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In-flight mobile telephony will boost revenues

DUBAI— Fees for mobile telephony during commercial flights could reach 2 billion euros in Europe alone by 2010, and advancement in this technology will have a significant effect on Middle East business, according to Booz Allen principal, Uwe Lambrette.

Mobile technology is advancing so quickly that passengers onboard commercial airlines will soon be able to use their own mobile phones while in flight. Onboard base stations hold substantial revenue potential for mobile network providers and airlines, said Booz Allen, a global strategy and technology consulting firm.

"The Middle East in general and hubs such as Abu Dhabi, Dubai, Jeddah and Riyadh in specific are witnessing increasing traffic year-on-year so in-flight mobile telephony will certainly have an impact on the region," said vice-president, Karim Sabbagh "If you combine that with the fact that mobile phone penetration is advancing rapidly in our region you can see why something such as onboard base stations would be of considerable importance."

The latest figures released by Etisalat yesterday show the mobile penetration in the UAE has now reached 120 per cent. Alliances and strategic partnerships will be key to maximising the market's potential, says Lambrette. He believes air travel with full mobile accessibility — except for take off and landing — will be standard by 2010, with usage rates exceeding 100 million passengers in Europe alone. He also predicts that many airlines will permit and offer mobile telephony this year. Airlines could gain significant competitive advantage if they invest in the technology.

Lambrette cautions that mobile operators and airlines will only sustain high-margin pricing during the introductory phase of this service. After 2008, the projected market penetration is expected to reduce the price per minute almost to the level of regular mobile telephony. The average per-minute price is projected to begin at 1 USD and drop to 50-75 Cent per-minute within three to five years of market introduction. Said Ghassan Hasbani, principal Booz Allen Hamilton, "I think we can conclude that this development will eventually be second nature to air travelers in the not too distant future. Before long we will have the inexpensive option of using our mobile phones as we travel anywhere in the world."

Other pre-conditions for success and growth in mobile telephony include the option for travels to use their own mobile handsets and technologies that do not feature usage barriers, such as credit card phones.

"These pre-conditions will have to be met to enable the success of onboard base stations," said Karim Sabbagh. "But once airlines and developers realise the profit potential of this technology, they will undoubtedly work together to overcome these minor obstacles." Deploying an on-board base station on an aircraft reduces the emitted signal strength to a level that eliminates noticeable interference. The signal is then backhauled via satellite to the terrestrial telephony network. Any of the technologies available today will allow a sufficient capacity for on-board mobile telephony once a flight has reached cruising altitude.

Mobile telephony is currently banned onboard commercial flights because of its potential to disturb an airplane's sensitive electronic systems. Mobile handsets emit high-powered signals when searching for an available base station for incoming and outgoing calls. Those high-powered signals can cause interference with an aircraft's electronic circuitry, especially when it is out of reach of a base station.