Public must wait for new mobiles
Jamie Doward, deputy business editor
Sunday April 22, 2001
The Observer
Serious technical problems are forcing the UK mobile phone networks to delay - for up to a year - the commercial launch of the crucial next generation wireless internet service.
The companies originally wanted to launch General Packet Radio Services (GPRS), which allows users to swap emails and video clips, in the second quarter of this year as a stepping stone to the so-called '3G' high speed wireless internet technology. The industry hopes it will be a major source of revenue. But a series of glitches mean it is unlikely to become widely available until next year.
The phone handset manufacturers are having problems making sure that the new devices work on the British operators' networks. This has forced the mobile companies to extend their test periods and postpone the launches.
John Fletcher, senior consultant with the telecoms consultancy Analysys, said: 'The handset manufacturers have been using their own networks to test the stuff, not their clients' networks.'
A report by banker Credit Suisse First Boston says: 'At least initially, operators will be constrained in the handsets they can offer customers, and they may have to spend a lot of time ironing out wrinkles in the network before being ready to be launched on the mass market.
'This compatibility issue threatens to delay the widespread launch of GPRS.'
GSM, the current technology, suffered launch delays. But the problems of GPRS appear more fundamental,' said Dougal Scott of Spectrum Consulting.
Orange now plans to delay the new system to the third quarter of this year.
A spokesman for One2One, once the most vociferous advocate of GPRS, said: 'We don't want to be specific about a launch date.
'Currently there are technical issues that have to be resolved. That's why we're having the trials.' BT Cellnet, meanwhile, was embarrassed last week when a high-profile presentation of the new technology suffered a very public series of glitches.
The largest mobile network, Vodafone, which has already launched a corporate GPRS service, claims it will launch the system for mass market customers by mid-summer.
The cautious start for GPRS means that the revenue streams sought from it are unlikely to have any impact on the companies' accounts until next year at the earliest.
The CSFB document concluded: 'We do not expect GPRS to sell a sufficient size to make an impact on cashflow and earnings figures for 2001. This suggests to us that GPRS will not lift stock [prices] this year.'
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