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New handset could define 3G in Europe - Euro wireless: all the wireless buzz from Europe

3, the UK's 3G leader, has recently introduced a new member to the 3G-handset family--the Motorola A920. It's depicted as combining a videophone, games machine, MP3 player, and PDA-style organizer into one unit.

Since 3 launched, the 3G operator has acquired about 155,000 subscribers. Recent studies have shown that many people may have resisted signing up because of the limited choice of handsets available. The hopes are that the multifunctional A920 will aid in highlighting the difference between 3 and its competitors in the world of 2.5G.

So, if this A920 is to become the benchmark for 3G in Europe, what can you do with it? For years now, pundits and analysts have been feeding media and consumers with expectations, authored by MNOs and handset manufacturers. The consumer is either expecting nothing or a mobile utopia.

Mobile video calls (P2P) seemed to be the unique selling point 3's marketing efforts concentrated on in the early days. P2P video calls are a great USP but not right now. It will find the same obstacles that MMS has found--lack of compatible handset penetration.

Content, on the other hand, is a far more potent attraction to a prospective 3G consumer. On the new networks, content will either make or break the bottom line. A 3G network is all about one thing and one thing only--burning bandwidth. No matter how it's packaged, revenue is dependent on it. Finding appealing ways for consumers to do this and do it cost effectively is the goal for 3G MNOs and their ad agencies.

The latest Motorola handset claims a 2-minute download in 30 seconds of "good quality" video. So in theory, downloading highlights of the football game you missed, P2P gaming, or exclusive music content and the like is the new currency for the mobile world.

Telecoms are counting on 3G services to stimulate fresh demand in a mobile market that's approaching the saturation point in the majority of industrialized countries. However, many operators burdened with debt after paying hefty prices for the spectrum licenses have been forced to postpone the launch of their own 3G networks.

Some analysts are skeptical that mass demand for the new services will materialize in the short term, arguing that few consumers will be willing to pay the hefty premiums levied by 3G MNOs.

In an effort to increase its market share, 3 has cut charges on its basic, voice-only service, competing directly with traditional mobile operators such as Vodafone UK. This change in its strategy is an obvious attempt to up sell subscribers to 3G services, rather than taking on a new market head on.

Early indications are "promising," states Hutchison. Their optimistic 3G forecast came as Hutchison, 3's parent company, which also has interests in hotels, container ports, supermarkets, and oil, turned in a net profit of HK$ 6bn ($778m ; 466.8m [pounds sterling]) for the first six months of the 2003, up from HK$5.9bn during the same period last year.

Tom Dibble, a wireless strategy consultant, is founder of Screen Pilot, a digital media consultancy, and also founder of Euro-wireless.org, a forum dedicated to dealing with commercial, strategic, and technical issues on the evolution of the wireless age in Europe and the U.S.

tdibble@sys-con.com