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.

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