Vodafone to go for 3G evolution

Vodafone's launch of 3G will be not so much of a launch as a gradual rollout - and some of its customers may never use, it according to company chief Arun Sarin.

Addressing the FT World Mobile Communications conference in London, Sarin reportedly said: "For us 3G is not a big bang. It's an evolution."

He added that the company would gradually roll out 3G around the world and that by the time third-generation technology was in the hands of 75 per cent of its customers, the final 25 per cent may not need it because there could be a new technology with more appeal.

Sarin called for closer collaboration between telcos and handset makers to develop the next generation of operating system, beyond GSM. Otherwise, he said, the industry might become fragmented.

Four years after the operators coughed up $100bn for 3G licences, Vodafone is rolling-out its 3G network in Portugal and Germany. In Japan, there is fierce competition in the booming 3G market and Vodafone is struggling on both the technology and the handset front.

Its rivals have opted for CDMA 2000, while Vodafone has taken the rival European W-CDMA standard. Sarin predicted that the company's results would pick up as its W-CDMA handsets improved.

Sarin still sees growth potential in the voice market as mobiles eat into the dominance of fixed-line telephony and an evolutionary approach to introducing 3G will mean that profits will not take an immediate hit as the costs of installation and handset subsidies will be spread out over years.