Argument rages over the future of 3G – News

Argument rages over the future of 3G – News – Datamonitor analyst Nick Greenway’s views on wireless telecoomunications

Datamonitor analyst Nick Greenway certainly triggered a heated debate when in a recent note entitled `Death bell tolls–3G RIP’ he urged mobile operators to abandon their 3G plans.

Greenway voiced concern over the level of capital expenditure on building and then subsidising 3G services and highlighted the decision made by Telefonica and Sonera to axe their German joint venture, Quam, in which they wrote off over 8 billion euros. He went on to note that several first and second tier operators look increasingly likely to delay 3G service launches and that venture funding for small content houses had all but dried up.

In a hard hitting note he says the uptake of any mobile data services so far has been `shockingly low’, that there are few handsets that work well and that no consumer is prepared to pay more than around 250 euros for any sort of advanced device.

According to Datamonitor, low uptake will cause a cash-vacuum and that won’t service the billions of dollars of debt in license and infrastructure costs.

Greenway’s advice, however, was roundly condemned by, among others, former Ericsson director and UbiNetics (CEO), Bjorn Krylander as “damaging, wrong and a cheap shot”. He accused Greenway of over reacting.

“This technology is here to stay. With voice revenues expected to peak and then fall within the next year, operators urgently need to find a way to make up for these losses.

“New services like 3G will be one of the best ways of differentiating from the competition and thereby increasing consumer value. There will be rich rewards for those operators that play the long game and successfully launch commercial third generation phone services.”

What do you think? Are you among the optimists in the industry who talk of the problems of the last few months as a setback, but not a crisis?

Or do you agree with Nick Greenway’s analysis that for licence holders it’s cheaper to abort 3G plans despite the sunk costs and that we are witnessing the `long, drawn-out, death’ of 3G.

Email the editor, at neiltyler@uk.dmgworldmedia.com and tell Communicate what you think about the future of 3G.

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