Vodafone chief attacks handset makers for poor quality 3G phones

Arun Sarin, the chief executive of Vodafone, yesterday fired a warning shot across the bows of mobile phone manufacturers, warning that the quality of 3G handsets was still far below what was required for a commercial launch.

He said the phones being developed for 3G services had inadequate battery life, were prone to overheating and were too bulky.

Mr Sarin said he disputed the idea that 3G phones were available now, and said Vodafone was closely monitoring the progress handset manufacturers were making in developing new phones in time for Christmas, when Vodafone plans to launch a fully commercial 3G service.

"The handsets being produced are bulky, they get hot and they don't have the battery life," he said. "They are not a positive experience for customers. We are still waiting for handsets. Some things never change. We are very excited about the future but we can't turn the future on before we have the handsets."

Mr Sarin's attack on the handset manufacturers reflects a growing frustration among mobile phone operators who want to exploit the huge sums they have invested in 3G licences with successful product ranges. The operator 3, owned by Hutchison Whampoa, launched a 3G service last year which has suffered from well-publicised teething problems, while rival operators have delayed their launches.

Mr Sarin confirmed that Nokia would supply Vodafone with 3G handsets, ending months of uncertainty. However, he stressed that Nokia would be only one of many big name suppliers. He said the Finnish company had agreed to place Vodafone's own client software in its handsets, and that the two were still in talks about Nokia developing Vodafone-branded phones for the 3G launch.

Nokia is seen to be falling behind certain Far East manufacturers such as Samsung in the race to supply 3G phones.

Mr Sarin was speaking at the 3GSM mobile phone conference in Cannes yesterday. As well as commenting on handset manufacturers, he also claimed that Vodafone's recent failure to capture AT&T Wireless in the US, which has been bought by Cingular, had not damaged Vodafone's reputation in the eyes of shareholders.

"We went to the auction, we were outbid. The band played on and Cingular paid $15 a share. Cingular can have AT&T Wireless at $15 a share,'' he said.

Mr Sarin promised that Vodafone would push ahead with Verizon Wireless, its mobile joint venture with Verizon Communications, but could not rule out a stock market flotation of the venture in the future.

"I'm not saying it's out of the question completely. There are many variables on the table," he said. Vodafone would be entering talks with Verizon Communications soon to hammer out issues such as the future of the joint venture's dividend payment to Vodafone and how the business was organised. He said Vodafone was not looking to buy out the whole of Verizon Communications at the moment because the cost of buying its fixed-line business just to get the mobile assets made it unrealistic in the near- to mid-term.