Alcatel admits delayed 3G and GPRS launches
By Catherine Bremer, Reuters
22 February 2001
French telecoms equipment maker Alcatel said on Thursday it did not expect
third-generation UMTS mobile phones to hit the market before 2004, pushing back
its earlier forecast by a year.
Alcatel, which this week launched its first GPRS (general packet radio service)
mobile phone to speed up online services on GSM networks and plug the gap
before UMTS, blamed the delay on the time and investment needed to develop the
technology.
"The roll out of 3G will take three to five years from now, whereas last October we
were saying two to three years. We're looking at end-2003, early 2004," Michel
Rahier, head of Alcatel's mobile unit, said at a news conference at the GSM World
Congress in Cannes.
"UMTS terminals will take over in 2007, not 2005. The pace is going to be a bit
slower than we thought a few months ago, which means the GPRS lifecycle will be
longer. The availability of terminals and services are key and this takes time," he
said.
After sluggish WAP phones failed to grab consumers last year, industry watchers
are worried that a delay in high-speed mobile services could further dent the
battered telecoms sector, which is laden with debt and fending off questions about
when mammoth 3G investments will pay off.
Adding fuel to their jitters about when revenues will start flowing from high-speed
services, Alcatel's GRPS phone is, at 14.4 Kbits/sec, only slightly more powerful
than today's WAP phones.
Early GPRS may fall short of expectations
The phone, due to be in the shops around May, offers "always on" Web access,
which should banish the frustrating connection delays that have hit sales of WAP
phones and enable users to pay by kilobyte of data rather than per minute.
But the handsets only have a quarter of the capacity needed to offer fully-fledged
Internet and video services, and upgraded versions running on four data channels
are unlikely to reach the necessary speeds before year-end.
The only other GPRS handsets on the market, recently launched by Motorola also
offer around twice the 9.6 Kbit/sec capacity of today's WAP phones.
Alcatel, which will supply its GPRS technology to Portuguese mobile operator
TMN, said it was hopeful of reaching a deal to supply Orange before the end of the
first half. The company has also been shortlisted by Orange parent France Telecom
to supply UMTS solutions, along with handset makers Nokia and Ericsson.
"I don't believe the GPRS market will explode until 2002. There are lot of big
technological questions today, and our clients cannot demonstrate that these
phones will work really well," said Jacques Combet, Alcatel business systems
director said.
"The technology is not yet bringing what people expected, and operators want to
avoid the disappointment they saw with WAP," Combet told Reuters.
Rahier said the delay meant Alcatel - which signed a deal this week to supply
Vivendi's SFR cellphone group with a UMTS network - expected other UMTS deals
could be three to six months away.
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