News Burst: More 3G woe, says research

Was spending so much money on those licences very wise after all?

Mobile phone network operators will fail to generate sufficient revenue from third-generation (3G) networks and face a steep decline in earnings by 2005 according to research released Friday.

Forrester Research believes increased competition will cause a rapid decline in earnings from voice, SMS and data connection services, which currently drive operator revenue.

Mobile operators have justified the amounts spend on acquiring 3G licences -- over £22bn in the UK alone -- by claiming that they will generate large sums of money from new services such as video conferencing and location-based services. However, this report suggests revenues will be below expectations.

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