3G Remains an enigma to experts claims new report

date: April 27, 2001 - source: Visiongain visiongain.com

A new survey of the 3G industry, conducted by UK telecoms analysts Visiongain, finds that industry experts have no clear idea of when 3G will arrive, how fast it will be, or how consumers will react to it.

Conflicting reports from operators and manufacturers have left experts deeply pragmatic about the launch of the advanced wireless data protocol, with most not expecting to see widespread 3G launches before the second half of 2003. When it comes to the speed of the networks, analysts are equally in the dark. One in three think that speeds under 150 kbps will be the norm, yet about the same number thought that data could be over four times faster.

The conclusive findings available were mostly negative. Experts are highly worried about the availability of handsets, with more than half of those questioned thinking that delays of many months would be caused to roll-outs by the lack of 3G devices. Less than one in ten think the fees that operators paid for high-cost 3G license auctions, such as in Britain and Germany, were justified.

Ben Thacker, senior analyst on the Visiongain report, commented that these findings were inevitable. "In accordance with most wireless technologies, 3G operators have been high on glamour and low on facts. The industry has too few concrete numbers to work with, and until the figures are forthcoming, the experts are resorting to caution. Wireless players have been burned before over WAP, and it looks like they will wait to see how 3G plays out before committing themselves."

In the interim, GPRS technology appears to be a safer bet. "When you compare GPRS to GSM, and then look at 3G, the jump to 2.5G is clearly more dramatic," thinks Thacker. "Packet-switched networks are popular, as i-mode in Japan has demonstrated, and could give WAP a new lease of life. The improvements 3G offer over GPRS are considerably less impressive, and far more expensive for telcos to boot." Visiongain's survey found that more than three quarters of analysts expect GPRS to delay 3G roll-out to some extent.

Will 3G recover? "Probably, because there's just too much capital and time invested in it for operators to walk away, but not for a while. Since GPRS is more cost-effective, the real profits should be made there for now - at least until some content comes along that justifies the 3G data speeds. There's just not enough out there for users to want high-speed data access. The content's not there, and the devices won't be along for a while."

Visiongain's 3G Report for 2001 is available now, priced at UKP499 for a standard copy of over 180 pages, from 3GReport2001@visiongain.com

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