Just because a country has a very high percentage of its residents online, doesn't mean it will also have a high percentage of people participating in electronic commerce. And the combination of mobile devices and the emerging Bluetooth wireless technology could "catapult" Europe ahead of the US.

The countries in Europe with the highest use of e-commerce are the UK and the Netherlands, although they do not have as great a proportion of population online as do the Scandinavian countries.

Sweden, Finland and Denmark, for example, have the highest penetration rates for Internet access in Europe, but are not taking the lead in e-commerce, said Gartner Group analysts during a press briefing session at Gartner's European Symposium/ITxpo '99, being held in Cannes until Thursday.

Internet usage in Europe will grow more than 70 per cent this year, with the number of Europeans online reaching 60.4 million this year - up from 35.3 million in 1998, according to Gartner, which issued revised predictions yesterday.

Certain European populations are using the Internet primarily for information and communication, rather than e-commerce, said Alexander Drobik, vice president for e-business transformation at Gartner.

Government attitudes toward e-business, banking laws that hinder or encourage the electronic sharing of information, the cost of telecommunication access and government policies toward taxing online goods and services, all play a part in the disparity, said Anne-Marie Roussel, research director for Gartner Group. "You would think that where you have the most users, you have the most buyers - not true," Roussel said.

In France, for instance, e-commerce is slowed by the French experience with Minitel. Minitel is a proprietary system operated by France Telecom SA, where users are supplied with a Minitel terminal with which they purchase goods and services. "People are used to buying online because of Minitel, but Minitel proved to be a barrier," Roussel said. The cost of buying a PC to go online and the fact that unlike the Minitel, most Web sites are in English, has limited Internet commerce in France, Roussel said. selling goods are in English limits Internet

Ultimately, penetration rates may be less important than overall population for vendors evaluating which markets to enter. "It isn't really important that Iceland has a huge penetration rate: there are only 250,000 people there. What kind of a market is that?" asked Petra Gartzen, principal analyst with Gartner's Dataquest. Germany, on the other hand, may have lower acceptance of e-commerce, but vendors can scarcely afford to ignore such a huge market.

Europe will eventually catch up with the US with regard to e-commerce, but it will not do it by increasing its PC penetration, agreed the analysts. "The minute people are liberated from the PC, the sooner we will see significant growth of e-commerce," said Nigel Deighton, research director for Gartner.

Mobile devices are being adopted four times as fast as the Internet is in Europe, said Deighton. Mobile phone are therefore likely to be the most important e-commerce devices within a few years, because of their ubiquity, utility and usability, he said. Emerging technologies such as Bluetooth, which will allow mobile phones to communicate with other devices and which may eventually provide a direct link into payments systems, will speed up e-commerce development.

"We could catapult ahead of the US," Deighton said.

In Europe "40 per cent of consumer e-commerce will be conducted using a wireless device by 2004," Deighton predicted.

Digital television is also likely to have a role in the expansion of e-commerce beyond the PC, said Paul O'Donovan, research director for digital TV at Gartner. Digital TV penetration will reach 47 percent in the U.K. by 2003, 40 percent in France by then, and at least 25 percent in Germany, O'Donovan said.

In consumer e-business, digital TV and mobile phones will be as important or more important than the TV, the analysts agreed.