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Nokia unveils its first 3G phone

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CIOL Bureau
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Paul de Bendern

HELSINKI: Nokia unveiled its first new generation color-screen mobile phone on Thursday, but it will not be on sale for a while. Model 6650 of the world's largest cell phone maker has a built-in camera, a large color screen and will work on both the current, second generation (2G) of GSM networks as well as the third generation (3G) WCDMA systems. The 3G mobile networks have been designed for fast and efficient data communications such as a videophone calls alongside better quality voice communications.



The features that Nokia showed at a media presentation in Helsinki on Thursday with local telecoms operator Sonera were similar to those already available on 2G networks, such as picture messaging and sending small clips of moving images. Industry pundits have criticized the lack of new features.



However, Nokia told investors that the new model would not cause a revolution in mobile communications and that it would not to be on sale for another six months. The handset maker and mobile carriers are still ironing out teething problems.



Nokia Mobile Phones Executive Vice President Anssi Vanjoki played down expectations for 3G by telling Reuters earlier that this week operators did not yet need 3G networks to offer services such as high-quality picture messaging.



The estimated selling price of around 750 euros ($734.6), before subsidies reflected the similarities with Nokia's existing camera phone for 2G networks, the 7650, which retails with a similar price tag.



Battery life of the phone was two hours and 20 minutes of talktime and up to 14 days of standby time, less than normal handsets but more than early 3G phones from rivals in Japan.



"The main problem is interoperability between networks and terminals and we're working on that now," said Sonera's mobile networks manager Mika Matturi. Nokia shares closed 10 percent higher at 14.48 euros, sharply outperforming the DJ Stoxx European technology index.



Nordea Securities analyst Jussi Uskola, who rates Nokia a "buy," said the stock was up on general positive sentiment in the mobile phone market and good U.S. macroeconomic data.



"The phone looks good, and the dimension are okay but the problem is the high price." He and other analysts said the phone had limited talk-time and failed to offer many new features that are not available on current models.

STUMBLING BLOCKS

Another stumbling block slowing down introduction of third generation phones in Europe has been the capability of a handset to switch between existing nationwide 2G networks and new 3G networks which will initially only cover cities.



Sonera Chief Executive Harri Korponen said consumers in Europe, unlike in Japan, would not accept a mobile phone service that would work on only a third generation network.



Nokia said it had sorted out the issue with the new handsets, which were shown working at Thursday's media presentation in a modern art museum in Helsinki.



"I struggle to find any angle to this that is interesting. We won't know until next year how well the handsets work. At this point we can only take Nokia's word for it," said Evli Bank analyst Karri Rinta, who rates Nokia a "buy."



Sonera's Korponen also said operators could not launch 3G networks with just one phone, another reason the carrier was not selling the service to consumers yet.



"We need more phones. One model is not enough to launch on a massive scale," he said.



Evli Bank's Rinta said the general outlook for the mobile phone market looked good, but added the 3G market would not begin to be interesting until 2004.



In Britain and Italy, Hutchison Whampoa will be the first European operator to go commercial with its 3G service, dubbed "3," taking delivery of 1,000 handsets on October 2 from suppliers NEC 6701.T and Motorola, rising to 100,000 by the end of the year.



In Austria, mobile operator Mobilkom on Wednesday passed the required license threshold of 25 percent of the population covered by 3G, but a lack of phones meant it could not yet sell the service to consumers.



DELAYS



The rollout of 3G networks has been plagued by delays, with cash-strapped operators choosing to focus on repairing their battered balance sheets instead after spending billions of euros on 3G licenses in 2000.



Operators, like Vodafone, are also paying more attention to providing mobile phone services on current networks than boosting consumer usage of their phones.



Multimedia messaging services (MMS) that runs on existing networks is touted as one solution; with MMS, consumers can send and receive digital photos, text and sound via their phones.



© Reuters Ltd

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