Crunch time for 3G

As Vodafone finally joins 3 in providing third-generation mobile services, the question of whether the billions paid for the technology will ever be recouped comes a step closer to being answered
Written by Graeme Wearden, Contributor

The launch of Vodafone's first 3G services on Wednesday comes at a crunch time for the mobile industry. After spending over £22bn in the 3G auction of 2000, the five licence winners are under massive pressure to deliver successful services and make their money back.

Vodafone hopes that downloadable music, TV clips, video calls and 3D games will prove popular with consumers. It appears to be taking a slightly more elevated approach than 3, which launched its own 3G video phones earlier this year. 3 started advertising its service with TV adverts that included a user making a video call from her bath.

Like O2, Orange and T-Mobile, Vodafone also offers a high-speed data card for mobile workers -- which it claims is selling well.

But there is still a huge question mark hanging over the 3G industry. Is there really enough demand for video phones? Can a single killer application be found, or will users be happy with a cocktail of less-compelling features?

And with Wi-Fi proving very popular, and WiMax poised to make even faster wireless services available, 3G operators need some big successes quickly.

Winning lots of enterprise customers would be a great way of making money from 3G. But Nokia revealed only last week that it is seeing little demand for 3G devices from the enterprise sector -- hardly a ringing endorsement of 3G's assets.

Vodafone boss Arun Sarin has set his company a target of winning 10 million 3G phone users by March 2006. The clock is ticking.

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