Stephen Timms MP

Releasing the Value of Enterprise Mobility

There is now clear and growing evidence that business investment in ICT has made a big contribution to output growth in the UK, and to improved labour productivity, over the last decade. We want to help UK companies further improve their competitiveness and productivity, helping them work out how they can gain through better use of ICT and E-business. It is a key aspect of our aim to help achieve prosperity for all.

We have set a goal to make the UK a leader in E-business. International benchmarking places us close to leading countries at a number of levels. For example, the Economist Intelligence Unit's measurement of "E-readiness" placed us 3rd in the world, level with the USA in 2003. This is a major improvement over the past four years and provides an excellent foundation for the future. But others are not standing still either, and we need to do even better - and we are taking action in a number of areas to make sure that we do so.

Our benchmarking studies have shown that larger businesses are making more sophisticated use of ICT than their smaller counterparts. Building awareness of the benefits to smaller businesses of using ICT effectively has been core to the remit of the Government's "UK Online for Business" programme. Through its adviser network, over 300 ICT advisers deliver front line advice to small and medium sized enterprises through Business Links and other channels. As well as the adviser network, there is a lot of very useful work through the regional champions and the E-business clubs that have been established. The UK Online for Business website, with its extensive information resources, attracts 50,000 visitors a month.

There has been good progress. Our 2002 E-business benchmarking study found that over 80% of UK businesses have a website, 91% have access to the Internet and 87% have adopted E-business solutions to reduce costs and improve efficiency. To help further realise the full benefits of ICT, UK online for business is now promoting a more sophisticated "E-business" approach. Using ICT to improve internal processes and to build deeper relationships with customers, partners and suppliers. Freeing and sharing information between networks and locations to allow it to be efficiently tailored at every level across the business. An approach that addresses not only the technology but also the changes that are needed to business processes, skills, culture, and leadership.

Successful E-business change is driven from the top. Without this leadership it is unlikely to succeed or be sustained.

It is not just a challenge for the private sector. Government conducts something like 5 billion transactions a year with citizens and businesses spread over 20 large departments, 480 local authorities and more than 200 agencies.

We are committed to a programme of radical improvement in public services. E-Government gives us a new opportunity for flexible, responsive, high quality services. The power of ICT gives us scope to redesign public services in order that they truly meet peoples' needs - services that are more responsive and that increase the efficiency of government. We have in the UK now one of the most advanced E-government infrastructures in the world and we are on track to meet our target to have all government services available electronically by 2005. Our focus now is on increasing the take up of those services. Voting via mobile text messaging has emerged strongly through the electronic voting pilots.

There will be a big impact on business. Local authorities are required to be capable of 100% trading electronically by 2005. Suppliers that are unable to trade electronically will simply lose business that they would otherwise have expected to win. No business trading with local authorities can afford to be left in that position.

When I was appointed as Minister for E-Commerce in May last year, broadband was at the top of my agenda. The key challenges then were convincing the doubters of the value of broadband and making it a success in the UK. We had been lamentably slow to get started.

But we have seen remarkable progress in the past year. It took us until last October to hit a million broadband connections in the UK, but it now looks very likely we will hit three million before the end of this year. While growth in some other places, which were quicker off the mark than us has tailed off, the number of broadband subscriptions in Britain is going up by over 30,000 a week, and if anything that number is increasing. We are making good progress towards our target of the most extensive and competitive broadband market in the G7 - we recently moved from 4th place to 3rd for the G7 competitiveness table, overtaking the USA. Broadband is now within reach of 80% of UK households, and that proportion will rise to at least 90% by next year.

Isabella Moore, President of the British Chambers of Commerce, said recently of a survey among their members: "Broadband is taking hold in Britain. More than half of all respondents, (52 percent), believe that broadband is critical for their business to succeed."

The Broadband Aggregation project launched in July encourages the most effective use of public and private procurement in broadband solutions. The £1 billion procurement the Government plans in order to provide broadband connectivity to every hospital, GP surgery and primary and secondary school will be managed as a powerful lever in extending broadband availability into new areas.

Given the rapid pace of recent progress by BT and others, I issued a call yesterday for us to take, in partnership, with the industry the next big step in broadband deployment. I want us all to work together more closely over the next two years, to do all that we can for the goal of a Britain in which broadband is available - not in 90% of communities, not in 95% of communities, but in every single community by the end of 2005, so delivering a huge boost to the competitiveness of the UK economy. Without a doubt, 3G will be part of that competitiveness picture.

One of our priorities is to get the regulatory framework right. We are determined to continue with a regulatory regime and a legal and fiscal framework that allows competition to flourish. A regime that gives the necessary confidence to consumers and meets the need of E-business. In a world where communication technologies are converging and regulatory distinctions are increasingly irrelevant, our creation of the new single regulator Ofcom will bring a much more strategic overview to the whole sector. It also brings the prospect of de-regulation and a commitment, through a specific remit in the legislation to Ofcom, to a light regulatory touch regime. Wherever possible we want competitive markets to make regulation redundant. And nowhere are the benefits of a competitive market in communications more clear than in the development of mobile over the past few years.

We are working across government and with the sector skills councils to emphasise the relevance of ICT skills and to meet the changing skills needs for industry that evolving technologies will bring. We launched in the summer the new Skills Strategy ' 21st Century Skills'. The strategy made ICT skill the third skill for life alongside literacy and numeracy with broad entitlements for all. We are also investing an additional £1.25 billion by 2005/6 in science, technology and engineering to boost the UK's economic performance and raise levels of innovation and growth. We will shortly be publishing the results of our innovation review at the DTI, where we have been looking at what we can do to boost innovation in the UK economy and so build UK competitiveness.

It is not so long ago that people used to say it would need Government subsidies to get the benefits of mobile to less populated parts of the UK, and into the hands of the less well off. What has actually happened is that competition between the service providers has delivered those benefits to us. I am always impressed, when conducting my constituency surgeries in East Ham Town Hall, that when people who I know are on very low incomes come to see me, they invariably these days are able to give me a mobile number for when I need to contact them in the future. The mobile industry has given us a great example of competition between the service providers spurring innovation, in this case in particular with the pre-pay mobile option, and making a powerful contribution to inclusion in our community as a result.

A survey by the Henley Management Centre and Teleconomy found that 46% of 25-34 year-olds said they could not live without their mobile. Some survey respondents said losing their mobile would be like suffering bereavement. And the range of capabilities now of mobile equipment far surpasses what we were imagining only a few years ago, with long battery life, built in video cameras, global positioning and Internet capability.

I was intrigued to see last week that NTT DoCoMo has created a wristwatch phone that uses its owner's finger as an earpiece. I couldn't help wondering whether, what if a caller rang and wanted to speak to a colleague, whether it will become socially acceptable to stick a finger in a colleague's ear? But this has been a wonderfully innovative industry. That innovation is vitally important for us, and we are determined to maximise its benefits.

It was very important for us that, earlier this year, along with Italy, the UK became the first major market in Europe to roll out a 3G service with the launch of "3" by Hutchison 3G. I'm an enthusiastic user, and I have been intrigued how widely already I can use the capabilities - downloading the latest ITN news bulletin and watching it on my mobile on rural train journeys for example.

I don't share the downbeat character of some of the commentary on all of this. It is a new technology. A new entrant provides the first network. The services are new. GSM and GPRS networks have had years to iron out their problems. For a fair assessment of how we are doing, compare the launch of 3G with the launch of the first GSM networks and I think you get a more balanced picture of how successful a launch 3G has had.

A newspaper article some months ago quoted an industry report that was pessimistic about future prospects because of the large sums of money paid for spectrum licences, technical difficulties, and the lack of consumer demand. The point of the quote was that the report was about GSM, not 3G. The GSM Association estimates that at the end of 2002 there were 787 million GSM subscribers across the 190 countries of the world. And 3G is the next big step forward.

A recent report by the telecoms industry research group, Analysys, predicts that by the end of this year 3G will have attracted just 1.3 million active mobile subscribers throughout Western Europe. I used to write reports like that for a living, so I always pay close attention to what they have to say! They expect a shift from GPRS to 3G beginning in 2006. By 2008, they believe 3G will be the dominant mobile technology and will generate over 80 billion Euros of revenue in Europe. The prospects are in my view very promising indeed.

In July 1997, just over six years ago the government published a consultation document "Multimedia Communications on the Move - Mobile Phones for the Next Generation". The consultation set out the government's proposals for implementing 3G in the UK. The consultation quoted industry projections "that around 30% of the UK population - perhaps approaching 20 million people - will be regular users of a mobile phone by the early years of the next century". There are now some 50 million subscribers in the UK, and over 70% of people have a mobile. My Italian counterpart Marizio Gaspari told me that there are now in Italy more mobile phone subscriptions than people. It has become one of the most inclusive technologies in society. And there are more chapters of that success story still to be written.

Companies have been offering mobile data solutions since the early 1990s for applications such as communicating with fleet vehicles. Business use of mobile, including text messaging and email, is now commonplace. We have access to a variety of compact mobile devices - smart phones, PDAs, laptops to communicate with the office. The people out of the office increasingly need to be in contact with the people and information back in HQ. Giving field workers, such as the sales and marketing force or maintenance engineers' real time mobile access to central company and information resources can provide an invaluable competitive edge. To quote one of your speakers today, Pat Brans, of iAnywhere Solutions, "Empowering a mobile workforce with mobile, high-speed, secure data will lead to benefits such as increased productivity, improved inventory management and ultimately increased customer satisfaction for businesses and their customers." She is right, and I am excited by the capabilities of UK developers to deliver the systems making a reality of those applications and to address successfully the vast future world market for them.

There have been many who have worried that the prospects for 3G will be impacted by the rapid development of Wi-Fi. Intel tells me that we have more wi-fi hotspots in Britain today than the whole of the rest of Europe put together. Is that a problem? I don't think it is.

I see 3G and Wi-Fi as complementary. I was very interested to have a preview this morning of the demonstration you will be seeing later showing a live handoff between 3G and Wi-Fi. I was recently in the US where they have very enthusiastically embraced Wi-Fi and I was able to see for myself the benefits this technology can bring. It has particular potential in enabling broadband access in rural areas where other technologies - such as fixed or satellite - may be inappropriate or too expensive.

But the conclusion of most of the people I spoke to in the US was that Wi-Fi would generate acceptance of broadband availability outside the office, leading in turn to demand for fuller mobility which can only be met through 3G.

3G technology now has the ability to allow mobile access to your office e-mail, the Internet and company intranets from anywhere in the UK with 3G coverage and at broadband speed. The range of potential services and applications is huge. Services that provide real efficiencies, differentiation, and competitive advantage to businesses. There is a huge opportunity here for the mobile industry, and a challenge in convincing enterprises of the benefits. Enterprises are understandably cautious. But if companies are to release the full value, they will need to build mobility into the fabric of their business processes.

The challenge for the mobile industry, equipment suppliers, operators and service providers is to work together to produce viable solutions, tailored to real business needs. Solutions that are affordable and easy to implement, that are based on open, interoperable standards, that meet concerns on security, and that show clear returns on investment.

I am confident the industry will rise to that challenge, and I am delighted to see you coming together here today to explore and promote the benefits. It is very important for the UK Government that we have one of the world's most dynamic, creative and innovative telecommunications markets. The 3G Enterprise Alliance is doing great work in driving up awareness and promoting enterprise mobility - your theme today.

Have a great conference, and let's keep working together to make the most of the fantastic potential of enterprise mobility opened up by 3G - for the benefit of all of us, and of our economy, and of our society.

Thank you.