Expert predicts 3G collapse

It is looking less and less likely that wireless providers' expensive 3G gambit will pay off -- and there could be dire consequences

Leading figures in the telecoms industry are casting fresh doubts on the future of next-generation wireless technologies, with disparaging comments from British Telecommunications' former chief technologist Professor Peter Cochrane and BT (quote: BT) itself admitting the outlook for 3G profits is gloomy.

Cochrane will claim on a television programme to be aired this week that European telcos made a mistake in betting their futures on 3G, the wireless technology expected to turn mobile phones into multimedia terminals. BT, Vodafone, Deutsche Telekom and other major telecoms companies have all spent billions of pounds on licenses for 3G technology in the past year, while rollout of the interim 2.5G technology has remained limited.

The bet is unlikely to pay off, according to Cochrane. "To make 3G pay, everybody's got to have one and be very avid users indeed," he told BBC2's The Money Programme, to be aired on Wednesday evening. "I don't see that happening."

He predicts some telcos will collapse under the strain of their debts. BT has been particularly slated by investors for its inability to reduce its £30bn debt load.

BT admitted on Friday that the advent of 3G is unlikely to increase consumer spending.

Chris North, chief operating officer of BT Japan, said he did not expect a dramatic increase in average revenue per user (ARPU) after 3G services start in the country in May.

His comments follow a warning by Japan's number two wireless company, DDI, on Thursday that 3G would not increase customer spending and that some European operators could go bust as a result.

Reuters contributed to this report.

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