Optimistic About 3G Deployments, But Fear Handset Supply, Survey finds

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NEWS
Issue #2001 - 04 (Jan. 2001)
(Updated on Jan. 24, 2001)

MARKET OUTLOOK

Optimistic About 3G Deployments, But Fear Handset Supply, Survey finds

Even though some industry analysts paint a cautionary picture of the emerging 3G environment, industry vendors continue to be optimistic about 3G deployments but have concerns over the lack of compatible handsets, according to a survey published by ARC Group.

Steven Hartley, an ARC Group consultant, says, "The industry is clearly keen to get 3G networks up and running as soon as possible" along with a host of new data services to be offered to their customers. "However, experience of WAP and GPRS handsets supply problems still worries the industry immensely and a repeat with 3G could have serious ramifications for attracting customers."

"The 3G Industry Survey"

Of the 560 3G professionals surveyed 64 percent, expected testing of 3G networks to commence in 2001, while 65 percent of the participants predicted commercial consumer launches to begin during 2002.
Over 50 percent of the respondents expected GPRS to be deployed by the majority of GSM operators in their country, whereas less than 25 percent predicted the same of EDGE deployment.
A majority of 82 percent of participants felt that a lack of handsets will be a major barrier to the adoption of 3G services.
While 48 percent of professionals believe that 3G services will reduce churn, 31 percent think otherwise.
A data rate of 90 kbps is expected at the time of full consumer UMTS launches by 42 percent of the respondents.

In addition, the survey contains primary data, cross-correlations, charts, and quantitative analysis.

For more information: http://navigation.helper.realnames.com/

Mobileinfo Comments and Advisory: We believe that 3G deployment will and should go ahead at a fast pace - it has a well-defined need to meet the expectations of voice and wireless data applications. We agree that handset growth may slow down after 2005. As consumers utilize multiple applications from a service provider, they tend to become dependent - therefore, churn rate will decrease. However, sustained data rates on 3G will be slower than what is being promised - we should learn from much simpler technology i.e. cable and wireline networks. When lots of people start using wireless data in a given geographical area, effective throughput with 3G will be much slower. May be, we can get some cues from our experience with fixed and wireless LANs to extrapolate what we can expect with 3G. Remember, with spectrum limited, techniques available to expand capacity are limited. You can not lay multiple spectrums.

Note: This news release may contain forward-looking statements. Readers should take appropriate caution in developing plans utilizing these products, services and technology architectures.

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