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Edition: U.S. Article Comments (0) Save Email Print Reprints Most Popular Most Shared CORRECTED-FEATURE-Debate over GM eggplant consumes India 12:03am EST Top Taliban commander held in Pakistan | Video 8:49am EST Ahmadinejad not taking Clinton comments "seriously" 8:29am EST Olympian figure skating pair: We've won gold, let's have a baby 3:54am EST Kevin Smith fuels row over "fat" plane passengers 15 Feb 2010 CORRECTED-FEATURE-Debate over GM eggplant consumes India 12:03am EST "Love" hormone may help autism symptoms: study 15 Feb 2010 First black Olympic figure skating pair electrify crowd 1:53am EST Top Taliban commander held in Pakistan | Video 8:49am EST Ahmadinejad not taking Clinton comments "seriously" 8:29am EST Smartphones a growing problem for networks Kate Holton BARCELONA Tue Feb 16, 2010 8:58am EST Related News Blackberry maker RIM warns of bandwidth crisis 12:01am EST Nokia, Intel team up in phone software race Mon, Feb 15 2010 RPT-MOBILE FAIR-WRAPUP 3-Nokia, Intel team up in phone software Mon, Feb 15 2010 Microsoft CEO mum on iPhone talk Mon, Feb 15 2010 Samsung focusing on smartphone push Sun, Feb 14 2010 Sony Ericsson phone models Vivaz Pro, Xperia X10 Mini Pro and Xperia X10 Mini (L-R) are displayed at the Mobile World Congress in Barcelona February 15, 2010. Credit: Reuters/Albert Gea BARCELONA (Reuters) - Google must not be allowed to dominate and block cash from flowing more widely through the mobile telecoms system or else the network operators will not be able to invest to cope with the growing demand for data traffic, Vodafone said on Tuesday. Technology Vittorio Colao, chief executive of the world's largest cellphone networks operator, told the Mobile World Congress trade fair in Barcelona that instead new business models needed to be created to cope with the demand for data services. The comments added to the impression at the annual gathering that while handset makers, chipmakers and service providers are all flourishing from the rapid growth of smartphones such as Apple's iPhone, operators are being left to worry about how they are going to profit when they must also fund the related improvements needed in network capabilities. However, BlackBerry-maker Research in Motion Ltd said it was well aware of the problem, saying that smartphone manufacturers must start developing less bandwidth-guzzling products or risk choking already congested airwaves. As users abandon traditional cellphones for netbooks, wireless modems and feature-rich smartphones, like Apple's iPhone, wireless data traffic has exploded and is threatening to saturate network capacity, co-CEO Mike Lazaridis told Reuters in Vancouver before setting off for the trade fair in Barcelona. "Manufacturers had better start building more efficient applications and more efficient services. There is no real way to get around this," Lazaridis said. "If we don't start conserving that bandwidth, in the next few years we are going to run into a capacity crunch. You are already experiencing the capacity crunch in the United States." Colao said the industry was at a key point in its development, as it adapts to the new economic realities of the smartphone and the ever-increasing amounts of data that consumers wish to consume. In order to succeed the industry needs to allow operators, content owners, application developers, search and operating system owners to develop new business models, to enable the operators to continue to invest in new and faster networks. Colao picked out two areas of concern. Within the search and advertising market, he said one player, Google, dominated the industry and held around 70 to 80 percent of the market, which he said was something that should be "looked at." He said there was a also not enough competition in certain fixed line markets in Europe, which could affect the supply of higher data speeds. Colao said the industry needed to look to alternative business models and urged regulators to give them the opportunity to experiment. Examples he gave included allowing operators to charge customers more for higher or guaranteed bandwidth and content providers to guarantee the delivery of their content. He also said applications should be transferable between devices. "Let us work together to deliver truly competitive, truly open and truly sustainable technology," he said. DRASTIC MEASURES Spain's Telefonica said last week it was considering charging search engines and a source at the Spanish firm told Reuters they had previously discussed the proposal with other European operators. Vodafone's call for a different approach stands in contrast to the makers of operating systems and those involved in the production of the handsets. Samsung Electronics and Sony Ericsson unveiled new high-end smartphone models on Sunday aimed at improving their positions in the more lucrative part of the phone market. On Monday Nokia, Intel and Microsoft unveiled new operating software for the top end smartphones and Texas Instruments told Reuters at the fair on Tuesday it was enjoying strong demand for its wireless chips due to the continuing rise of smartphones. "Smartphones are absolutely, positively the hotspot," Greg Delagi, the head of TI's mobile operations said. "That's what's driving the industry, it's the place where there's opportunities for differentiation, there's ability to win new customers." And he also gave an indication that things may only get tougher for the operators, explaining that TI was working on new capabilities such as filming and sharing three-dimensional video on smartphones which are even more data intensive. (Additional reporting by Georgina Prodhan, Tarmo Virki in Barcelona and Nicole Mordant in Vancouver; Editing by Greg Mahlich) Technology Add a Comment More from Reuters Simon Property offers $10 billion for General Growth NEW YORK (Reuters) - Simon Property Group Inc made what it called a $10 billion offer for General Growth Properties Inc that would end one of the largest U.S. bankruptcies on record and combine the two largest U.S. shopping mall owners. Barclays profit tops $18 billion Iran says will respond to any new sanctions New York manufacturing picks up but China sells U.S. debt Top Taliban commander held in Pakistan | Video Wall Street rises on solid earnings results, data » More Top News John Kemp: Why Greece should default A bailout is a mistake. Rebuilding market discipline means creditors have to take a loss at some point, and Greece is a good place to start. Commentary Greek contagion: One hell of a tail risk Greece must make "additional efforts" Global Markets Analysis: China's spending problem With Greece in a debt crisis and the U.S. deficit under close watch, China finds itself in the center of a very different kind of spending blame game. Full Article China seen re-evaluating yuan Factbox: Five political risks to watch China © Copyright 2010 Thomson Reuters Editorial Editions: Africa Arabic Argentina Brazil Canada China France Germany India Italy Japan Latin America Mexico Russia Spain United Kingdom United States Reuters Contact Us Advertise With Us Help Journalism Handbook Archive Site Index Video Index Analyst Research Mobile Newsletters RSS Podcasts Widgets Your View Labs Thomson Reuters Copyright Disclaimer Privacy Professional Products Professional Products Support Financial Products About Thomson Reuters Careers Online Products Acquisitions Monthly Buyouts.com Buyouts Europe: Buyouts Conferences: Venture Capital Journal EVCJ International Financing Review International Securitisation Report Project Finance International PEhub.com PE Week Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. Thomson Reuters journalists are subject to an Editorial Handbook which requires fair presentation and disclosure of relevant interests. NYSE and AMEX quotes delayed by at least 20 minutes. Nasdaq delayed by at least 15 minutes. For a complete list of exchanges and delays, please click here.

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