SemiOT: DoCoMo's 3G Delay Is Bad News For Telecom
By Richard Baum, Reuters
Apr 24, 2001 (9:31 AM)
URL: techweb.com
A delay in the launch of the world's first 3G mobile phone service darkened the clouds over Europe's telecom companies Tuesday, putting fresh pressure on some of the sector's shares. News that Japan's NTT DoCoMo would postpone the start of its 3G network by four months added to the recent run of bad news for an industry that is slashing jobs and struggling to cope with huge debts taken on to buy 3G licenses.
Mobile operators and manufacturers said DoCoMo's decision to delay its 3G launch from May 30 to Oct. 1 had no implications for Europe, where most networks will launch the technology next year.
But analysts said it was another sign that the industry was falling victim to its own hype over the prospects for the mobile Internet, which has so far failed to enthuse consumers or convince investors that it is a smart bet.
“The industry has made a rod for its own back by creating these expectations,” said Simon Buckingham of mobile industry analysts Mobile Lifestreams. “The marketing's got ahead of the technology.”
European operators were standing by their proposed launch dates, which include a British Telecommuncations service for 200 people on the Isle of Man from the end of May and possibly some services in Spain by September.
Any delays would be serious for European operators because they have invested more than 100 billion euros ($90.01 billion) in 3G licenses.
Some European telecom stocks fell on the news, against the trend of the wider market, but the impact was limited because many people had thought DoCoMo's timetable looked ambitious.
Vodafone Group PLC fell 1.2 percent. A spokesman for the world's largest mobile operator said it still planned to launch in the second half of 2002.
Nokia (stock: NOK), the world's largest mobile phone maker, dropped 1 percent, despite a spokesman saying DoCoMo's decision would not affect the global launch of 3G.
Kurt Hellstrom, chief executive of Ericsson (stock: ERICY), the world's largest 3G network equipment maker, also dismissed the impact of the DoCoMo delay.
“It doesn't mean very much in terms of sales and orders. It is an introduction of a new technology and it is good to test it well before it is launched,” Hellstrom told Reuters.
DoCoMo's partners in Europe said the delay would not impact their 3G launches. Hutchison 3G, owned 20 percent by DoCoMo, said it was still planning to start 3G in the U.K. in mid-2002. KPN Mobile, in which DoCoMo has a 15 percent stake, said it was sticking to its second half of 2002 launch window.
Still, Nokia said it does not expect operators to make full-scale launches before early 2003. It plans to start selling its 3G handsets from the third quarter of next year.
The delay was welcomed by one group. Mark Briers, head of 3G for BT's Isle of Man unit Manx Telecom, said it was a fantastic boost to his team's ambition to launch the world's first 3G service next month.
“It's tight, but it's looking like we could achieve it,” he said. |
