Chief executives from some of the world's largest mobile phone companies agreed yesterday to share standards and strategies for second and third-generation (3G) mobile communications. Gathered at the industry-backed GSM Association (GSMA) conference in Istanbul, Turkey, members representing 530 network operators and 750 million users in 180 countries voted to make major changes to the association's governance and direction. The vote means that the association will now be run by a 21-member board, including chief executives from 12 of the world's largest mobile operators such as China Telecom, China Mobile and Hutchison Telecom. GSMA deputy chairman Craig Ehrlich said the board's new-found influence would enable it to influence handset manufacturers and help turnaround the battered telecom industry. 'We have seen precipitous drops in our stock values, yet we have a great story. Our industry is still one of the few industries in the world that is growing across the board in double digits in subscriber growth and things like that. There aren't a lot of industries in the world with such a success story,' he said. 'I actually think it is quite historic because what we've done is taken the 12 largest operators in the world [and] with nine other operators, [we] will be geographically diverse, small- to medium-sized, as well as the new 3G players like Hutchison.' Mr Ehrlich said the progress of 2.5G and 3G wireless services had been hindered by a lack of communication between major carriers. As a result, manufacturers had trouble designing the appropriate handsets. According to figures released by Hong Kong's Office of the Telecommunications Authority, less than 86,000 customers had 2.5G mobiles in June, up from less than 75,000 the previous month. With agreements on interoperability, standards and future services recommended by the carriers themselves, the manufacturers would have a clearer sense of direction. 'When you get the 12 largest operators in the world, you're talking about 400 or 500 million customers being represented by these board members. It's an incredible economy of scale story,' Mr Ehrlich said. Agreements made between the board members would help not just the operators, but content providers and handset and network equipment manufacturers. 'When we can speak with a united voice, the manufacturers will sit up. They'll appreciate it when we give them the guidance on how they should put their products together, it'll make their job easier.' For many years, customers have complained about the slow progress in deploying new telecoms systems. Mr Ehrlich admitted that the hype had frequently resulted in disappointment and growing scepticism among users. 'We've proven to the world that we don't implement fast enough. That's why some people have lost confidence in us.' However, he said the success of short messaging service (SMS) had given the industry a glimpse of a way out of the slump. The GSMA estimates that 400 billion SMS messages will be sent this year. 'SMS has created a tremendous new revenue source that we never had before. All of these new services and enhancements to our technology, 2.5G and 3G, are going to provide comparable, if not larger, potential incomes,' he said. Gartner says the worldwide figure for all forms of mobile messaging will rise to US$22.3 billion by 2006. The Yankee Group believes the multimedia messaging service (MMS) market will reach US$10 billion by 2006, with US$44 billion in annual service revenues. SMS did not take off until local operators co-operated on interoperability. Once that was achieved, the system grew rapidly. However, the industry is finding it more difficult to roll out MMS. 'The world is getting so much more complicated, but it's an opportunity for us. The new services like 2.5G, as well as 3G and applications like MMS, all of these are revenue creators. They're opportunities for the industry, but there are significant interoperability issues involved in all of them,' Mr Ehrlich said. And unlike SMS, the telecom companies, many of whom have invested heavily in 2.5G infrastructure and 3G licences, cannot afford to wait years for deployment. The GSMA hopes to cut the wait from settling on a standard to deploying it from at least a year to no more than six months. 'I have absolutely no doubt, and terrific confidence that MMS is going to be as successful as SMS,' he said. Mr Ehrlich, the former managing director of Sunday Communications, admitted that Hong Kong's failure to establish SMS interoperability had held back the local industry's development. 'Hong Kong was the leader in the wireless industry from the 80s through to the early and mid-90s. Unfortunately, we lost our way as a leader of the world. Now one could argue that's not that critical other than for your own ego. In any case, the shame for us is that our leadership was lost in order for us to have a lot more influence on our Chinese market, and that's a bit of a shame.' However, he said the presence of several Hong Kong and Asian carriers on the GSMA's board would help inspire a stronger local content business.