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UMTS: Slow Start to a Big Future

UMTS is going to establish itself more slowly than many people expected. It is anticipated that by the year 2010, only one out of every two German mobile phone users will be taking advantage of third-generation services. The other half will be content with GSM services.

However, the UMTS operators will serve financially stronger customers. This is the conclusion reached by the market researcher Mathias Plica, managing director of Xonio and author of the Xonio mobile phone report, at the start of CeBIT 2001. This year's high-tech trade fair in Hanover is the starting signal for the industry in the UMTS-related market of mobile Internet and mobile commerce.

The message to everyone planning their business activity for the next decade is: if you go with GSM, you'll have a good hand. According to Plica's predictions, even at the end of the decade there will still be more than 30 million people in Germany using the digital networks of the second generation.

Although UMTS has lost a lot of its shine in the course of the past few months, parallel to the sinking share prices of the major telecommunications providers, Plica still believes, "The visions attached to UMTS are completely realistic." According to the head of Xonio, the fact that the cost of the licenses in Germany, Great Britain, Italy and France was too high to still allow for a reasonable business plan must be seen relative to the backdrop of internationalization.

"Naturally, the license costs were pushed dizzyingly high in some countries, particularly in Germany and Great Britain." But the industry quickly learned from this, and considerably less was spent for the licenses in other countries. But in an age of globalization, a network operator that is active in several countries must form an average of all the license prices in the various countries.

Mathias Plica is sure that the consolidation on the market, which many analysts expect in light of the high UMTS prices, "would have come about anyway, just not as quickly." Plica is convinced that UMTS has a big future ahead of it. "Today we tend to forget that UMTS can make services possible that go far beyond classic mobile phone applications."

In the so-called Cordless Multimedia Office, for instance, entire work teams and office groups could in the future jointly use all the applications offered by today's desktop and telephone - and they could do so cordlessly, both within office buildings and in a mobile way across entire continents.