Mobile phone that lets you watch TV and surf the Net.

Byline: SEAN POULTER

IMAGINE a mobile phone that allows you to watch football, listen to pop music, book a flight or order your week's shopping from the supermarket.

It will soon become a reality. The technology for this exciting communications revolution is to be launched within two years.

The idea of combining a video telephone with a TV set, personal computer and Internet access promises a commercial bonanza for operators, better services for users and a [pounds sterling]1.5billion windfall for the Government in licence fees.

Already some 13 companies are lining up financial bids for a licence to operate Third Generation - or 3G - mobiles in Britain.

Tesco, Richard Branson, George Soros and Paul Allen - who set up the world's largest corporation, Microsoft, with Bill Gates - are among those keen to win a slice of the action.

Industry experts believe there will be a billion mobile phones offering Internet access working around the world by 2003. Advances mean it will be possible to transmit huge amounts of data at incredible speeds to the new handsets, which will offer video phones with clear, moving pictures.

The technology behind 3G phones is called the Universal Mobile Telephone System (UMTS), which will be launched worldwide in 2002.

However, the UK could get there sooner.

While UMTS will offer the ultimate in speedy access to Internet and video services, several companies are currently developing existing technology to introduce some of these benefits to consumers earlier.

Already BTCellnet has a limited Internet access service known as Genie, which can flash up news headlines or the latest football scores to 400,000 subscribers.

Orange has gone a step further with High Speed Circuit Switched Data phones, costing around [pounds sterling]130 and offering much more extensive access to the Internet.

The operator will soon push the technology a step further by offering mobile video phones at a cost of [pounds sterling]1,000 a pair.

The next major breakthrough will come within six months with the launch of General Packet Radio System (GPRS) mobiles, which will allow for the transfer of Internet data at much faster speeds.

The scale of the technological advances is demonstrated by the speed at which the handsets can receive and process data.

Most existing mobiles work on the basis of receiving 9.6 kilobits per second, while the Orange system, or HSCSD, is around three times faster at 28.6 kilobits.

The GPRS technology takes the networks to a new level of sophistication with the ability to cope with 56 kilobits of information per second.

But the 3G phones now at the centre of a bidding war will be capable of processing 2000 kilobits of data per second, providing enough power to surf the Internet while having a video phone conversation.

BTCellnet spokesman Damian Peachy said: 'Everyone has seen the explosive growth of the Internet in the last couple of years.

'Imagine combining that power and access to information with the portability of a mobile telephone.' He gave an example of a football fan being suddenly alerted by the phone to a goal by his side in a key game. One click would replay the action on the phone's screen.

A video phone would, it is claimed, bring families closer together while it could be used to talk to the family doctor rather than make an appointment.

E-commerce Minister Patricia Hewitt said: 'The prospect of one or more new mobile operators, and the increased competition and innovation that this will bring, is good news for both UK consumers and the economy.' Greater competition would spur the faster introduction of improved services, fresh approaches and cheaper prices, she added.