Vodafone set to abandon another 3G launch

Liz Vaughan-Adams
Friday 06 December 2013 03:37

The mobile phone operator Vodafone yesterday joined the growing list of mobile companies adopting a more cautious view of third-generation (3G) services by postponing paying for its 3G licence in Ireland.

The company, which was awarded the licence in June, exercised its right to delay paying the first €44.4m (£28.4m) installment of the €114m total cost of the licence by a month.

Vodafone, which has until 12 September to make the first payment, is not, however, thought to be considering pulling out of offering 3G services in Ireland.

The move comes as the research house Datamonitor warned mobile phone operators should consider abandoning the roll-out of 3G mobile phone services.

Mobile phone operators spent billions of pounds buying 3G licences in Europe, particularly in the UK and Germany, expecting the new services would provide massive growth opportunities.

But technical problems with 3G, which offers faster internet access, video clips and computer games on handsets, has meant the service has not materialised in the UK.

"Investing billions of euros in 3G licences and infrastructure isn't a decision that anyone would like to make in today's market, but rolling a service out on top of such giant sunk costs makes less sense than abandoning the market altogether," Nick Greenway, Datamonitor's mobile telecoms analyst, said.

Despite the hefty costs of buying the 3G licences and building the infrastructure, it would still prove cheaper for the operators to abort 3G plans "rather than to try and foster a market by subsidising the handsets and services required".

Vodafone, which had planned to offer a 3G service in the UK later this year, delayed its launch until 2003. 3, formerly known as Hutchison 3G, also delayed its UK launch by a couple of months to December.

Datamonitor warned that more operators might follow their lead by pulling out of 3G altogether while others "may go bust or be acquired".

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