Businesses say they won't pay for 3G

More bad news for 3G investors as business turns its back on the technology

European businesses may be excited about m-commerce but they are not prepared to pay extra for 3G, according to research firm GartnerGroup.

A survey published today reveals that less than a quarter of businesses across Gartner's European customer base are prepared to pay an increase for 3G rates, adding yet more gloom to the climate currently surrounding the mobile industry.

"This is bad news for European 3G mobile operators who have paid high premiums for licences," said Nick Jones, GartnerGroup analyst. "While European chief information officers would like the high data rates promised by 3G systems they are not willing to pay extra for them."

Sixty-six percent of businesses surveyed believe that mobile business applications would improve customer satisfaction, bring cost savings (60 percent) and new business opportunities (57 percent). But they remain unconvinced that these benefits justify the investment needed to upgrade to 3G.

The negatives appear to outweigh the positives, according to Gartner. Seventy-six percent of businesses are still worried about mobile security, 52 percent are concerned about the support costs of mobile devices and nearly 40 percent think that mobile phone bills are still too high.

The lack of faith in 3G mirrors the current investment slump across the telecoms and technology sector. The desire to take risks on new technology has diminished and many are questioning whether 3G is suffering from the same over-hype which beset WAP services. The UK 3G auction raised £22.5bn for government coffers but left experts questioning whether the mobile operators would have any money left to build infrastructure and roll out actual services.

The Nordic nations are often seen as a touchstone for wireless and the failure of GPRS to take off in Sweden will do nothing to increase optimism for 3G. However, those that have invested in the licences remain confident that there will be a huge market for such services, despite the fact that the idea of Web surfing via mobiles has yet to be a proven hit among consumers.

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