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Vodafone will make sure suppliers ready for 3G
Posted on 16-Oct-2003 00:13. | Tags Filed under: News.

Vodafone will make sure suppliers ready for 3G
While rival "3" struggles to get handsets for current customers, Vodafone Group says it'll make sure suppliers know they have to deliver.

"3" is having a hard time to get 3G mobile handsets from manufacturers to distribute to users in UK and Italy. It's possible they'll not reach the expected 1 million customers in UK by the end of this year.

On the other hand, Arun Sarin, CEO of the Vodafone Group, has given a timely warning to terminal and infrastructure vendors that they need to get their acts together on interoperability if they are to grow the overall mobile market. Speaking at an ITU plenary session during the ITU World Telecom 2003, ‘Satisfying the customer’, Sarin said: “In terms of 3G handsets being available in high volumes, we’ll be in a fantastic position to launch services by September or October 2004, but we need to make sure that the services are going to be a lot better than 2G or 2.5G. That being the case, if need be, we’ll bring our formidable size to bear on vendors to ensure that there is interoperability.”

Vodafone’s ‘formidable size’ is simply 120 million subscribers spread across 26 countries, and its purchasing power is considerable. The mobile operator will hope to use that weight to “encourage” greater cooperation among vendors and ensure that future services are sufficiently attractive to allow profitable revenue growth. The key challenge for 3G is, of course, to persuade 2G/2.5G customers that it’s worth the upgrade.

However, there are a few interoperability hurdles still to overcome. “As the Hutchison 3G network in the UK has demonstrated, there’s still a problem of dropped calls between 2G and 3G networks,” says Nigel Deighton, an analyst with the Gartner Group. “The vendors need to get this problem sorted out as soon as possible.”

According to Sarin, Vodafone is “aggressively” deploying 3G. “We’re spending a couple of billion [US] dollars a year on it,” he said. With the stakes so high, Yankee Group’s Lewis says the industry can’t afford to “screw up” again on making promises on service and not delivering. “Every player in the value chain needs to work together to make sure that the ‘pie’ gets bigger and not everybody is looking out for themselves.”

For the future, Sarin is optimistic and believes the mobile industry is about to deliver on service promises made in 2000. “The wireless industry is on the verge of sweeping change and innovation, and that bodes well for [mobile] customers,” he said. He also added that future mobile growth was “inevitable”. “In 1991, telecom revenue was US$350 bn, with 95 per cent of that accounted for by fixed traffic and mobile the remainder. Ten years later, the market size was US$850 bn and the mobile revenue share was 40 per cent – that still leaves plenty of room for growth.”

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