INTERVIEW-CeBIT-Nokia sees 3G mass-market early 2003
By Paul de Bendern
HANOVER, Germany, March 22 (Reuters) - Europe's delayed new-generation cellphone networks, that will enable consumers to browse the Web on the move, will be fully up and running by early 2003, telecoms equipment maker Nokia <NOK1V.HE> said.
Nokia shrugged off fears in the troubled industry that high-speed third-generation (3G) services, also known as UMTS -- which are costing operators billions of euros to install -- will be delayed any further before hitting the mass market.
"It's on track," J.T. Bergqvist, senior vice president of Nokia's networks division told Reuters in an interview at Germany's CeBIT technology fair.
"We don't have a specific worry about (3G timetable)...but every new market takes time to take off."
Many European telecoms operators are blaming equipment makers for delays in planned launches of the much-awaited, high- speed networks and wait for groups like L.M. Ericsson <LMEb.ST>, the world's largest mobile network equipment seller, and Nokia to install the systems and make phones that work on these networks. So far, only Japan's biggest company cellphone giant NTT DoCoMo <9437.T>, is expected to launch 3G on time, with a limited introduction at the end of May of both networks and handsets.
Bergqvist expects trials of third generation networks in Europe to take place in the first half of next year but added that no full volume launch was expected before early 2003.
So Nokia, the world's largest mobile phone handset maker, expects to start selling its 3G handsets from the third quarter of next year. Ever bullish, it also plans to leapfrog its Swedish arch-rival Ericsson to become the world's biggest 3G network seller, with a 35 percent global market share.
Having spent around 120 billion euros ($107 billion) to date on third generation UMTS (Universal Mobile Telecommunications Systems) licences in Europe, telecoms operators are under mounting pressure from investors to prove they can make returns from new services such as high speed mobile Internet and video.
The success of UMTS hinges, in part, on GPRS (General Packet Radio Servies).
GPRS TO HIT MASS-MARKET EARLY 2002
With two years to go before full UMTS service launch, Nokia is banking on selling transitional, so-called 2.5 generation network upgrade technologies such as GPRS.
Handsets working over GPRS networks, which are being rolled out across Europe and which network operators hope will kick-start potentially lucrative mobile data traffic ahead of UMTS, will be a delivered in volume by early next year.
Nokia was the last of the major mobile phone makers to unveil a new breed of savvy GPRS mobile phones at CeBIT -- Europe's biggest technology fair in Hanover -- with handsets offering customers higher-speed, "always-on" Internet access.
Bergqvist said Nokia was now the world's largest seller of GPRS networks, with close to 60 installed globally.
Heavily indebted telecoms operators are counting on GPRS -- which has already been delayed in some countries -- to bring them much-needed revenues ahead of UMTS.
Bergqvist dismissed suggestions that a successful GPRS service would delay the launch of the even faster UMTS mobile systems, saying: "If GPRS is a success, 3G will also be a success."
Nokia also backs attempts by some telecoms operators, whose shares have lost around 60 percent of their value since last March to try and win regulatory backing to share heavy third-generation network roll-out costs by teaming up in Europe.
"If it helps the operators to start (UMTS) then definitely it's good for the whole industry," he said. "We don't want to build our business on sand. If six operators in a country (like Germany) cannot each build networks of their own, then it's much sounder to have four with a couple of them shared.
Bergqvist acknowledged the volatility of a market, which has seen a string of profit warnings as concerns mount that an economic slowdown in the U.S. and Japan will spill over into Europe, but insisted Nokia's networks business was not as exposed as some of its rivals because of its concentration on some markets and technologies.
Nokia, which gets about 30 percent of group sales from networks and most of the rest from handsets, did not last week cut its sales growth forecast of over 30 percent growth for its networks unit for the first quarter -- unlike rival Ericsson. Nokia did lower its handset sales growth target for Q1.
($1=1.119 Euro)
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