World looks for a 3G lead

ON A windswept hillside on the Isle of Man, the chances of recouping the £22.5bn paid for third-generation licences has boiled down to 130 phones, a few laptops and a blue van.

In the new headquarters of Manx Telecom, colour-screen 3G phones made by Japanese electronics giant NEC are being put through their paces and Manx's computer-equipped van is a regular sight around the island as it tests connection speeds and new applications.

Manx Telecom, a unit of mmO2, is operating the first 3G phone system outside of Japan and has given away the 130 handsets to islanders in a bid to discover exactly how the new system will work and if consumers find it as essential as mobile operators hope.

The good news is that it does work, and well. In the van, connection speeds around the island are showing to be about 160 kilobytes per second (easily enough to watch video) and laptop internet connection speeds through the phones compare with the quickest available via cable modems.

The bad news is that the prospect of mobile operators making money from such ventures looks dubious. With debt-laden telcos now under pressure to conserve cash, investors have taken the view that the capital investment the licences entail has become a burden. Sceptics could point out the £5.94bn Vodafone paid for its 3G licence is 50% more than the current market value of rival licence holder mmO2.

Until better handsets arrive, the capabilities of the bulky phones are simply disappointing. Although Manx says that fast mobile net access, e-mail on the move, route-finding and home security are on the way, the current offering is very limited. You still need a laptop to watch video and access the entire web, which means the content available through the handsets is currently little faster than that of a WAP model. Pricing also remains a mystery and consumers may have to confront a multi-tier tariff system with business users paying for the highest connection speeds and general users coughing up less for slower speeds.

MmO2 losing its advantage

ALTHOUGH its network on the Isle of Man is the first working 3G system outside Japan, mmO2, the former BT Cellnet, does not expect to switch on its network on the British mainland before the middle of next year.

Although NEC built the system and made the handsets for mmO2's subsidiary on the Isle of Man, Canada's Nortel is supplying the core network for the British mainland. MmO2, under chief executive Peter Erskine, is promising open internet surfing and instant video streaming at speeds of between 64 and 144kbps.

Although the infrastructure build-out is not expected until the start of 2003, 4,000 mmO2 workers and other programmers are beavering away on applications for the new technology. Logica supplies the firm's current text messaging software but mmO2 says there is no guarantee the same firm will pick up the 3G multimedia messaging order when it is confirmed within the next month.

Core infrastructure supplier: Nortel; Radio infrastructure supplier: Nokia; Handset suppliers: None yet; Multimedia messaging: To be confirmed next month; Initial 3G coverage: Undisclosed.

Hutchinson 3G

AFTER selling Orange, Hutchison is returning to the mobile arena in Britain in partnership with NTT DoCoMo, which began its own 3G service in Japan last year. That should help minimise technical problems with the new network and may make Hutchison the first operator out of the blocks when its service launches around the end of September, under a so-far secret new brand name.

Most services are likely to be available at 64 kilobytes per second, but the official line is that there will be sufficient bandwidth for all applications. Although video and open internet surfing on handsets is unlikely at first, a contract for Premiership football clips suggests moving pictures will not be far behind. Handset prices and distribution strategy remain under wraps but the first two models will offer automatic switching to mmO2's current network when users stray from Hutchison's 3G coverage area.

Core infrastructure supplier: Nokia; Radio infrastructure supplier: Nokia and NEC; Handset suppliers: NEC and Motorola, with NEC camera-enabled handset available early 2003; Multimedia messaging: CMG; Initial coverage: 40-45% of the population, 8% geographical.

Orange

ORANGE has secured 1,000 sites for its 3G equipment and is expected to have its network commercially switched on by the end of the year. However, there will be no fanfare and trumpets for the new technology. Instead, Orange says the system will be sold on the features that it will bring to consumers.

Those are likely to include route finding and payment for goods and services through the handsets. 'I can't stress enough that we will never be launching UMTS (3G) as a technology, but as on the basis of individual services,' says a spokeswoman.

The group says it currently offers video streaming on its 2 1/2G service, but is not planning to make it available in the first stages of a 3G network. Open internet surfing will also come later on a network likely to offer speeds of 64kbps.

Core infrastructure supplier: None yet; Radio infrastructure supplier: Nokia; Handset suppliers: None yet; Multimedia messaging: None yet; Initial 3G coverage: Undisclosed.

Vodafone's fringe benefit

VODAFONE, the largest mobile phone operator, is promising a 'phased introduction' of video and music downloads for its 3G system, which should go live later this year. It will unveil a package of new-style applications ahead of the launch when it outlines so-called global data services, designed to work on GPRS (2 1/2G) and 3G networks, probably in the autumn. Vodafone guarantees the minimum service level at the fringe area of a network will be 64kbps, just enough for video.

Core infrastructure supplier: Ericsson; Radio infrastructure supplier: Ericsson; Handset suppliers: None yet, looking for dual GPRS/3G models; Multimedia messaging: Ericsson; Initial coverage: Major cities.

Germans last in line

T-MOBILE, the Deutsche Telekom unit and former One2One brand, expects to have its 3G network running during the second half of 2003, probably making it the last among the major operators to appear. The company says the timing depends on the availability of 'reasonable volumes of useful and usable handsets' and stability of the new technology.

'The services will mainly be an evolution of the services offered over GPRS,' says a spokesman. That means no video streaming initially, but the firm promises open internet surfing.

Core infrastructure supplier: Nokia/Nortel/Siemens; Radio infrastructure supplier: Nokia; Handset supplier: Nokia; Multimedia messaging: To be announced 1 June; Initial 3G coverage: Undisclosed.