Too early for UMTS

With negative signals from the global telecom market, Romania might have to wait for the launch of its UMTS at least until 2010, according to industry sources.

“The amounts spent by operators in other countries were huge as UMTS licenses require a completely new network,” the source said.

In the UK for instance, the cost of the most expensive license rose to about 7.2 billion pounds. In Poland, the licenses were worth around 375 million USD.

“I don’t think it is the moment to plan now for the attribution of the UMTS licenses,” Alcatel sales manager Emil Visloguzov told BBW. “We should rather see what other countries ahead of us have done.”

Ericsson PR and events manager Elena Radulescu said 2004 might be a good year to start bids for the UMTS licenses and launch the new mobile technology. “The market is then decentralized and everybody is preparing for that,” Radulescu said. “The investment itself is big but at the moment we’re just trying to prepare the market.” She said Ericsson will organize a road show in May with all Romanian GSM operators. Costs of setting up an UMTS network in Romania are estimated at around half a billion USD.

IT&C minister Dan Nica has announced he does not intend to launch any UMTS tenders until the international market shows signs of recovery. In France and Belgium there were fewer bidders than licenses on offer, while in the UK and Germany the amounts of money raised were far from expectations. The Greek Government is also taking into account the possibility of delaying the awarding of licenses towards year-end, while the Irish have been postponing a beauty contest for its four licenses since December last year.

Apart from high costs and lack of bidders, another problem is the cost of the equipment.

“Mobile phone manufacturers will not produce the equipment until licenses are awarded,” one source said. “That is why the market is currently suffering from a shortage of equipment.”

Also due to the high costs, the future UMTS services are expected to be used more by corporates rather than individuals.

“In Romania we’ll have this type of technology in cities like Bucharest, Timisoara, Cluj and Brasov, where the investment rate is bigger,” the source said.

Alcatel however announced it will produce third generation equipment for French-based New Orange, the subsidiary of France Telecom which includes the Romanian operator Mobil Rom. Officials with the Romanian subsidiary of Alcatel said the agreement would work in Romania with Mobil Rom too, when the licenses are launched.

Before seeing its first UMTS operators, Romania could however launch general package radio services (GPRS) by year-end, market analysts said. GPRS is a step closer to 3G, using a data services upgrade to GSM network, allowing a transfer of information in crowded traffic of up to 144 K. UMTS allows data transfer of up to two Mb/s in buildings, 384 Kb/s on the move for pedestrians and 144 Kb/s in cars.