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Thursday, 23 November, 2000, 07:15 GMT
New phones 'too primitive to profit'
mobile phone
Future mobile phones will not be as different from current ones as had been thought
Future generation mobile phones, for which operators have spent billions of dollars securing airwave space, will not prove the cash cows firms had hoped, an expert has warned.

Japanese phone operator NTT DoCoMo, which pioneered internet access from mobile phones, believes that third generation (3G) handsets will be little advanced from previous models.

While 3G phones will be able, as operators hope, to receive colour video transmissions and high-quality music, large files will prove too costly to download.

According to an article in Thursday's Financial Times, Keiichi Enoki, who runs NTT DoCOMo's i-mode internet service, said:

"The conclusion is that we will perhaps offer short video clips of 10 to 15 seconds and previews of music that people can purchase to download at home through their PCs or TVs."

Cash cow

The ability of 3G to carry video and sound clips has been seen as a large potential revenue stream for operators.

The technology gap, which NTT DoCoMo has been researching, will leave firms struggling to justify the 100bn euros spent on buying European licences to operate the services, Mr Enoki said.

"I don't think the business model will fundamentally change from 2G to 3G," Mr Enoki said in the FT.

"The essence of the cellular phone business will be the same."

Bidding concerns

The comments follow increasing concerns over the sums paid by operators earlier this year for airwaves used for running 3G licences.

The UK and German governments netted $35bn (22bn) and $46.1bn respectively.

But more recent auctions have been less buoyant, with Italy gaining less than half the money it had hoped for.

And Switzerland last week postponing its 3G auction after the number of bidding operators matched the number of licences on offer.

The Swiss Federal Communications Office is expected to announce its next move in December.



Mobile web worries
See also:

24 Oct 00 | Business
17 Aug 00 | Business
27 Apr 00 | Business
13 Nov 00 | Business
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