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Handset shortages delay Vodafone 3G rollout

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Vodafone is to sell dual mode 3G handsets in Japan only this year, citing shortages, according to the FT,

This means that Vodafone will not begin selling 3G phones in Europe until 2003 - previously it said it would start marketing the service in the second half of this year.

The news is no great surprise: everyone - bar new network operator Hutchison 3G, which insists it will have enough handsets for launch - has noted the lack of hardware. European operator mmO2 said as long ago as December last year, that it was delaying its 3G services until 2003, because there would not be enough dual-modes around.

And when the handsets do come onto the market, they will cost an arm, a leg and a severed head - at least £400 (approx. $600) for the most basic models. The network operators may be disinclined to subsidise their purchase too heavily.

And those that are on the market, or at least, in trials, appear to be bug-prone. Hutchison last month confirmed that its dual-mode handsets were dropping calls, a glitch that would not be fixed for six months.

Hutchison 3G is pressing ahead with live trials for its service in October, with 10,000 participants in the UK and Italy.

After all the expense of getting the licenses and building the 3G networks, running costs may be cheaper than their first generation counterparts. 3G networks can squeeze between five and seven times more voice calls than older networks. This may in due course give 3G-only players, such as Hutchison, a cost advantage, as FT's Lex pointed out yesterday.

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