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Vodafone to splurge £100m on 3G launch

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Vodafone is set to roll out its 3G service this week, a £22bn gamble it cannot afford to lose. The company will spend £100m on marketing and advertising to support the launch, a fraction of the amount it forked out for the spectrum licence.

After frenzied bidding in 1999, Vodafone paid £14bn for the right to operate third generation mobile services in various European countries. Since then, it has spent an additional £8bn on infrastructure roll-out and R&D, taking the total investment to over £22bn.

CEO Arun Sarin said the company will announce ten new handsets from six manufacturers later this week. He aims to have 350,000 customers signed up to the service in the next four to five months.

The company is betting on the content deals it has signed with Disney, Sony and the Premier League to give it the edge as all the major operators, except O2, ready their 3G offerings before Christmas. However, details on the scope of the launch are still sketchy, as the company kept details of the pricing structure and network coverage to itself.

The company is trying not to over-hype prospects for the launch, with Sarin aiming most of his efforts at persuading existing customers to upgrade, the Financial Times reports. It also reports concern in the analyst community that a price war could begin with 3 over call charges.

The company certainly has a lot riding on the launch. An unnamed analyst told The Observer this Sunday: "If it doesn't work out, the company is toast." ®

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