Video on your mobile phone? Forget it, says Vodafone chief

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The prospect of being able to watch videos on mobile phone screens retreated into the distance yesterday after the disclosure that Britain's biggest network operator is struggling to develop the technology.

In the latest blow to hopes that British cellphone users will soon be able to exploit the "third generation" ­ or "3G" ­ technology, Vodafone's chief executive, Chris Gent, has reportedly outlined the company's problems to City analysts. The future of 3G systems is crucial to the five mobile phone companies, including Vodafone, which paid the Government £70bn last year for the right to exploit the new advances.

Although Vodafone insisted yesterday that its development of 3G technology was proceeding as planned, the City briefing has nevertheless focused attention on the difficulties companies face in attempting to bring ever more exciting applications to cellphones.

Earlier this week, a conference in Stockholm heard that, to carry 3G technology, the phones might have to be "the size of bricks" ­ a throwback to the 1980s. Experts said that might be the only way to get all the information, screens and battery power 3G handsets will need to provide the services that have been hyped over the past two years.

There was more bad news on Thursday when a survey by the AT Kearney/Cambridge Business School showed only 4 per cent of people planned to use their mobile phones for shopping on the internet ­ down from 12 per cent six months ago. Making online shopping popular is crucial for companies such as Vodafone ­ which would take a cut from each transaction ­ to recoup their investment in 3G licences.

Vodafone told analysts the technology remained expensive and too slow to let users receive music or video clips, and that it would set up its 3G network to provide guaranteed data speeds of just 64,000 bits of data per second (64kbps) ­ only slightly more than present home link-ups, which offer 56kbps. At that speed, replaying videos would not be viable.

Declan Lonergan, head of European mobile phone research at the Yankee Group consultancy, said: "This is just one more piece of news that reaffirms our view that 3G was never going to be about things like video. Speeds are coming down and down and down and it's getting less and less exciting from a consumer point of view. It's going to be much more difficult for the operators to show what's different about 3G services and why the average consumer should upgrade from a GPRS [General Packet Radio Service] phone."

GPRS is an interim technology to connect mobile phones to the internet, offering speeds of up to 30kbps. Though those phones went on sale over the summer, there has been little enthusiasm for them. The most popular are the older GSM phones with SMS ­ text messages ­ which have been a big success: a billion messages are sent in Britain every month.

The problem for 3G operators is that users ­ especially the young who supply the big profits ­ like the small handsets made by companies such as Nokia and Samsung. There is little evidence they want video or shopping on them.

Angela Dean, a telecoms analyst for Morgan Stanley bank, said: "The risk is that you will have a 3G phone that looks like a brick, and nobody wants a bigger phone unless you can do something with it that you cannot do with GPRS."

Upwardly mobile

1947 A cellular phone system is conceived by DH Ring of New York's Bell Labs. A waiting list of 20,000 budding mobile owners soon develops, but the technology is not ready for several decades.

1960s Race begins to incorporate the technology into usable devices. Mobile users still have to call the operator to be connected to another number.

1973 Dr Martin Cooper of Motorola is hailed as the father of the cellphone after logging a patent for the first hand-held phone, although it is the size of a lunch box. A rival version comes with its own briefcase.

1976 Bell puts the first mobile phones in shops in New York.

1978 Bahrain is the first country to develop a mobile phone network allowing national calls.

1987 Nokia produces the blueprint for modern mobile phones with the first device that can be carried comfortably in one hand.

1993 First text message created by engineering student Riku Pihkonen.

1996 First pay-as-you-go mobile phone offered by Vodafone.

1999 Orange introduces WAP phone enabling users to log on to the internet.

2001 Ericsson launches facility to allow use of video clips and photographs.