Telecom Vendors Say 3G Disappointed, Promote Next Generation
March 11, 2007
BARCELONA (Dow Jones) - 3G is dead, long live 4G. Telecom-gear makers at the 3GSM trade show here on Thursday admitted that third-generation technology, or 3G, has failed to deliver on its promise of growth from an array of nifty new multimedia services.
"3G hasn't lived up to the expectations of operators, vendors and, frankly, consumers," said Simon Beresford-Wylie, CEO designate of the networks joint-venture of Nokia and Siemens. He was speaking in a keynote address.
Operators worldwide have spent billions buying licenses to run 3G networks, only to find that the technology was much harder to implement than they had expected.
Even where 3G networks are up and running, after years of delays, demand for the snazzy video and multimedia services they make possible has been disappointing.
Expectations have been scaled down to the point where many mobile operators now view 3G as a way to boost their capacity for voice calls in overloaded parts of their networks, rather than as the revenue goldmine once promised.
Beresford-Wylie's peers and rivals, including Nortel Networks CEO Mike Zafirovski and Alcatel-Lucent boss Patricia Russo, acknowledged that 3G networks simply aren't fast enough to allow users to browse the Internet at speeds to which they've become accustomed on their PCs.
4G: Don't talk about it
From a pure technology perspective, at least, a solution's at hand: 4G.
A raft of 4G technologies, which go by acronyms including HSPA, Wi-Max or LTE, are all poised to hit the mainstream. There's no formal definition of 4G, though these technologies are all high-speed wireless networks covering a wide area.
The bad news? Mobile operators and consumers may not be ready to hear about it.
"Content providers and consumers don't care about the technology; all they want is a certain amount of speed to be delivered to their phone." said Mike Reid, a director at 3i Group, a UK-based venture capital firm that invests in Internet and telecoms technology firms.
"It doesn't matter to them what the technology is called," Reid said.
Beresford-Wylie agreed, saying users want their phone-based Internet experience to be comparable to that of the computer.
"There's no such thing as mobile Internet. It's the Internet. The phone is just an enabler," Beresford-Wylie said.
Alcatel-Lucent's Russo said some of her company's customers have been less than receptive to a technology leap.
"I've had customers tell me not to talk to them about 4G, but to help them instead generate revenue from the 3G networks they have invested in," she said.
Earlier this week Arun Sarin, the CEO of Vodafone Group, downplayed the urgency of investing in a 4G technology, saying that WiMax, in particular, "isn't ready for prime time."
Sabuib Nawiris, the CEO of Orascom Telecom, the Middle-East's No. 1 operator by market capitalization, was similarly dismissive of WiMax. He made it clear he doesn't intend to invest in the technology at the moment.
"Someone has to prove to us that it's cheaper," he said.
(END) Dow Jones Newswires
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