Vodafone unveils advanced service By Eric Pfanner, International Herald Tribune Thursday, November 11, 2004

LONDON Vodafone, the world's biggest mobile phone operator, introduced long-delayed services like video calling across much of Europe on Wednesday, showing its cards four years after it got caught up in a $100 billion-plus bidding frenzy that gripped the European telecommunications industry.

While mobile operators, including Vodafone, have rolled out so-called third-generation, or 3G, services in Asia, the process has been delayed in Europe by technological glitches and a return to financial sobriety after governments reaped windfalls from the sale of the rights to broadcast 3G signals. Vodafone, for its part, spent about €20 billion for 3G licenses.

Smaller operators have introduced 3G in a few European markets, with mixed success. But the move by Vodafone, which has 140 million customers around the world, brings the benefits of the untethered Internet to a much wider potential market.

"I know we've been talking about this stuff for the last months and years, but the difference between talk and reality is what we're talking about today," Arun Sarin, chief executive of Vodafone, said at a news conference in London.

Vodafone is the first established mobile operator with substantial international presence to offer 3G in Europe, but analysts say the announcement Wednesday will probably be followed soon by word of other operators' plans. France Telecom's Orange, for example, is expected to roll out its European 3G service by the end of the year.

In addition to competition, analysts say, Vodafone may face consumer skepticism about the new services.

"Given Vodafone's size, their budgets and their marketing spend, I have no doubt that this will start to put 3G on the map," said Michelle de Lussanet, an analyst at Forrester Research. "But you have to remember that this is still a very new service."

Sarin predicted that by March 2006, Vodafone would sign up 10 million customers for its 3G service, which will be marketed aggressively under the existing Vodafone Live brand.

Vodafone will try to lure them with an array of new features that go significantly beyond the standard European mobile phone fare of voice calling, text and picture messaging and limited online services. In addition to video calls, users will be able to watch clips of soccer highlights, play video games and download a limited selection of music.

While Vodafone is optimistic that the new services will give 3G a broad appeal and generate significant new revenue, some analysts remain unconvinced. They note that a new operator called 3, backed by Hutchison Whampoa of Hong Kong, has offered video calling for more than a year in Britain and Italy, but only started adding significant numbers of subscribers when it cut prices for ordinary voice services.

Some of Vodafone's new offerings may also offer less than meets the eye, analysts said. The music downloads, for example, provide a selection of only 3,000 tracks for now, and the phones will be able to store only a handful of songs. Because many consumers in Vodafone's 3G target market of 18- to 34-year-olds already have MP3 players - along with digital cameras, mobile phones and other gadgets - they may not want to splash out on a new device that combines these features but compromises on some of their capabilities.

"It might look cool in principle, but in practice it's pretty clunky," said De Lussanet, the Forrester analyst.

In an effort to stimulate the growth of the mobile Internet, Vodafone has changed the pricing model for its current Vodafone Live service, which has used slower, 2.5G technology until now. The company says many consumers were put off by the fees, which included charges incurred while browsing, as well as the cost of downloading video or data. Now it will allow them to browse for free, as long as they stay on Vodafone's proprietary site, or portal. If they venture beyond, they will incur additional fees.

Vodafone is offering 10 handsets for its 3G services, from Nokia, Sony Ericsson, Sharp, Samsung and NEC, though not all of these will immediately be available in every market. Prices will vary depending on the market. In Britain, phones will start at about £200, or $372, unless customers choose subscriptions offering a package of services at set prices.

Vodafone, which is based in Newbury, England, rolled out the new offering Wednesday in Austria, Britain, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal, Spain, Sweden and Switzerland. In some of those markets, it had already been offering limited 3G services. In markets where the company does not have a wholly owned subsidiary, 3G will be offered via partners.

While the 3G introduction is focused on Europe, the stakes for Vodafone may be highest in Japan, where the announcement Wednesday represents a reintroduction. Vodafone's Japanese subsidiary has been offering 3G services for some time, but is a distant third in that market, after NTT DoCoMo and KDDI, hurt by a lack of competitive handsets.

Now, however, Vodafone has something that its Japanese rivals, which use different technology, cannot boast: the ability to roam internationally with 3G.

LONDON Vodafone, the world's biggest mobile phone operator, introduced long-delayed services like video calling across much of Europe on Wednesday, showing its cards four years after it got caught up in a $100 billion-plus bidding frenzy that gripped the European telecommunications industry.

While mobile operators, including Vodafone, have rolled out so-called third-generation, or 3G, services in Asia, the process has been delayed in Europe by technological glitches and a return to financial sobriety after governments reaped windfalls from the sale of the rights to broadcast 3G signals. Vodafone, for its part, spent about €20 billion for 3G licenses.

Smaller operators have introduced 3G in a few European markets, with mixed success. But the move by Vodafone, which has 140 million customers around the world, brings the benefits of the untethered Internet to a much wider potential market.

"I know we've been talking about this stuff for the last months and years, but the difference between talk and reality is what we're talking about today," Arun Sarin, chief executive of Vodafone, said at a news conference in London.

Vodafone is the first established mobile operator with substantial international presence to offer 3G in Europe, but analysts say the announcement Wednesday will probably be followed soon by word of other operators' plans. France Telecom's Orange, for example, is expected to roll out its European 3G service by the end of the year.

In addition to competition, analysts say, Vodafone may face consumer skepticism about the new services.

"Given Vodafone's size, their budgets and their marketing spend, I have no doubt that this will start to put 3G on the map," said Michelle de Lussanet, an analyst at Forrester Research. "But you have to remember that this is still a very new service."

Sarin predicted that by March 2006, Vodafone would sign up 10 million customers for its 3G service, which will be marketed aggressively under the existing Vodafone Live brand.

Vodafone will try to lure them with an array of new features that go significantly beyond the standard European mobile phone fare of voice calling, text and picture messaging and limited online services. In addition to video calls, users will be able to watch clips of soccer highlights, play video games and download a limited selection of music.

While Vodafone is optimistic that the new services will give 3G a broad appeal and generate significant new revenue, some analysts remain unconvinced. They note that a new operator called 3, backed by Hutchison Whampoa of Hong Kong, has offered video calling for more than a year in Britain and Italy, but only started adding significant numbers of subscribers when it cut prices for ordinary voice services.

Some of Vodafone's new offerings may also offer less than meets the eye, analysts said. The music downloads, for example, provide a selection of only 3,000 tracks for now, and the phones will be able to store only a handful of songs. Because many consumers in Vodafone's 3G target market of 18- to 34-year-olds already have MP3 players - along with digital cameras, mobile phones and other gadgets - they may not want to splash out on a new device that combines these features but compromises on some of their capabilities.

"It might look cool in principle, but in practice it's pretty clunky," said De Lussanet, the Forrester analyst.

In an effort to stimulate the growth of the mobile Internet, Vodafone has changed the pricing model for its current Vodafone Live service, which has used slower, 2.5G technology until now. The company says many consumers were put off by the fees, which included charges incurred while browsing, as well as the cost of downloading video or data. Now it will allow them to browse for free, as long as they stay on Vodafone's proprietary site, or portal. If they venture beyond, they will incur additional fees.

Vodafone is offering 10 handsets for its 3G services, from Nokia, Sony Ericsson, Sharp, Samsung and NEC, though not all of these will immediately be available in every market. Prices will vary depending on the market. In Britain, phones will start at about £200, or $372, unless customers choose subscriptions offering a package of services at set prices.

Vodafone, which is based in Newbury, England, rolled out the new offering Wednesday in Austria, Britain, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal, Spain, Sweden and Switzerland. In some of those markets, it had already been offering limited 3G services. In markets where the company does not have a wholly owned subsidiary, 3G will be offered via partners.

While the 3G introduction is focused on Europe, the stakes for Vodafone may be highest in Japan, where the announcement Wednesday represents a reintroduction. Vodafone's Japanese subsidiary has been offering 3G services for some time, but is a distant third in that market, after NTT DoCoMo and KDDI, hurt by a lack of competitive handsets.

Now, however, Vodafone has something that its Japanese rivals, which use different technology, cannot boast: the ability to roam internationally with 3G.

LONDON Vodafone, the world's biggest mobile phone operator, introduced long-delayed services like video calling across much of Europe on Wednesday, showing its cards four years after it got caught up in a $100 billion-plus bidding frenzy that gripped the European telecommunications industry.

While mobile operators, including Vodafone, have rolled out so-called third-generation, or 3G, services in Asia, the process has been delayed in Europe by technological glitches and a return to financial sobriety after governments reaped windfalls from the sale of the rights to broadcast 3G signals. Vodafone, for its part, spent about €20 billion for 3G licenses.

Smaller operators have introduced 3G in a few European markets, with mixed success. But the move by Vodafone, which has 140 million customers around the world, brings the benefits of the untethered Internet to a much wider potential market.

"I know we've been talking about this stuff for the last months and years, but the difference between talk and reality is what we're talking about today," Arun Sarin, chief executive of Vodafone, said at a news conference in London.

Vodafone is the first established mobile operator with substantial international presence to offer 3G in Europe, but analysts say the announcement Wednesday will probably be followed soon by word of other operators' plans. France Telecom's Orange, for example, is expected to roll out its European 3G service by the end of the year.

In addition to competition, analysts say, Vodafone may face consumer skepticism about the new services.

"Given Vodafone's size, their budgets and their marketing spend, I have no doubt that this will start to put 3G on the map," said Michelle de Lussanet, an analyst at Forrester Research. "But you have to remember that this is still a very new service."

Sarin predicted that by March 2006, Vodafone would sign up 10 million customers for its 3G service, which will be marketed aggressively under the existing Vodafone Live brand.

Vodafone will try to lure them with an array of new features that go significantly beyond the standard European mobile phone fare of voice calling, text and picture messaging and limited online services. In addition to video calls, users will be able to watch clips of soccer highlights, play video games and download a limited selection of music.

While Vodafone is optimistic that the new services will give 3G a broad appeal and generate significant new revenue, some analysts remain unconvinced. They note that a new operator called 3, backed by Hutchison Whampoa of Hong Kong, has offered video calling for more than a year in Britain and Italy, but only started adding significant numbers of subscribers when it cut prices for ordinary voice services.

Some of Vodafone's new offerings may also offer less than meets the eye, analysts said. The music downloads, for example, provide a selection of only 3,000 tracks for now, and the phones will be able to store only a handful of songs. Because many consumers in Vodafone's 3G target market of 18- to 34-year-olds already have MP3 players - along with digital cameras, mobile phones and other gadgets - they may not want to splash out on a new device that combines these features but compromises on some of their capabilities.

"It might look cool in principle, but in practice it's pretty clunky," said De Lussanet, the Forrester analyst.

In an effort to stimulate the growth of the mobile Internet, Vodafone has changed the pricing model for its current Vodafone Live service, which has used slower, 2.5G technology until now. The company says many consumers were put off by the fees, which included charges incurred while browsing, as well as the cost of downloading video or data. Now it will allow them to browse for free, as long as they stay on Vodafone's proprietary site, or portal. If they venture beyond, they will incur additional fees.

Vodafone is offering 10 handsets for its 3G services, from Nokia, Sony Ericsson, Sharp, Samsung and NEC, though not all of these will immediately be available in every market. Prices will vary depending on the market. In Britain, phones will start at about £200, or $372, unless customers choose subscriptions offering a package of services at set prices.

Vodafone, which is based in Newbury, England, rolled out the new offering Wednesday in Austria, Britain, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal, Spain, Sweden and Switzerland. In some of those markets, it had already been offering limited 3G services. In markets where the company does not have a wholly owned subsidiary, 3G will be offered via partners.

While the 3G introduction is focused on Europe, the stakes for Vodafone may be highest in Japan, where the announcement Wednesday represents a reintroduction. Vodafone's Japanese subsidiary has been offering 3G services for some time, but is a distant third in that market, after NTT DoCoMo and KDDI, hurt by a lack of competitive handsets.

Now, however, Vodafone has something that its Japanese rivals, which use different technology, cannot boast: the ability to roam internationally with 3G.