Spain, Brazil to join forefront of 3G

date: 15th March 2001, source by: idg.net

Spain is the next country in line to join Japan, Korea, Sweden and Finland as a pioneer of 3G telecommunications, according to Greg Tarr, chief investment officer of venture capital firm M-Werks Mobile Internet Fund.

"Spain has recently confirmed it will roll out 3G services in August this year," he said at the Internet World conference here Wednesday. "They have previously been feeling left behind by the technological revolution."

The Spanish regulatory authority previously said that operators must introduce commercial services to 23 cities by August in order to comply with their license conditions, a schedule that was considered very tight.

In September last year, Spain's second-biggest mobile operator, AirTel Movil SA, said that it had selected Nortel Networks Corp. to build the initial phase of its 3G network, in a deal valued at US$100 million.

In October, Telefónica Móviles SA announced it had contracted Motorola Inc. to build a 3G network as well as interim GPRS mobile data services. The GPRS service began in January.

And although most Latin American countries will not roll out 3G services anytime soon, Brazil is likely to be an exception, according to Tarr.

"Brazil is very dynamic, very keen in this area," he said. "They have signed deals already with Korean companies for PDA (personal digital assistant) devices and mobile phone games."

The importance of games is shown by the fact that they account for 50 percent of all data transmitted by mobile phones in Korea, Tarr said.

In general, the outlook for 3G is positive around the world, despite recent negative media reports, according to Tarr.

"Japan is holding firm for May to introduce its Foma 3G services," he said. "It has the ability to roll out 384k bps (bits per second) services across metro Tokyo at that time and within a further 12 months will have nationwide coverage."

But there remain several challenges to a general roll-out of 3G services worldwide, according to Tarr. There may be a shortage of skilled engineers to handle simultaneous roll-outs by several carriers, a lack of handsets, some standards and interoperability issues are still unsolved, and there is a lack of software designed for 384K bps networks, he said.

In Japan, though, the 3G business model is already established, according to Tarr. NTT DoCoMo Inc., which is to launch the service, already has between 15 and 20 different pricing plans, and the Foma 3G service will simply be an addition to this structure, he said.

By 2005, there will be 300 million subscribers to 3G services worldwide, according to Tarr, and that will be the year that the U.S. finally sees widespread 3G adoption, some years after most Asian and European nations.

"The U.S. is really a third-world country when it comes to telecommunications," he said.

By that time, Asia will account for 49 percent of the world's mobile Internet users, the U.S. 29 percent and Europe 22 percent, Tarr said.

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