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3G to take off in Europe this year, US 2 years behind - report

By Wolfgang Gruener, Senior Editor

May 21, 2004 - 11:17 EST

Chicago (IL) - Analysts believe that third generation (3G) mobile phones will become an attractive alternative in 2004 - at least in Europe and Asia. US consumers will have to wait another 24 months until broadband applications will make their way to the cell phone.

Key reason for the final arrival of UMTS, Europe's 3G technology following GSM and GPRS, is the build out of base-stations and infrastructure throughout Europe. According to Raymond Jodoin, Director of Wireless Infrastructure Research at ABI Research, the 2003 growth rate of available 3G infrastructure will double in 2004. "Coverage is widely available across Europe especially in urban areas such as Milan, Munich, or Madrid - and it is spreading quickly," Jodoin said. UMTS coverage has reached about 90 percent in Europe, according to ABI.


As also Asia Pacific is getting ready to make its jump to next generation cell phones, users in the US are just getting used to camera and data capable phones. While transferring data become equally important as simple voice transmission through cell phones in many parts of the world, voice is still the dominating cell phone application in the US. According to recently released research data from Jupiter Research, most consumers in the States prefer cheap or free phones over camera-equipped devices even, if there are priced as low as $49. As users get used to SMS, MMS and taking pictures with their phones, carriers are taking first looks to 3G. "We are not trying to step in the quick sand," Jodoin said.

UMTS is the 3G path of T-Mobile, Cingular Wireless and AT&T Wireless; the latter two announced their intention to merge last February. Cingular and AT&T Wireless however still have TDMA and GSM in their current technology portfolio and will have to migrate to EDGE, which is seen as a result of an effort between TDMA operators and vendors to develop a common set of 3G standards that support high-speed data, according to industry group 3G Americas. EDGE stands for Enhanced Data rates for GSM Evolution with peak rates of 473 kbps and average throughput of 80-130 kbps. So far, no decision for EDGE has been detailed yet and the only GSM-only provider in the US, T-Mobile, might not have the bandwidth to jump to UMTS on its own, Jodoin said. "We are at least two years away from seeing UMTS in the US."

Jodoin believes that 3G such as UMTS will catch on quickly in the US, despite of voice centric user behavior. "It is all a matter of exposure and price," he said. "In Italy, for example we have noticed UMTS plans drop to about $50 a month, which is very attractive. Also, handsets have become available at reasonable prices."

http://www.tomshardware.com/hardnews/20040521_111707.html