Cautious on 3G in Cannes
At Cannes 3GSM, the forecast for 3G mobile is a delayed rollout..
23 February 2001
By Paul Lavack
Cannes, that elegant yet strangely kitsch playground for 'seventies-throwback bon-vivants, this week played host to the 3GSM conference in Cannes. Business 2.0 was there, mingling with the great and the good of the mobile industry.
What are we going to do next? was the prevailing mood. With billions having gone into securing 3G licences, the race is now on to find the killer apps and content that will justify the investment.
The result? A conference with plenty of surface noise (much of it provided by the lines of men in suits making WAP phone calls on the Front), but also an underlying tension. At the Ericsson press conference, for instance, the company gave what amounted to an open invitation to small developers to bring their bright ideas to Sweden.
A cautionary note was struck by Dr Irwin Jacobs, founder and chief executive of US Qualcomm, the US electronics group behind third generation mobile phone technology. Dr. Jacobs said that 3G services were unlikely to be roll out until late 2004 or early 2005, in contrast to most European operators, who have previously suggested 3G will be ready from 2002 onwards.
And rollout of GPRS, the "2.5G" intermediate mobile product, is already 18 months delayed. In any case, Dr. Jacobs isn't hugely keen on GPRS: "I don't think it will be that great a substitute for 3G," he said.
Talking about companies like Ericsson, Nokia and Motorola that have dominated GSM, he compares the handset market with the computer industry where you had 35 - 40 different manufacturers. Dr. Jacobs sees the same thing developing with mobile handsets.
Dr. Jacobs predicts a huge market for 3G in countries like China, Korea and Japan, countries where, due to comparatively low consumer PC penetration, Internet access will be primarily through handsets.
Michel Rahier, head of Alcatel's mobile phone division, also indicated that 3G handsets were likely to be launched in late 2003 or early 2004, a year later than previous forecasts, with significant market penetration as far away as 2005. Alcatel blamed this on a delay in orders caused by the recent collapse in telecoms shares.
The uncertainty regarding the speed of 3G market penetration is adding to the jitters that telecomms investors are already displaying. This week saw mobile network operators Vodaphone slip from top spot amongst quoted British companies on the FTSE.
Not that any of this stopped anyone from partying - which made sound business sense, with the alternative being to try covering almost 300 stands.
Party highlights included the surreal sight of Suzanne Vega playing on an absurdly packed yacht to a throng of seasick revellers, and IBM raffling off a diamond to visitors to their gin palace. If market sentiment continues to cast a pall over the mobile sector, next year they might be raffling cubic zirconia. In Blackpool.
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Paul Lavack is online staff writer at business2.co.uk |
