Raymond Snoddy on media: 3G is great news unless you're paying the bill

The long-awaited formal launch of Vodafone's 3G telephone service is a hugely symbolic moment for the communications industry. It symbolises either the beginning of an exciting new era for mobile communications, or the ease with which one can lose £20bn without really trying.

Even at this early stage, it is possible to identify a handful of cunning winners from the project, led by David Beckham, who is fronting the ad campaign. Beckham promotes products rather better than he plays football, though he still doesn't quite match the style of Thierry Henry - on or off the pitch. But the money will keep rolling in.

With £100m behind the campaign, it is also a great deal for the marketing industry. What's more, Vodafone's courageous optimism about the future of the mobile market is great news for ITN, following its loss of the Channel 5 contract.

The organisation has very cleverly positioned itself as a news and information provider for the mobile segment. After spending more than £22bn on 3G licences, the mobile operators have to keep doubling their commitment if they are going to get any of their original investment back. So whether there is an audience out there or not, there just has to be content - or else.

ITN has just announced the expansion of its multimedia operations with the launch of two services: a television news bulletin service for 3G phones and TV Wow, a service offering entertainment video clips, including the latest news from the soaps.

Great news for all concerned, and a wider range of services will clearly follow. Mobile is clearly going to be big, although, in the short term at least, the biggest thing will be the size of the losses.

Marketing gurus such as Kevin Roberts of Saatchi & Saatchi are already salivating over the prospects 3G will offer marketers to reach consumers directly. You may not want to watch an entire movie or television programme on a tiny mobile screen, but how about, he suggests, an individual performance from Pop Idol, complete with its own ad or sponsorship? You could certainly chop up some programmes into manageable bites.

The problem for Vodafone and the operators that follow it will be cost.

Most of the sophisticated devices are being given away free, and the price of ordinary voice services is in line with the offerings of more ordinary technology. The problems start when you begin to use 3G phones for the purpose they are designed for: downloading video clips. You get a couple of freebies, of course, to get you started. But then each extra clip or music track can cost £1.50. Anyone who jumps into 3G with wild abandon could receive some eye-watering bills at the end of the month.

The young will naturally spend a fortune, until they are stopped. The more mature could cause financial chaos by signing up for the stylish new accoutrements, then using them for downloading once a year on Cup Final day.

Call me old-fashioned if you like, but the achievements of broadband seem much more significant. Who would have thought that subscriptions to broadband would be running at about 100,000 a week, or that the technology should now be restoring the fortunes of BT?

There is even the possibility that within the next five years, dozy old BT will finally get its act together and complete a national broadband network that can transmit everything from movies to sporting events. Work is due to start early next year if the usual squabbles with Ofcom and internal disputes can be resolved.

And at less than £15bn, the network will be a real bargain.


- Hutchison-owned brand 3 was the first UK mobile firm to offer 3G services when it launched in early 2003. It has about 1.2m customers and hopes to reach 2m by the end of the year.

- Vodafone's 3G offer is the first major challenger to 3 and is due to be followed by services from Orange, T-Mobile and O2 over the next few months. Vodafone is aiming to sell 10m 3G receivers by March 2006.

- Vodafone's 3G technology, which builds on its existing Live! service, will enable users to watch movies, sport, TV and music clips, as well as browse the web, play games and download music.

- The Vodafone 3G service, will be available to 60% of the UK population at its launch.

- Backed by a £13m ad campaign that comprises six executions, Vodafone 3G has launched in 13 countries. The ads have been created by J Walter Thompson.


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