O2 expects little 3G interest this year

The mobile operator will begin selling high-speed data cards and handsets in the second half of this year, but is not exactly bracing itself for a stampede of customers

UK mobile operator O2 will offer third-generation handsets and laptop data cards to UK customers this autumn, but doesn't expect to see significant demand for its 3G service until 2005.

MmO2, O2's parent company, said on Tuesday that it is still on track to launch commercial 3G services in Britain this year, probably in the autumn.

This is likely to make it the fourth operator to do so -- behind 3 and Vodafone, who are already signing up customers, and T-Mobile, which is expected to launch its 3G offering this summer.

But mmO2 denies that it is losing ground to Vodafone in the race to attract mobile workers and consumers with high-speed wireless services.

"We're very comfortable with our strategy. We're not going to push the technology onto our customers or use them as guinea pigs," said an mmO2 spokesman, who described his firm's approach to 3G as "cautious" and "pragmatic".

"It's very important that the customer experience is right. In this case, that means launching in the autumn," he added.

MmO2 has already launched a 3G data card for laptop users in Germany, where licence conditions meant it had to build its network quicker than in the UK.

Vodafone began selling a third-generation mobile data card in the UK last month, but hasn't set a date for the launch of 3G handsets. MmO2 expects to begin selling both laptop cards and phones in the autumn, but doesn't anticipate that many customers will be queuing overnight to get their hands on one. "We'll offer a mix of both [data cards and handsets], but we don't expect to see mass-market interest before 2005," the mmO2 spokesman added.

MmO2 is keeping quiet about how much of the UK population will be covered by its 3G network by the time it launches. Like Vodafone, it is focusing on areas where there is sizable use of existing data services like GPRS, which suggests it will cover major towns and cities.

MmO2 announces its preliminary financial results for the 12 months to 31 March on Tuesday. For the first time ever, it has made a full-year pre-tax profit -- of £95m, compared to a loss of £10bn for the same period a year ago. This huge loss was partly caused by mmO2's decision to admit that its 3G licences were worth much less than it paid for them.