Third-generation wireless communications took a step forward last week when Nokia showed off its first 3G handset and Ericsson demonstrated handsets that can switch between GSM and 3G networks.

The Nokia 6650 3G handset offers a camera-phone with colour screen and dual-mode capability. It will be released in the first half of 2003 and will cost between £155 and £470, depending on the operator, said a Nokia spokesman. Its colour screen is larger than displays on GSM handsets, and will be useful for the video streaming made possible by always-on, high-speed connections - expected to be a major 3G selling point.

The dual mode lets users roam between GSM and 3G networks. Talk times of up to two hours and 20 minutes were promised under Wideband Code Division Multiple Access (WCDMA) 3G calls and up to two hours and 40 minutes under GSM. Standby time is up to 14 days, but no figure was available for data rates.

Although Nokia's handset is not due until next year, the preview of a device from the world's largest handset maker may boost confidence in 3G.

Ericsson last week also demonstrated a dual-mode handset, handing over between GSM and WCDMA networks and delivering a variety of voice, data, and video applications at speeds up to 384kbit/s. The company expects to sell 3G handsets from the second quarter of next year. The ability to switch between GSM and 3G modes without dropping calls will be important for the success of 3G.

The new devices will be welcomed by mobile operators such as Hutchison 3G, which plans to launch its 3G network in October. Ericsson said it has already demonstrated its handset to the operator, but did not say whether a deal has been struck.

Location-based services, another key element for 3G, will become more widespread thanks to the announcement last week of a single-chip Global Positioning System (GPS) unit from Motorola. Its Instant GPS chip is intended for mobile phones as well as devices such as two-way radios. The chip is due in limited quantities from November.

Richard Dineen of analyst firm Ovum said Hutchison's 3G network would probably focus initially on a few major cities before a second phase of rollout next year. "The market is in no mood to support leaps of faith," he said. "Operators are likely to concentrate on urban areas, where demand is greatest."

Battery life is likely to be a concern for users considering a move to 3G, because more power is needed to support the back-lit colour screens and complex applications of 3G handsets, said Dineen. "Handset battery technology has not improved at the same rate as information processing requirements," he added. "The secret is to squeeze greater efficiency from the technology."

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