Cell Phone Problems Delay 3G Launches

It was once amusing for speakers at wireless conferences to underscore the reliability of mobile phones by asking audience members: When was the last time you had to reboot you cell phone?

It was once amusing for speakers at wireless conferences to underscore the reliability of mobile phones by asking audience members: When was the last time you had to reboot you cell phone? The answer, of course, was never.

That joke isnt funny anymore. Software glitches on new wireless handsets have led to recalls by NTT DoCoMo in Japan of Matsushita Electric Industrial and Sony Java-enabled phones, as well as problems with a line of Nokia phones in the U.S. Software is also to blame for delays in commercial introductions of third-generation (3G) networks by NTT DoCoMo in Japan and British Telecommunications on the Isle of Man, off the coast of England.

Wireless leaders are concerned that users are already fed up with overly hyped wireless Internet services that havent met expectations. Recent additional handset hang-ups may dissuade potential customers from trying future mobile data services — the same services for which operators in Europe spent billions of dollars on licenses to launch.

A combination of pressure on operators to quickly introduce services to start paying for those licenses, and the challenges associated with building technologically advanced networks, is causing many of the glitches.

In late April, NTT DoCoMo said it would delay its planned May commercial launch of 3G until October. BT last week said it would delay by about three months the launch of a 3G network on the Isle of Man, where it was going to start its deployment. Both companies, racing to be first to market, are using equipment from NEC, the only supplier that currently has both network infrastructure and handsets available.

The operators encountered problems in tests on the commercial networks, as calls dropped when users moved from one cell site to another.

In Europe, where pride over global leadership in the mobile phone sector tends to be high, speculation is running rampant over the delays. Experts said NTT DoCoMo, with a larger equipment order than BT for the Isle of Man, has more clout with NEC and has persuaded NEC to drag its feet fixing the problem for BT. That way, NTT DoCoMo can be the first to roll out a 3G network.

Its more likely that vendors and operators are struggling with implementing a totally new technology. "The set of things they need to understand is a revolution for network operators," said Eric Kintz, associate partner at Roland Berger Strategy Consultants. "They need to adapt to a new world, and that wont happen overnight."

Even as operators are promoting 3G services, they are being extremely cautious to introduce them without fault.

"Wireless networks are obviously complex, and what were really seeing is operators making sure everything is just so before they launch," said Alan Hadden, president of the Global Mobile Suppliers Association, a group of suppliers of global system for mobile communication (GSM) equipment.

But no matter how careful operators are, they will be limited by the availability, quality and price of handsets. Phones have historically held up the progress of mobile networks. "The first GSM networks were vastly overbuilt compared to handsets that were out there," said Robin Hearn, senior analyst at British consultancy Ovum. "There were a lot of handsets around, but they were all rubbish."

The Strategis Group recently conducted a study and found that most leading vendors wont have 3G handsets available commercially until the end of 2002 — and some not until 2003.

Even before the widespread availability of many 3G phones, current handsets are beginning to experience problems as they handle todays limited data applications.

Nokia recently had a software problem in handsets it sold to Verizon Wireless. After the phones hit the market, it was discovered they wouldnt operate on next-generation networks as designed. Nokia is working on a software fix that can be installed in the network, so the phones will operate properly.

Ericsson also recently had a handset hang-up that, due to a manufacturing error, offered less battery life on the phone than intended.

Some industry observers arent sure that customers will have the patience to wait for quality handsets.

"People are patient with their computer because they cant do anything else — they have to have e-mail to work," Kintz said. "With wireless, if it doesnt work, theyll go back to their PC."