E-commerce minister upbeat on 3G's chances

The future of mobile services is bright and increasingly wireless, according to Stephen Timms, who is confident of future success for both third-generation mobile networks and Wi-Fi

A growing public appetite for innovative mobile services and fast connectivity on the move is set to drive the take-up of third-generation (3G) phones, e-commerce minister Stephen Timms argued on Thursday.

Speaking at the Wi-Fi and 3G summit in London, Timms predicted that the surge in demand for 3G would equal that of GSM, which has seen phenomenal take-up since the late 1980s, when mobile phones were an expensive business tool.

"In a couple of years, people will expect the kind of download speeds and services that only 3G can provide," Timms told an audience of industry and government players. Interactive and location-based services are likely to be key, he said.

Telcos have faced a rocky road so far with 3G, hit by expensive licence fees and uncertain consumer demand. Some pundits have said the technology, which enables services such as video calling, will be rendered obsolete by the ubiquity of Wi-Fi access points, or hot spots. Wi-Fi allows mobile devices to connect to the Internet.

Hutchison 3G is the only mobile operator currently operating a full commercial 3G service in the UK. The other four licence-holders -- Vodafone, O2, Orange and T-Mobile -- are rolling out network infrastructure but haven't yet launched their own 3G products. They are generally expected to take the plunge next year, although O2 in particular has made it clear that it isn't in any rush.

One factor said to be deterring operators is a shortage of handsets. Timms, though, is confident that such problems are litle more than teething troubles of the sort that the GSM market successfully coped with.

He told the audience that a GSM engineer had once explained to him that any new technology that didn't suffer problems just wasn't complicated enough.

Timms also said he was encouraged by the number of Wi-Fi hot spots springing up around the UK, singling out The Cloud, which is estimated to be rolling out around 150 hot spots each week. Timms said this gave credibility to analyst forecasts that Europe will overtake the US as the leading Wi-Fi territory by 2007.

"The future is bright, but it will increasingly be wireless," predicted the e-commerce minister.