Irish consumers may not be able to sign up for third-generation mobile (3G) services for up to a year despite the start of trials yesterday by Hutchison Ireland.
The firm, which is a subsidiary of the Hong-Kong conglomerate Hutchison Whampoa, said it would not be in a position to offer a full consumer 3G mobile phone service until late 2004 because of a shortage of handsets and limited network coverage.
Hutchison Ireland, whose sister companies in Britain and Italy are already offering 3G services to consumers, also revealed that its network was live in parts of Dublin and it was offering services to a few business customers.
But the slow roll out of 3G - a technology that beams video and multimedia signals to mobile phones - will disappoint the telecoms regulator and the Government.
It was hoped at the time of the licence award to Hutchison Ireland in June 2002 that some sort of consumer 3G service would be in place by January, 2004. The 3G services would then provide a new method of delivering broadband internet to rural communities and mark out the Republic as a technology leader in Europe.
But technical glitches and the huge cost of building 3G mobile networks has slowed the introduction of the technology.
A Hutchison spokesman said yesterday a full Irish consumer 3G service would not be available until late 2004, although some services may be available in the Dublin area in about six months.
O2 and Vodafone have not yet launched a single consumer 3G service in Europe and their Irish subsidiaries continue to be coy about their own launch plans.
An O2 spokeswoman said yesterday trials would commence in early 2004 among a small number of corporate customers, but it did not envisage that 3G would be available until later in 2004.
Similarly, Vodafone Ireland - which recently set up a trial of 3G services with some of its business customers - has not yet given a specific consumer launch date.
It is believed all the Irish 3G licensees have agreed service roll out deadlines with the regulator. However, so far the Commission for Communications Regulation (ComReg) has refused to publish the commitments.
The slower-than-expected launch of Hutchison Ireland's 3G services could make it difficult for the firm to make headway in the Irish market. Meteor's slow progress in the Irish market demonstrates that new entrants often find it difficult to build market share in mature mobile markets.
Hutchison Ireland may also face tough competition from Eircom if it decides to enter the market in May, the date when its non-compete clause expires with Vodafone following the sale of Eircell.
The cost of setting up a 3G service, and the unproven nature of the technology, could also cause the firm problems. Last month, Hutchison Whampoa booked a $500 million (€431 million) charge in the first half of 2003 to cover the cost of launching its "3" service in Italy and Britain. Despite this year-long headstart, the firm at least initially has struggled to make an impact in the market.
Hutchison Ireland has contracted Esat BT to manage the building of its 3G telecoms network in a deal estimated to be worth at least €100 million. It expects to sign a national roaming agreement with a rival operator to give it State-wide coverage for mobile voice calls.
