A substantial proportion of the billions of dollars poured into optical telecommunications networks over the past few years was spent in anticipation of a torrent of data which, in the event, failed to materialise.

Data volumes, of course, thanks principally to the continued expansion of the internet, are still growing faster than voice. But the collapse of many internet companies, together with the slow acceptance of online activities such as shopping and banking which were expected to generate unprecedented data call volumes, means that only a fraction of the installed capacity has ever been used.

Application service provision, which was expected to generate huge amounts of network traffic through the transmission of complex software, has similarly failed to take off.

Experts calculate that only about 2 per cent of the optical fibre laid in the US and Europe has been "lit", that is, provisioned and in use.

Now it is certain that, in the fullness of time, all of this capacity and more will be needed and used for data transmission. This will simply be the inevitable consequence of technological and social development. Predicting the likely timetable is, however, a more difficult task.

This will not, of course, be of much comfort to those responsible today for investing in and laying the fibre because they are unlikely to see a return on their outlay. Some will go into liquidation; others will be taken over or forced to merge as part of an industry-wide consolidation.

A reasonable question is how these "big pipes" of the global telecoms network will be filled after the disappointments of the past three years. It seems possible that personal data, underpinning transactions of all kinds, will be the primary candidate.

The argument is that the mobile phone handset and/or the personal digital assistant are set to become the all-purpose personal device. They have already taken the place of address book, diary and calculator. It is easy to see them assume the roles of electronic wallet, driving licence, passport, and so on.

The secret is the Sim card within the phone, the module which stores subscriber details. Modern memory technology means the card could store very much more information. And the power of the processors in a phone mean the information can be manipulated as easily as in a conventional computer.

Consumers would be able to pay for goods and services simply by transferring funds from their account using their phone. Experiments are already in train with outdoor advertisements fitted with Bluetooth short-range radio communications technology.

The advert, the content controlled by digital technology, would be able to interrogate a consumer's phone or PDA and then tailor its message to the customer profile of the owner. Purchasing the advertised goods could be initiated using the phone.

Medical history, credit status, curriculum vitae: all of this information could be stored in a pocketable device. A combination of the information stored on the device coupled with a password or, perhaps, a biophysical characteristic such as retinal pattern could give incontrovertible proof of an individual's identity.

Now all of this is already technically possible, but it raises interesting social questions. An individual could carry his or her entire life history around loaded into the memory of a phone but what would be the consequence of loss or theft of the device? And how much information should a Bluetooth-enabled device be able to glean by scanning the memory of a mobile phone?

One solution to this problem would be for personal data to be stored in encrypted form in network servers, protected from hackers, virus writers and the like. On each occasion that personal information is required for a transaction, it would have to be transmitted, in encrypted form, through the network to the phone to be stored temporarily to facilitate the transaction.

Hence loss or theft of a phone would be merely an inconvenience rather than the disaster it would be if it was loaded with all the data underpinning an individual's existence.

None of this would need network speeds of the kind which will eventually be available through third-generation technology. Such a system would, nevertheless, generate large amounts of data traffic, enabling operators to make a more rapid return on their networking investments than seems likely at the moment.