Next generation of cell phones to arrive on schedule

Poland's three mobile operators - Polska Telefonia Cyfrowa (PTC), Polkomtel and PTK Centertel - are moving ahead with their plans to offer third-generation (3G) mobile service in Poland by 2005, despite a recent announcement by two big players to abandon the service rollout in several Western European countries. Spain's Telefónica Móviles and Finland's Sonera announced in late July that they were canceling their joint venture to introduce 3G, or universal mobile telecommunications system (UMTS), services in Germany, Italy, Austria and Switzerland. International news reports said their retreat would likely lead to a series of UMTS pullouts by other big European telecom operators that have become disillusioned with the heavy financial investments the service would require and its potentially low returns. And given the huge capital required to build out UMTS infrastructures, the lack of availability of 3G handsets and the unlikely investment return on the expensive service, telecom investors across Europe have largely soured on plans for 3G service, which would deliver real-time video and movies on mobile handsets. But Poland's three mobile operators said they largely planned to stay on track to start 3G service by 2005, although they are keeping their eyes on their Western European counterparts - which will likely start offering the system earlier than 2005 - to avoid their missteps.

"It's impossible that (we) would resign from the license because we are competitive in one market," said Maciej Rogalski, the director of the legal department at PTC. "To resign would mean a big failure." Rogalski said the prospects for the 3G rollout in Poland could not be compared to Germany, Europe's biggest telecom market, where the government granted six 3G licenses - about two more than the German market can support. One German 3G license was purchased by the Telefónica and Sonera consortium, which planned to start mobile operations there from scratch. In Poland, only three licenses were sold to the three established mobile players. "We are observing the developments among players, and we have confirmed that we did the right thing by postponing the start of UMTS in Poland," said Leszek Kamiński, Polkomtel's public relations director. He added that Polkomtel would be ready to roll out services by 2005. The Polish operators were supposed to start offering commercial UMTS services by 2004, but Poland's telecom regulator (URTiP) decided in April to push ahead the start date a year after the companies requested the delay. Western European operators have buried themselves under mountains of debt after spending a collective €150 billion on 3G-license purchases and technology. Poland's three mobile companies each paid €650 million for their licenses in Dec. 2000 and have estimated that the service's rollout would cost $1 billion-$2.7 billion (€1.02 billion-€2.75 billion) per operator.

"With today's situation on the telecoms market, business is very difficult now … and the market is not mature enough to accept 3G," said Krzysztof Sieczkowski, the product development director of PTK Centertel, whose main shareholder, France Telecom, has its own financial problems, partly from investing heavily in 3G licenses in Western Europe. Sieczkowski added that from mid-2004 to 2005, all three Polish operators would start UMTS trials, although the commercial service would probably not be offered, mainly due to a lack of 3G handsets. So far, Poland's three mobile companies have not invested any significant amounts in the development of 3G service since handset vendors have started conducting preliminary tests.