Vodafone, the world’s biggest mobile phone firm, has admitted that the launch of its third-generation (3G) phone services could well slip into 2003.
The news comes as the company slows down construction of its 3G mobile phone networks. Vodafone chief executive Sir Christopher Gent attributes the delays to a lack of handsets.
The news caused Vodafone shares to fall 4.6% to 141.25 pence on Friday. The stock has now lost almost two-thirds of its value since March last year.
A delayed 3G launch means that it will be even longer before Vodafone is able to recuperate some of the money invested in securing the new licences and building the network.
3G mobile phones promise to relay information 40 times faster than the current phones and will be able to display video, stream music and connect at high speeds to the internet.
The slower pace of development means that the group now plans to build 750 3G base stations in the UK by the end of this year instead of the 1,200 originally planned. One Vodafone analyst said that the slowed rollout would mean a cut in capital expenditure on 3G of 5% in the year to March 2002 and a 13% cut the following year.
The delay has been caused by the late production of dual mode handsets which support both 3G and existing services. “There is, despite what some manufacturers say, a slip in the availability of handsets,” Sir Christopher told the Wall Street Journal.
Vodafone’s arch-rival BT is pushing ahead to launch the UK’s first ever third-generation phones on the Isle of Man within the next few months. And BT pipped Vodafone to the post in launching its GPRS mobile phone network – mobile services which are not as advanced as 3G but offer an always-on connection to the internet.
In Japan, NTT DoCoMo has already launched a trial of third-generation phones but experienced a series of glitches. Investors have shunned the telecoms sector because of fears about the large amount of money invested into 3G mobile phones.
They feel that there is not enough evidence to show whether the phones will work successfully, attract enough users or be commercially viable.