Mobile operators welcome 3G delay
Industry says techno-logy too expensive in current business climate
By Aleksander Nowacki
Mobile phone operators welcomed a suggestion by Witold Graboś, president of the Office of Telecommunications and Post Regulation (URTiP), that the license terms for third-generation (3G) mobile-phone technology could be altered to exclude a specific reference to the Universal Mobile Telecommunications System (UMTS).
The technology has been dubbed "Unlimited Money To Spend" by disgruntled shareholders in western European telecoms, which have sunk billions of euro into the flashy "next big thing" that has, so far, proved more a flop than a cash cow. Most of the services once thought possible only under the UMTS protocol, including banking or picture-taking and transmission, are now offered by GSM operators. The only advantage that UMTS seems to offer customers is video streaming, and operators are convinced that this service alone would fail to attract the necessary minimum of higher-paying customers.
"There is no market for the technology in this country, and this is not going to change in the near future," said Antoni Mielniczuk, director of communications at Polska Telefonia Cyfrowa (PTC). He cited the case of Hutchison 3G UK, which has slashed voice call costs to less than half the rate offered by GSM operators in that country, as an example of how UMTS could prove damaging to the mobile market.
"Do you really want to spend billions on building infrastructure, only to offer a service that is available anyway at rock-bottom prices?" Mielniczuk said. "Voice ... is not what UMTS was originally designed for."
Keen to avoid potentially damaging price wars, local mobile phone companies have already applied twice to have the deadline for the introduction of the UMTS technology delayed. Originally planned for this year, the launch has now been postponed to 2006, and it is increasingly likely that this deadline will not be met either.
Citing technical difficulties with UMTS and the huge investment outlays necessary to make its launch possible, Graboś suggested on Tuesday that license terms could be altered to include a less specific reference to a 3G technology of any kind.
"UMTS requires huge expenditure," Graboś said. "The infrastructure has to be built from scratch. Should the idea not prove viable, the costs of mistaken decisions would have to be borne out by users of the existing (GSM) technology."
He went on to say "there is no backing away from the introduction of 3G technology. It could, however, be an alternative, cheaper and better technology (than UMTS)."
Speculation is rife as to what the URTiP's president could mean by an "alternative" 3G technology. As PTC's Mielniczuk pointed out, one alternative is Wireless Local-Area Network, which is not, strictly speaking, a 3G technology. He said that, on the whole, Graboś's remarks reflected a "welcome development."
For mobile telephony operators, Graboś's statement presents an opportunity to kill two birds with one stone. "There remains the problem of license fees (for UMTS)," said an executive at one of the operators. "Many other countries have solved the problem by waiving them altogether. We have to see if the government displays enough imagination to do away with these costs, (which) could cripple the industry."
Calls for scrapping the fees have not met with an enthusiastic response in the government. "Operators should not look to the parliament to solve the problems they have brought upon themselves (by seeking the licenses in the first place)," said one industry insider.
