To: samim anbarcioglu who wrote (11586 ) 5/16/2001 8:40:00 AM From: JohnG Read Replies (3) | Respond to of 34857 Euro Brit Telecom concedes that Euro 3G is some kind of loss leader. BT conceded that: "3G technology is not yet fully developed, and this process may take longer than anticipated. The result may not prove superior to existing technologies." """James Pierce, VP developer relations Argogroup, a wireless technology development firm, said: "This is certainly a surprising message to send out to your shareholders! WAP and GPRS were allowed to be loss leaders, to drive interest and application development for the real revenue generator, 3G. To now say that there may be no profits there either seems to make little commercial sense. It may be that they are simply being careful of overpitching, but notes of investor caution are usually more subtle than this.""" BT warns: 3G billions may have been wasted Tuesday 15th May 2001 4:00pm BT has pledged to spend a further £10bn on 3G over the next five years, but has said it doubts demand for next generation mobile services will justify the associated development costs. In a prospectus to shareholders released today, the embattled company strikes a melancholy note, stating: "BT cannot give shareholders any assurance that it will make an economic return from its 3G investments." According to the prospectus, BT has already invested around £10bn in 3G licences in 2001, mainly in Germany and the UK. This will no doubt confirm some analysts' worst fears, as many pundits have been openly skeptical of the possibility of recovering such huge investments. Although operators have been offsetting some of the rollout and hardware costs by partnering with network manufacturers such as Ericsson, Nortel and Siemens, it appears that this measure has not been sufficient. BT conceded that: "3G technology is not yet fully developed, and this process may take longer than anticipated. The result may not prove superior to existing technologies." James Pierce, VP developer relations Argogroup, a wireless technology development firm, said: "This is certainly a surprising message to send out to your shareholders! WAP and GPRS were allowed to be loss leaders, to drive interest and application development for the real revenue generator, 3G. To now say that there may be no profits there either seems to make little commercial sense. It may be that they are simply being careful of overpitching, but notes of investor caution are usually more subtle than this." BT said it has undertaken to provide a 3G network, "giving certain levels of coverage" across Germany, the Netherlands and the UK. However, it claims that more stringent planning controls over mast sitings in rural areas, such as Kent in the UK, could hinder rollout still further. BT expects capital expenditure on plant, equipment and property to be around £4.9bn in 2002, of which £1.5bn will be incurred by BT Wireless - the 3G operating arm of BT. The company has recently been under fire for allowing CEO Sir Peter Bonfield to receive a £2.9m bonus this year, in spite of him presiding over one of the company's most disastrous years since privatisation. ---------- silicon.com .