Alert on 3G

Everybody is used to take Japan or S. Korea as an example in mobile penetration and business. News from S. Korea, however, are not good for 3G: more and more 3G customers are abandoning 3G for 2G. 2200 3G users returned their 3G phones to use back 2G in April, and almost 2500 in the first two weeks in May. Deceived users do not found attractive and/or useful 3G services. 2G is enough! seems the leitmotiv. If confirmed, mobile operators that have heavily invested in 3G licenses and networks should have problems mid-term.

CCID Consulting is less focused, but warned 3G will need time to be profitable in Europe. It agreed the market demand for 3G services is still insufficient (currently 6%), when about 35% is needed for break-even. The 3G services market is gradually emerging in Europe, however, and typically there has been a big rise in the use of 3G data services in Europe. Nevertheless the fact that Hutchison 3 (the pioneer and the largest 3G operator in Europe) has been for sale reflects that Europe's 3G services market has yet to fully enter a stage of healthy development.