Ex-BT tech chief says 3G networks may never come

Setting up next-generation mobile phone systems is so expensive that some companies will collapse under the strain and the networks may never be built at all, a telecoms expert told the press.

``This is a fairly serious game of poker. Some people are betting everything on this technology,'' said Peter Cochrane, head of technology at BT and its third-generation (3G) phone research programme until November.

``If they can't find a solution, I think we will see companies collapse.''

``Europe has shot itself in the foot, and certainly the UK has, because I don't think we are going to see 3G,'' he said in comments carried on the BBC website on Tuesday that he made for BBC TV's The Money Programme, which is to be broadcast on Wednesday.

Some financial analysts say it could take a decade for the costs to be covered, but the phone companies insist 3G will prove a success.

Third-generation mobile phones -- being launched in Japan this year and most of Europe from next year -- will offer broadband services, which allow high-speed data transmission and provide Internet and video links.

Sophisticated handsets are expected to be able to guide drivers through towns and cities, receive email, or allow people to play computer games across the world.

But European telecom companies have spent around $100 billion on auctions to buy the licences in countries across Europe, with Germany and Britain the most expensive.

The ensuing debt is now causing some companies serious problems.

Cochrane called last year's auctions -- before the heaviest decline in confidence in the technology and telecoms sector -- ``a really good study in madness''.

``It was a bit like lemmings going over the edge of a cliff,'' he said.

Orange, BT, Vodafone, One2One and a consortium backed by Hutchison Whampoa paid out a combined total of 22 billion pounds for the five UK licences on offer, the money going into state coffers.

More money will be needed for developing phones and building networks which need thousands of new masts, which are also facing growing opposition from people worried about possible health risks.