Full text - Nokia Exec Sees Little Need for Much-Touted 3G
Mon Sep 23,11:59 AM ET
By Paul de Bendern
[Thanks to Data on RB]
ESPOO, Finland (Reuters) - On the eve of the launch of its long-awaited mobile of the future, a top Nokia ( news - web sites) official on Monday toned down hopes for a cellphone revolution and said consumers would probably be happy with current technology.
Telecoms operators do not yet need next generation or 3G networks to be able to offer services such as high-quality picture, sound and text messaging but can use current GSM-based networks, Nokia Mobile Phones Executive Vice President Anssi Vanjoki told Reuters.
Vanjoki, who runs key mobile phone product business units for the world's biggest cellphone maker, said the ongoing rollout of so-called multimedia messaging services (MMS) in Europe were the same as the 3G services much-touted by operators.
"People are really starting to realize that MMS is 3G. From consumers' perspective this is 3G. We can have whatever G's but if a consumer doesn't see a difference he doesn't care which number is before the G," he said in an interview.
Vanjoki said telecoms operators in Europe realized they did not yet need to build data services around new costly 3G or WCDMA ( news - web sites) radio spectrum networks but could use current ones.
"With WCDMA radio you get... capacity and that is not needed immediately, of course, because we have ample capacity and lots of possibility to increase existing capacity in existing networks for GPRS," Vanjoki said at company headquarters in Espoo, near the capital Helsinki.
STICK WITH WHAT YOU'VE GOT
Vanjoki's remarks comes just days ahead of the unveiling of Nokia's first 3G phone with a built-in camera on Thursday, about which Nokia said in early 2002 that it would sell in the millions in the fourth quarter. Nokia recently said the model will not be a mass-market million-seller before well into 2003.
The delay follows a much slower build-out of third generation networks than previously expected, as cash-strapped telecoms operators delay the construction work and instead milk their already existing networks by bringing on new services. If fully utilized, 3G networks are cheaper to operate because they use the radio spectrum much more efficiently.
However, the radio spectrum sold for 3G mobile communications creates fresh capacity while current second generation spectrum is not fully used by mobile carriers.
Meanwhile, demand for mobile data services such as messaging and email which could accelerate the need for 3G networks, is growing slower than anticipated and services for business people have not materialized yet.
Vanjoki said despite the higher speeds of the 3G networks: "the services will be pretty much the same with 3G."
Analysts agreed. "It is quite clear consumers don't need 3G. They should be happy with MMS," said Stuart Jeffrey, an analyst at Lehman Brothers, which has an "equal weight" rating on Nokia.
Vanjoki said operators would eventually need third generation networks for high-quality video downloads and the downloading of vast amount of data and when current networks reached full capacity.
Still, telecoms operators could have invested earlier and more in more efficient 3G networks if European governments had not charged some 100 billion euros for 3G radio spectrum licenses. Many carriers are now in deep financial difficulties.
PICTURE MESSAGING TAKEOFF AT RISK
Instead, operators have started offering MMS services that run on second generation networks. Vanjoki said demand was outstripping supply for the 7650, Nokia's first color screen phone with a built-in digital camera.
Vanjoki's remarks may have been an attempt to lower expectations for those consumers who might wait six more months for Nokia's new 3G handset rather than buy a MMS phone now. Nokia is unveiling the 3G model now largely to fulfil a promise made early in 2002 to show a working 3G phone in the third quarter. Vanjoki's comments could benefit the 7650, plus a range of MMS models out soon.
The industry needs MMS to succeed if it is to recover after slumping in 2001. The replacement market for phones, particularly those offering color screens with MMS capabilities, are seen key to ensuring industry growth.
But Vanjoki warned that operators were hobbled because consumers currently can only send photo messages to other users with MMS phones on the same network. Billing also needed to function better.
"I think we will have a pretty good situation by the end of the year and if it is not there by the end of the first quarter the industry will get into trouble," he said.
Lehman Brothers' Jeffrey also said MMS between competing networks needed to be sorted out before Christmas.
(Additional reporting by Lucas van Grinsven in Amsterdam)
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"People are really starting to realize that MMS is 3G.
<ggg>
And for Sonera, GPRS is "3G".
Will NOK anoint all GSM as 3G?
"Nokia is unveiling the 3G model now largely to fulfil a promise made early in 2002 to show a working 3G phone in the third quarter."
Working? On partner operators' (plural) networks?
Like Sonera - home of "3G" GPRS?
"This is a real working, dual-mode 3G handset. That's the last you will see of it until 26 September at 12 o'clock when we will launch it with our partner (telecom) operators," Vanjoki said."
<ROTFLMAO>
"STICK WITH WHAT YOU'VE GOT"
Has Nokia given up on payment for wCDMA infrastructure in the field? |
