Investment fears spread gloom over 3G

Industry gloom over European third-generation (3G) investments is deepening as operators curb spending because of fears that investments will exceed revenues.

GSM Europe, the European interest group of the GSM Association, which represents more than 500 2G and 3G network operators globally, has warned MEPs that investment will dry up unless they loosen regulatory knots.

In a statement, GSM Europe spelled out the warning. "The key word is forbearance. Regulators should only intervene where really necessary. This is the message to MEPs as they discuss the proposed Directives that make up the new regulatory package.

"Europe's place in tomorrow's wireless world is at stake: any regulation that is unnecessary or heavy-handed will discourage investment."

Tony Lavender, principal consultant at analyst Ovum, said: "This is a warning shot from GSM Europe. Regulators and the European Union must get the balance right. The investment equation for the mobile industry has changed."

Adding to 3G anxieties, mobile chip developer Parthus warned that overheating handsets and short battery life could slow take-up and damage the credibility of the technology, while Vodafone and Telecom Italia Mobile have warned that GPRS phones will not sell in volume until 2002, a year later than expected.

Meanwhile, France's UMTS licence contest has descended into chaos after two bidders withdrew from the beauty contest citing unrealistic fees. This leaves only three contenders for four French licences.

See also:

3G: Beyond the hype

The third-generation (3G) licence frenzy has left mobile operators with empty pockets and a head full of hype, wondering whether they can find a killer app to justify the billions spent on the licences.  01 May 2001

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