Sonera, Nokia backpedal on 3G launch plans

Nokia Corp. and Sonera Corp. will make some 3G (third generation) mobile telephony announcements in Finland on Thursday, but it will be far from the mass market commercial launch of a high-speed mobile network and services they promised earlier this year.

In March, Nokia Mobile Phones Executive Vice President Anssi Vanjoki announced that Europe would see its first mass market 3G introduction on Sept. 26. “We are going for a mass market launch, not a techno launch,” he said in a presentation at the CeBIT trade show in Hanover, Germany.

The reality is very different. Nokia will show a new handset that can work on high-speed 3G networks as well as on existing networks, but insiders expect the device won’t be in shops until next year because 3G networks are not ready.

Sonera will introduce a service that has the 3G tagline, but is actually offered on existing GSM (Global System for Mobile Communications) and GPRS (General Packet Radio Service) networks. The service will work on phones that support J2ME (Java 2 Micro Edition) and MMS (Multimedia Messaging Service).

“Sonera will launch 3G mobile services. Those will initially operate on the present GSM and GPRS networks, but will operate on the 3G network within the coming months,” said Essi Pekkala, a Sonera spokeswoman. Sonera now plans “a limited commercial pilot” of its 3G network early next year, she said.

3G networks allow high-speed, always-on mobile data connections. The industry has promoted services such as video conferencing and streaming video on 3G phones. Java allows small applications to be run on phones, while MMS enables the user to receive picture messages and audio clips, far from video conferencing and movies.

Cash-strapped and debt-laden mobile operators across Europe keep delaying their plans for the rollout of 3G services.

Even Nokia, the world’s largest handset maker and one of the leading network vendors, did not foresee the delays when it said 3G would become available in Europe on Sept. 26.

“Nokia anticipated 3G networks to be up and running at this point, but the reality is very different. They committed to the Sept. 26 date because they made such a fanfare about it,” said Ben Wood, senior analyst with Dataquest Inc., a unit of Gartner Inc. “This will be a technology launch, not a mass market launch.”

Wood expects Nokia to further tone down the 3G hype when the handset maker unveils its first 3G handset on Thursday. 3G won’t be a brand new platform for fabulous services, but will be a platform that allows services that are offered today on GSM and GPRS networks to be enriched and work better, he said.

“Nokia will position 3G as being an evolution instead of a revolution, which it was billed to be in the past years. Because of the slowdown in 3G, operators have had to reassess what their service is going to be,” he said.

U.K. mobile phone operator mmO2 PLC, which is still doing extensive trials with 3G on the Isle of Man, also sees 3G as an evolution from 2.5G or GPRS.

“2.5G is pretty close to 3G and you can argue for the need of 3G. It is an evolutionary thing. You need 3G when the 2.5G network fills up,” an mmO2 spokesman said. “The feedback we are getting from the Isle of Man is that Web browsing, e-mail on the move and online gaming are the most popular. You can get that on 2.5G as well.”

Meanwhile, the race to be the first operator in Europe to offer commercial 3G services is still on. Analysts expect 3G services will likely go live first before the end of the year on networks majority-owned by Hong Kong-based Hutchison Whampoa Ltd. in both the U.K. and Italy, with handsets being supplied by NEC Corp. and Motorola Inc.

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