Telecel sees delay to Portugal's 3G mobile phones

date: 27th January 2001, source: telecomclick.com

The commercial launch of 3G telephony in Portugal, officially set for next January, will not happen before the middle of 2002 due to lack of equipment, a top official at one of the country's leading operators said.

Antonio Coimbra, vice-president of Telecel-Comunicacoes Pessoais , told Reuters it would be impossible to meet an end-year target set out in the state sale of four licences to operate the third generation of mobile phone services.

Some operators have even spoken of bringing forward the launch date.

"Everything points to it being an illusion to say that there is going to be UMTS (universal mobile telecommunications system) services in January, because the handsets will simply not be available until the middle of 2002," he said in an interview late on Thursday.

Apart from Telecel, the other successful bidders in the 20 billion escudo ($93 million) sale were Portugal Telecom , Sonae.com's Optimus and ONIWAY, controlled by EDP-Electricidade de Portugal .

Pilot services, enough to meet the conditions of the flat-fee state sale, would be in operation by January 2002 but on a very limited basis, he said.

"Commercially, it (the service) is not really going to be available until later," he said.

Coimbra said that the delay in the launch of 3G phones would benefit the intermediate GPRS (general packet radio switching) services which had also suffered problems.

He said that GPRS, which the company had intended to launch last November, has also suffered from a shortage of handsets.

"GPRS is a good example of what is going to happen to UMTS," Coimbra said.

Telecel now expects to launch GPRS, which offers faster, wide-band mobile phone capacity, in March and many of its services would subsequently migrate to UMTS.

Coimbra reaffirmed that the company intended to invest 400 billion escudos ($1.85 billion) over the next 15 years in its UMTS services, with a significant part concentrated in the first three years.

But he said the company would not need a capital call.

"No capital call will be made. If necessary we will seek bank loans or help from our shareholders," he said in reference to Britain's Vodafone Group which has a 51 percent stake.

Coimbra said that he did not see the increased mobile competition, with a fourth operator entering with the launch of the UMTS services, leading to excessive pressure on prices.

ONIWAY, a unit of EDP's telecommunications concern ONI, has no existing mobile phone service.

Coimbra said mobile phone tariffs were already the lowest in Europe and the level of subsidy given on phone equipment by the service providers was also very high.

"This shows the existing high level of competition and it is not possible to do much more," he said.

He said that the company was nearing a decision on technical partnerships for its UMTS network. It had had contacts with Siemens , Ericsson , Nokia , Nortel Networks Corp and Lucent .

"We are at the final stage and a decision could be made by the beginning of February,"

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