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Thursday, 5 April, 2001, 14:29 GMT 15:29 UK
3G faces EU setback
Motorola Wap phone
Snook says that demand for WAP phones will take off
EU ministers have agreed an ambitious new telecoms package to harmonise regulations across member countries.

But telecoms firms, already struggling under a heavy burden of debt, fear tighter regulations could further delay the launch of the next generation, or third-generation (3G), mobile phone networks.

In order to create a suitable environment for investment, it is necessary to impose clear limits on regulatory intervention

Letter to the EU from telecoms firms
And mobile phone firms say that the need to comply with complex regulatory requirements will also deter investment in the new networks.

Telecoms firms will not be able to recoup any of the heavy investment in buying 3G licences and building networks until the new fast-speed services are rolled out.

The news comes after Hans Snook, former boss of the UK's Orange phone network, said he does not expect to see serious use of the new networks before 2004, almost two years later than expected.

Speaking at the Accenture Global Communications Forum in Miami Beach, Snook said that there will be no "meaningful" building of 3G networks until the end of 2003.

Regulatory burden

Mobile phone operators had called for less regulatory pressure ahead of the EU meeting.

"In order to create a suitable environment for investment, it is necessary to impose clear limits on regulatory intervention and to increase reliance on competition law," said leading operators such as Orange and T-Mobile in a letter to EU telecoms ministers ahead of the meeting.

Prototype Ericsson 3G phones
Third generation mobile phones could take much longer to come to market
Ministers took a marathon 10 hours of intense debate to decide how to regulate telecoms firms.

The deal was reached only after ministers had rejected a controversial Commission proposal to have the last say in telecoms regulation.

This leaves regulatory power in the hands of national telecoms authorities.

EU telecommunications Commission Erkki Liikanen accepted that the time was not yet right to give EU-wide regulatory power to the Commission, but warned that it will happen sooner or later.

Mobile future is bright

But despite expecting delayed launches, Mr Snook remains optimistic about the outlook for mobile phone companies nevertheless.

The price operators have paid for third-generation licences will ultimately be seen as conservative once the true potential of these networks is realised.

Hans Snook
Mr. Snook said pessimism about the future fortunes of mobile phone firms was misplaced.

A bullish Mr Snook said mobile phone firms have not paid too much for licences to operate the 3G networks that will let operators offer a slew of novel services.

But operators will have to work hard to drive customers to new services or risk getting pushed out of the way by other companies keen to reach consumers via a mobile phone.

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