O2 in no hurry for 3G roll-out

Mobile operator O2 has refused to rule out further delays to its 3G launch, which is now expected in the second half of next year.

02 chief executive Peter Erskine indicated that an autumn or winter 2004 launch for its 3G service would fit better with availability of handsets and suitable applications to deliver quality data services, such as video, games and CD-quality audio.

But he warned that the 3G launch could be delayed even further. "Nothing is set in stone," he said.

"I've always said that I don't expect material 3G revenues until 2005.

"What we've learnt from GPRS is to wait until there are numbers of good quality handsets, wait until the applications are ready, and wait until the transfer can be done easily.

"We're building [the 3G network] in the UK but we will press the button on the real investment at the last possible minute.

"We won't be investing hundreds of millions if the handsets and applications aren't there, although we're confident that they will be by the second half of 2004."

David Williams, chief technology officer at O2, claimed that no operator would offer complete 3G coverage any time soon.

"Nobody will launch a ubiquitous 3G network," he said. "We will not be there straight out of the gates. It will take years. It will be a slow process, but it will be seamless for the user.

"As long as the customer expectations are managed properly, 3G can be rolled out with a thinner network."

O2 will use an ATM-based IP backbone to link its 2G and 3G networks, so that users can move from one to the other without difficulty.

The operator, which has committed to building only the mandated minimum 3G network in the UK this year, has until the end of 2007 to ensure that it covers 80 per cent of the UK population.

Under an agreement with Oftel, its 3G network must cover 20 per cent of the population before it can sign any roaming agreement, noticeably off the agenda of its UK plans.

While roaming is part of O2's network strategy for Germany, the operator said that it would only share sites with rival T-Mobile in the UK to reduce the capital cost of building its 3G network.