Industry talks up demand as 3G launch nears

Europe's investment in third-generation (3G) phones will be paid back within 10 years, the chairman of an industry association has claimed, just weeks before the UK's first 3G service is set for launch.

Speaking at a Berlin event to showcase mobile services, Dr Bernd Eylert, outgoing chairman of the UMTS Forum, suggested that mobile customers in Europe are already on an evolutionary path to UMTS.

"While voice will continue to dominate usage patterns for many years to come, 3G comes into its own as customers demand high bandwidth services like video conferencing, multiplayer gaming and high-speed internet access," he said.

"UMTS networks offer application developers an advantage that 2G and even 2.5G cannot satisfy in the long term.

"For the industry, UMTS means more network capacity, more speed and a platform to offer enriched capabilities. For end-users, however, it simply means exciting new services.

"The growing success of services like picture messaging in the Far East shows that customers' mobile needs and expectations are evolving."

In the UK, the first 3G phones will go on sale by the end of March from Hutchison's 3 operation, offering services such as video calls and downloadable video clips of news and sport broadcasts from Sky and ITN. 3 has ordered two million handsets.

The phones will be discounted to just £200 for the first 20,000 customers, with models from NEC and Motorola then being sold at £399, and a third handset with a Qwerty keypad available at £449.

But analysts have cast doubt on the operators' optimistic sales targets.

3G's appeal for business use is the prospect of reliable, fast mobile connectivity to corporate applications, but 3 is describing its target market very much as 25 to 35 year-old urban consumers.

"We'll talk about business use later in the year when the network's been bedded in and is more reliable," a 3 spokesman told vnunet.com.

Some 3,500 base stations will provide 3 with coverage for half the UK, with the rest covered by deals with current 2G operators.

Subscription packages for data services will be available at £59.99 and £99.99 per month, although another spokesman for 3 promised cheaper options later in the year.

"These are the high-end prices for heavy users; the top 10 per cent," he said.