While H3G seems to be the best-placed new entrant 3G mobile operators in Europe, it’s hardly in an enviable position. H3G plans a limited roll-out this year, but its handsets will not switch properly between 2G and 3G networks. Given consumer antipathy towards new mobile technologies that don’t work, H3G might be best advised to delay its launch.
Hutchison 3G has announced details of its UK and Italian mobile services.
Mobile operator Hutchison 3G has announced details of its UK and Italian services. H3G will begin commercial trials of its service with 10,000 UK customers in October, making it the first 3G operator to launch in a major European market.
If it achieves a 2002 launch, Hutchison will have done better than many in the industry expected. The key fears have surrounded dual-mode handsets, which allow users to make calls over a 2G network if there is no 3G network available.
These devices will be essential for early 3G services, because geographical coverage will be limited – Hutchison expects to switch on 3,500 UK base stations this year, compared to an eventual total of 6,000. But manufacturers have fallen behind in producing dual-mode handsets.
Hutchison says that its dual-mode phones, made by NEC and Motorola, work well enough to launch services. However, it admits that ‘handover’ between 2G and 3G networks does not work properly. Users will have to put up with dropped calls when they move between areas, potentially until mid-2003.
A new entrant 3G mobile operator is not an enviable thing to be – as highlighted by last week’s closure of Germany’s Quam. Attracting customers will be hard for Hutchison, particularly as the UK and Italian markets are both saturated.
The company’s first-mover advantage in 3G should help it win some customers, and its senior management also has the experience of building new entrant UK operator Orange into one of Europe’s largest players (although Orange launched in much friendlier conditions).
But although it’s better placed than other new entrants, the challenge that H3G faces is enormous – and if the WAP debacle has taught anything, it’s that consumers are not pleased by over-hyped technology that doesn’t function properly. Maybe H3G should consider delaying launch until its handsets work.
Related research: Datamonitor, Global Mobile Devices (DMTC0777)
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