All eyes on T-Mobile for 3G

Kirstin Ridley and Boris Groendahl

HANOVER: Last hopes that one of Germany's mobile phone operators will unveil a high speed, third-generation (3G) mobile phone fit for the high street at the CeBIT trade fair now rest with market leader T-Mobile.

T-Mobile, which is holding a news conference as CeBIT officially throws open its doors to the public, has long stated it does not want to mimick arch-rival Vodafone Group Plc's phoneless 3G launch.

Other rivals took Vodafone's lead, opting for 3G laptop cards ahead of handset sales from April. But hopes that T-Mobile will become the first major operator in Europe to start selling 3G phones were triggered last month after it said it expected to unveil 3G phones in "weeks not months".

However, the Deutsche Telecom-controlled group maintained a strict "no comment" policy ahead of what it promised would be an interesting announcement.

Vodafone, the world's largest mobile phone company by revenue and the number two in Germany, last month launched Europe's maiden 3G laptop data card, which has transmission speeds rivalling broadband, high-speed Internet connections.

Vodafone's Chief Executive Arun Sarin has said bluntly that the 3G handsets being paraded by the likes of Finland's Nokia, Motorola of the U.S. and NEC of Japan, were not currently acceptable for customers.

While rivals scoffed at the time at Vodafone's decision to opt for a phoneless launch of 3G -- a delayed technology which promises quality audio, visual and data services over mobiles -- two rivals followed suit on Wednesday. E-Plus, the number three German group controlled by Dutch carrier KPN, and fourth-ranked O2 Germany, owned by British-based mmO2 Plc, both launched 3G laptop cards that offer Internet speeds of up to 384 kilobits per second.

While O2 Germany is also exhibiting a 3G phone made by Finnish handset heavyweight Nokia, the Nokia 7600, it barely mentioned the handset during presentations. And it said the phone would not be for sale before the second quarter.

MmO2 has said that although it originally expected to be able to test and de-bug 3G phones over a period of three to six months, testing handsets that some argue are about 30 times more complex than current GSM phones last nearer one year. It says it does not expect quality 3G phones until mid-2005.

Meanwhile, E-Plus said it would start selling its first 3G handsets in the summer. Its parent KPN is expected to offer 3G phones in the Netherlands and Germany that are powered by i-mode software designed by Japanese ally NTT DoCoMo.

"There is common agreement in the industry that the 3G handsets need to be equivalent to current high-end GSM handsets in terms of size, weight and battery life in order not to disappoint customers," notes Goldman Sachs.

"At the same time though, doubts over near-term mass market availability of appealing (3G) handsets remain."

But equipment makers are pulling out the stops to meet operator demands for 3G handsets, and Vodafone's Sarin has said he expects to have "millions" of 3G handsets in the shops in the second half of the year.

© Reuters