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EDITIONS
Friday, 9 August, 2002, 15:57 GMT 16:57 UK
Vodafone 'delay' to 3G
Vodafone shop and mobile phone
Will consumers want the new mobile phones?
Vodafone is to postpone the sale of third generation mobile phones in the UK until next year.

The company has said it will not sell any third generation (3G) phones outside of Japan this year because of a shortage of handsets, a report in the Financial Times said.

Vodafone had previously been expected to launch 3G services in the UK, Germany and Spain in the second half of this year.

Vodafone confirmed that it would not launch third generation mobile phone services in the UK until next year.

'Nothing has changed'

But the firm dismissed suggestions that this amounted to a delay, saying that this had always been the company's intention.

"Nothing has changed in terms of timing," a Vodafone spokeswoman said.

"We are opening 3G this year but will not be promoting it.

"We said back in May we would be opening it but not promoting it. It depends on how you define a launch,"

In the City, the news failed to stem a creeping recovery in Vodafone shares, which closed at 80.5p hit on 3 July.

On Friday, the stock closed at 97.75p, 1.25p higher on the day, if well below the 399p level hit two years ago.

Technical concerns

It is unclear how strong demand for 3G services will be and questions remain as to when - and if - mobile phone companies will reap the hoped-for returns on their investments in the new technology.

Technical problems and a shortage of handsets could further hamper telecom companies' ability to make profits from the new services.

A report in Germany's Die Welt suggested that Vodafone was unhappy with the technical features of Motorola and Nokia mobile phones.

Hutchison Whampoa has said it still plans to trial its services in Britain and Italy this year.

"We are definitely still going ahead. We will start our customer trial programme around October, " a spokesman said.

"We have signed agreements with Motorola and NEC, so we will have an abundant supply of handsets when we launch."

'Prudence has prevailed'

Earlier this week, it emerged that services in Sweden - expected to be one of the first European countries to offer the new services - were likely to be delayed.

Orange, one of the four licence holders, has asked for a three-year delay to the schedule.

Analysts said operators would rather see 3G come in late rather than prove disappointing.

"They can't afford to fail, therefore prudence has prevailed," said John Hayes, fund manager at F&C Management in London.

"It's very difficult to blame the operators," Mr Hayes added.

"New technologies tend to come in over budget and late."

See also:

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