Vodafone says 3G on track for June 2002

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By Laura Rohde

(IDG) -- U.K.-based Vodafone Group is "on track" to launch 3G (third generation) mobile services in Japan and Europe in June of 2002, the company's Chief Executive Officer Chris Gent said Thursday.

"Next year 3G is very much going to be introduced -- our plans are still on target -- but I don't expect there to be any decent volumes of 3G pick-up by consumers until 2003," Gent said in a telephone conference call.

The purpose for the news conference was for Gent to outline Vodafone's tender offer -- announced earlier in the day -- to take full control of Japan Telecom by purchasing an additional 21.7 percent stake in the company for an expected 1.8 billion pounds (US$2.64 billion). [See "UPDATE2 - Vodafone aims to take control of Japan Telecom," link below]

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Vodafone, the world's largest mobile phone operator, already owns a 45 percent stake in Japan Telecom and a 46 percent stake in Japan Telecom's cellular unit, J-Phone Co. Ltd., Japan's third-largest mobile phone operator. Vodafone is aiming to own a "super majority" stake in both companies -- 66.7 percent of Japan Telecom and 69.7 percent in J-Phone -- by the time its tender offer is completed on Oct. 26, Gent said.

Gent acknowledged that the move is part of Vodafone's desire to make significant inroads in new markets, specifically in Japan, France and the U.S., but added that he doesn't expect the company to make any additional acquisitions in those markets for the rest of the year.

Vodafone's presence in the U.S. consists primarily of its partnership with Verizon Communications Inc., Verizon Wireless Inc., which was formed in 2000.

"We have a good long-term partnership with Verizon and we are making good progress on 3G with them. I don't envision any changes to the existing partnership with Verizon," Gent said.

A number of companies, including J-Phone, NTT DoCoMo Inc. -- Japan's largest cellular telecommunications carrier -- and British Telecommunications PLC (BT) have been forced to push back the launch of services using 3G technologies that were planned for the second half of this year. Other companies that, like Vodafone, have not been planning to launch any 3G services until the second half of 2002 -- including Hutchison Whampoa Ltd. and Orange PLC -- have recently taken pains to assure investors, consumers and industry observers that their plans are still on track.

Gent also stressed that general acceptance of the GPRS (General Packet Radio Service) protocol -- seen by industry analysts and technology companies to be the stepping stone to 3G -- would begin to take off by the end of the year.

"I think you will see being launched next month, a much wider range of GPRS handsets, notably from Nokia (Corp.). We are also planning the launch of GPRS unified messaging and universal messaging which will greatly improve the take-up of GPRS," Gent said.

Gent expects GPRS to be the predominant mobile standard for the next three years, as consumers will be less likely to replace their newly acquired GPRS handsets with 3G ones until all of the kinks in the 3G networks and services are ironed out after launch.