Friday, 7 September, 2001, 11:02 GMT 12:02 UK
Vodafone fails
3G test
Multimedia 3G phones could be
disappointing
Vodafone has admitted that its
third-generation (3G) mobile
phone networks will not be fast
enough initially to offer full
multimedia services.
This means that transmitting live
music and video clips is likely to
remain slow and expensive while
the technology will fall below the
internationally-accepted standard
definition for 3G mobile services,
analysts said.
Vodafone has spent about £13bn
acquiring 10 European 3G licences.
On Friday, investors continued to
mark down the shares, which lost
2.5% to 134p in late morning
trading, having already lost 3.7%
the previous day.
Debt repayment fears
Vodafone and other phone firms
have built up massive debts
buying 3G licences, spending a
total of about £70bn on European
licences over the past few years.
And some analysts fear that
Vodafone's warning could send
telecoms shares tumbling further.
Stocks in the sector have fallen
steeply in recent months because
of investor concerns about the
telecoms companies' ability to
generate profit from 3G services
and repay those debts.
For many investors, the news that
3G will not live up to expectations
has long been the nightmare
scenario.
Vodafone said its service would
run at a minimum of 64,000 bits
per second, which will allow it to
offer improvements in text
messaging and text-based internet
information, but is insufficient for
good quality pictures and sound
files.
But it said "most coverage areas"
would be capable of 384,000 bits
per second.
Anger in the City
Existing WAP-based mobiles offer
text messaging and text-based
internet, but most analysts
consider these services have
disappointed consumers.
Vodafone is also attracting
criticism in the City of London for
releasing the news to telecoms
analysts, without making an
official stock market
announcement.
The warning follows an earlier one
in June, when Vodafone said the
launch of its 3G phone services
could be delayed into 2003, rather
than taking place in 2002 as
originally scheduled.
Japan delay
Problems with 3G start-up are not
limited to Vodafone.
Japan's NTT DoCoMo - which has
led the race to introduce the new
services - has itself had to delay
commercial roll-out by three
months to October.
And British Telecom, which is
piloting a project in the Isle of
Man, has also faced hold-ups.
Delays announced so far have
mainly been because of
technological or software hitches.
But analysts say problems are
likely to continue, with slow supply
of handsets from manufacturers
becoming the main cause of
delays. |
