Orange sees red as 3G handsets fail to deliver

ORANGE has been forced to delay the launch of 3G mobile services after blaming handset makers for failing to get the devices working properly, the company said yesterday.

It has also emerged that Vodafone was forced to put back the launch of its 3G services - which allow always on, high-speed internet access - by 10 months because the handsets supplied by manufacturers such as Nokia were not up to scratch.

Nigel Hall, Orange’s 3G launch director, joined a chorus of angry mobile phone operators in claiming that handset glitches had been a "major contributory factor" in not being able to launch in the first half of this year.

Orange and the other network operators have lost out on valuable revenues by not being able to launch 3G when they wanted to it. Orange will launch its services in the second half of this year, while Vodafone will launch in the fourth quarter of the year.

But Hall said this was not Orange’s fault as its UK networks were almost ready, and instead blamed the handset makers - Nokia, Motorola, Siemens and Sony Ericsson.

Hall said: "The key thing is that we are making sure that the network interacts effectively with the devices. From the devices point of view, some of the manufacturers need to work a little bit harder."

His criticisms echo comments made last week by the other operators - Vodafone, Germany’s T-Mobile and mm02.

Speaking at a 3G conference in Cannes last week, Arun Sarin, chief executive of Vodafone, said 3G could have been launched 10 months ago if the handsets had been ready.

He said: "(3G) phones are bulky, they get hot, they don’t have battery life. The experience today is unacceptable to our customers."

Steve Trowbridge, a telecoms analyst at SG Securities, said he was not surprised that Orange had experienced problems with handsets. "The lack of handsets has been a problem for everyone." He said Orange had lost "marginal" revenues by being unable to offer 3G, adding that around 3 million users upgraded their phones annually, and only a small percentage of these were likely to sign up to 3G immediately.

Between them, the five mobile phone operators - Hutchison being the fifth - paid a staggering 22.5bn buying the 3G licences in May 2000 in government auctions.

Hutchison, under the brand 3, launched its services last March, but has struggled to attract users and has been dogged by technical problems with the handsets.

The four other operators have opted to sit and wait until the technology has been perfected before they launch services and start recouping any of their investment.

Speaking last week, Peter Erskine, chief executive of mm02, said his company would launch services in larger UK cities in the autumn. But he said 3G would not "get real" until 2005.

Rene Obermann, chief executive of T-Mobile, said: "We still don’t have the devices at hand, so we did not think it was good enough to launch."

Jorma Ollila, president and chief executive of Nokia, responded by claiming that the operators’ networks had not been ready to test the 3G handsets properly.