No 3G until at least 2006

The number of people subscribing to 3G services in Europe will not take off until at least 2006, but almost two-thirds of mobile subscribers will be using it by 2008, according to new research from telecoms advisors Analysys.

Financial and technical reasons have been cited by operators for delays in the launch of 3G UMTS services, including difficulties in getting mast sites, problems sourcing handsets and questionable demand for the services themselves.

The Analysys report, Western European Mobile Forecasts and Analysis 2003-2008, says there will be just 1.3 million 3G subscribers by the end of this year and that even by 2005, numbers in western Europe will remain extremely small, with just over 20 million active mobile subscribers using a 3G service.

Only Hutchison 3G, Manx Telecom and Mobilkom Austria had launched commercial 3G services in Europe by the end of September 2003.

Italy will take the lead with 3G followed by the UK and Germany, and Analysys predicts that 3G subscribers and revenues will then rise sharply from 2006.

Katrina Bond, co-author of the report, said in a statement: "We expect to see a noticeable shift from GPRS to UMTS beginning in 2006. By 2008, 61 per cent (204 million) of Western European mobile subscribers will be using a 3G device, and UMTS will be the dominant mobile technology as customers using 3G will generate revenues of around €82bn."

The report also points out that the delay in 3G will boost GPRS, with revenue from GPRS subscribers forecast to grow from €15bn in 2003 to a peak of €73bn in 2006.

Ariel Dajes, co-author of the report said in a statement that this will provide a much wider window of opportunity for GPRS technology.

"All operators in key Western European markets have launched GPRS services, and most now also offer multimedia messaging and downloadable games. Although initial take-up of GPRS services was low, improved service packages for consumers and businesses are now accelerating growth. Vodafone live!, for example, had signed up two million customers by the end of July 2003."