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http://media.guardian.co.uk/city/story/0,7497,820685,00.html 3G faces brighter future than forecast

Mark Milner Monday October 28, 2002 The Guardian

Third-generation mobile phone networks in Europe are likely to prove a better commercial prospect that many of the gloomy projections suggest, according to a London-based consultancy.

Over the next five years 3G penetration will reached 50% in Europe and could be as high as 75% in some countries, the Thinking Box, said in a report out today.

“The image of 3G has had a roller coaster ride, starting as a ‘hip’ technology and ending up as an over-hyped revolution that will never happen. We have observed this ‘killing-off’ of 3G with great interest and surprise.” the consultancy said.

Many of Europe’s telecoms company have built up heavy debt burdens acquiring 3G licences and the costs of rolling out the new networks. Some companies have sought to cut costs by slowing down the network roll-outs. Queries have also been raised about how much extra customers would be prepared to pay for 3G, which can deliver more services more quickly, or whether they would want some of the services at all.

However, the Thinking Box says the expansion of 3G will be driven by operators which do not have existing customer bases and which will be very aggressive, especially on price, in pursuit of market share.

“Like it or not competitors will be obliged to follow.”

The consultancy warns operators against charging high tariffs as a way of getting a quick return on their investments. “SMS and voice tariffs on 3G must remain the same if not be diminished,” it said, though it believes that customers will be prepared to pay up to an extra €15 (£9.40) a month for 3G services.

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