First 3G Networks Won't Be Fancy

Nokia and Sonera as expected have further deflated the hype about third generation (3G) mobile telephony, but the companies remain convinced that business customers in particular will be interested enough to subscribe and buy new handsets.

The forthcoming high-speed mobile telephony networks won't offer any new futuristic services the industry promoted in the late 1990s. Instead, 3G or Universal Mobile Telecommunications System (UMTS) networks will improve services already available to users today because of the added bandwidth that will be available, Nokia and Sonera said.

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Nokia officially announced its 6650 phone for 3G networks and Sonera unveiled what it calls its first 3G services. In line with the overall message, these services will be offered on Sonera's 2G and 2.5G networks first. Users will be able to benefit from the added 3G network speed in parts of Finland sometime next year, if they buy a 3G handset.

"When you move to 3G the services will be richer," said Harri Koponen, Sonera's president and chief executive officer at the news conference. Nokia's Vanjoki added that the benefits of 3G are "additional speed, quality of service and multitasking."

Among those services is Multimedia Messaging Service (MMS), which has been available for some time. Operators are already promoting it on their General Packet Radio Service (GPRS), or 2.5G networks. GPRS adds the capability to send and receive packet-switched data to second-generation Global System for Mobile Communications (GSM) networks.

"Multimedia messaging is a 3G service," said Anssi Vanjoki, executive vice president of Nokia Mobile Phones, at a news conference with Sonera in Finland. Sonera, often recognized as one of the most innovative phone companies in the world, is the incumbent carrier in Finland. Both have been big boosters of 3G networks.

The new Nokia 6650 is a pocket-sized phone weighing 5 ounces with a color display and built-in camera. It supports GSM, GPRS, and 3G networks. Nokia expects it to cost anywhere between $244 and, depending on the market and operator subsidies, when it hits the streets probably during the first half of next year, Vanjoki said.

Vanjoki expects "busy business people" to be the first to buy the 6650 because it is possible to be connected to the Internet on a laptop and talk on the phone at the same time. "There are going to be takers for this device," he said.

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Ben Wood, a senior analyst with Dataquest, a unit of Gartner, said the announcements went as expected.

"There are no surprises. They launched a phone that looks like a phone and the expected redefinition of 3G has come to fruition. 3G is not a new network that stands on its own, it is intrinsically linked to 2G and 2.5G," he said.

"It was very easy to get got in the hype and euphoria in the late 90s. The reality is when people talk about holy grails and killer applications, they just don't exist. There is only one for mobile phones and that is just voice," said Wood.

The launch of commercial 3G services in Europe has repeatedly been delayed due to both technical issues and cash-strapped operators curbing investment. Sonera's Koponen said he expects 2004 and 2005 to be "the mass market years for UMTS."

Hutchison 3G will next week start issuing several hundred handsets to what it calls "friends of the company, but not people with the company" in the U.K., marking the first use of its 3G network beyond the trial stage. The company hopes to have about 100,000 paying customers on its networks in the U.K. and Italy by the end of the year, said Matt Peacock, a Hutchison 3G spokesperson.