohleder, managing director of Eito, in his presentation was that, though the IT and telecommunications tech markets in Western Europe reached a peak of growth in 1999/2000 of 12.1 percent and 14.5 percent respectively, these dizzy heights will not even be glimpsed in coming years. Eito expects growth to claw back to just 8.8 percent for IT and 6.8 percent for comms by 2003.

Eito is a research initiative sponsored by, among others, CeBit, the OECD, EICTA (the European Information and Communications Technology Industry Association) and Deutsche Telekom.

The UK IT and telecomms industry is suffering the same drop-off of growth that the rest of the EU and even the US are, but the factor in which the UK is really behind in Europe is in broadband.

Both Eito's MD, Dr Bernhard Rohleder, and Thomas Wills-Sandford, director of ICT at the electronics indsutry body FEI and player in the Broadband Stakeholders Group, which launched the report yesterday, agreed that the UK had a lot of sock-pulling yet to do to get broadband out to the people.

Fundamentally, the take-up of broadband in the UK has been stymied by its price, both men said.

"One area where we are dramatically behind [in EU metrics] is broadband," said Wills-Sandford. "But the picture has changed in the last few days," he added, referring to BT's announcement this week that it would cut wholesale ADSL broadband charges. "The general picture [presented by Eito's figures] compared to the rest of Europe is good, with the exception of broadband."

"I'm delighted [by BT's price announcement]," said Wills-Sandford. "I think broadband has the capacity to transform society."

Wills-Sandford also said that, now e-commerce and competition minister Douglas Alexander has been replaced as chairman of the Broadband Stakeholders Group, the group has gained more independence. He said he believed the group could 'get more done' as a result.

Broadband isn't the only thing that has kept the UK's head under the water over the last 12 months. Now that all the third generation mobile phone network licences are done and dusted, the figures show that companies which wanted to run 3G networks in the UK and Germany have been stiffed. In total, firms paid around £397 per capita for the licences in the UK. In Germany the amount is slightly less at £374.

These figures compare to, for example, £129 in Italy, £58 in Austria and a paltry £8 in Spain.

"It [the licence fee disparity] is a failure of the single market, and the UK government is very pleased with itself for that," said Wills-Sandford. "I think it was a disaster for the industry."

Dr Rohleder agreed. "This means there was a real failure in European policy making," he said.


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