Mobile phone operators who ploughed millions of pounds into third generation investments will not see a return on their outlay for about twelve years, according to a sobering report from Forrester Research.
In a survey, nine out of ten senior executives at European 3G licence holders expressed confidence that the technology, which features audio, video and online facilities, will catch on. They even went as far as to predict 50% adoption by 2007.
Forrester claims that such optimism is misplaced and it is more realistic to expect one in ten mobile users to be using Universal Mobile Telecommunication Services (UMTS) in five years time. A recent study from A.T. Kearney found that less than a third of users had any plans to upgrade with cost and ignorance being primary deterrents (see 3G Is A Turn-Off With Consumers, Finds Study).
Last week, Nokia launched the 6650 which is the world’s first phone to be compliant with the Third Generation Partnership Project (3GPP) standards for 3G services. However, Forrester believes that mobile operators should concentrate on enhancing General Packet Radio Services (GRPS) for the next five years and make the introduction of 3G functionality a gradual process. Licence holders still face the added costs of builiding a 3G infrastructure and marketing handsets and the report estimates that the average European operator will not move into the black until 2014.
The UK picture The latest findings provide little encouragement for UK operators who forked out £22.5 million for fifteen year licences to run 3G networks. O2, Vodafone, T-Mobile, Orange and Hutchison all aim to roll out commercial services in the next two years but Forrester has reservations about their targets and budgeting. There is a particularly bad prognosis for Hutchison, the latest entry into the 3G market, which plans to launch a service in November but will not break even until 2017, says Forrester.
