strategically important ground where wireless communications technology intersects with Internet commerce and banking.
Sonera, which in August joined with Citigroup Inc. to take a combined 40% stake in 724 Solutions Inc., a Toronto-based developer of wireless banking software, announced further alliances with Ericsson of Sweden, Cable and Wireless HKT in Hong Kong, and Lucent Technologies of the United States.
These arrangements revolve around technical initiatives such as GSM, the mobile telephone standard that is ubiquitous in Europe and spreading elsewhere; WAP, or Wireless Application Protocol, which many telephone and technology companies are rallying around; Bluetooth, an open specification said to be well suited for shopping with hand-held devices; and Radicchio, an effort by Sonera and others to promote public key infrastructure, or PKI, security in wireless commerce.
Sonera, a $2 billion company with 9,000 employees worldwide, has a business unit, Sonera SmartTrust, focusing on data security. Sonera senior vice president Harri Vatanen, head of SmartTrust, said that along with mobile telephony, RSA Security Inc.'s data encryption codes at highly secure 1,024-bit key lengths "are key components triggering the fast growth of mobile commerce."
He said that if projections by GartnerGroup of Stamford, Conn., are correct, then mobile phones "will be the most common client device worldwide by 2005. This means that the share of mobile commerce in the total market of electronic commerce is going to be far more significant than expected."
Sonera and Ericsson at the recent Telecom '99 exposition in Geneva said they had created the first digital signature for transactions on WAP phones, using Ericsson's new R320 model.
Digital signatures are derived from PKI encryption and digital certificates for authenticating users. The WAP standard with this "transparent, secure technology opens the door for us and service providers to the future in wireless e-commerce," Mr. Vatanen said.
Christian Testman, director of wireless e-solutions in Ericsson's GSM unit, added: "For mobile users, this means that wireless banking, ticketing, trading, gaming, and a range of other Internet services now can be transacted securely."
SmartTrust has its sights on Hong Kong, where the market penetration of mobile phones, exceeding 50%, surpasses that of personal computers or the Internet, said SmartTrust Hong Kong business manager Freddie Cheung. He said the mobile commerce services developed with Cable and Wireless HKT "will be the first to conform to Hong Kong Post's certification authority services, giving security for both parties in a transaction."
Citing projections that there will be 800 million Internet-enabled mobile phones worldwide by 2003 and that handsets will outnumber televisions by 2004, Sonera and Lucent said they would jointly develop e-commerce services with PKI security for next-generation phones and networks.
John Hughes, president of Lucent Technologies GSM/UMTS, said Sonera SmartTrust and Radicchio fit into a strategy to meet demands from wireless operators for "banking, stock trading, and other personalized services."