Finns Head for Limp Launch

The interpretation of "commercial launch" will be stretched to its limits in Finland this September. Homegrown mobile talents Sonera Corp. (Nasdaq: SNRA) and Nokia Corp. (NYSE: NOK) are sticking to their timetable for a joint 3G jamboree, despite indications that the occasion will be little more than a photo op.

The two Finnish companies decided earlier this year to combine their respective launches – Nokia's 3G handsets and Sonera's commercial UMTS services – on September 26. But Europe's mobile operators are still in the thick of handset interoperability testing, and Nokia is now looking at 2003 for volume 3G handset shipments (see Nokia Profits, Margins Up).

"I doubt you will be able to buy any handsets or 3G services in the shops on September 26," Bengt Nordström, president of Swedish consultancy Northstream, tells Unstrung. The launch "will have some window dressing, and there will be some value for both Nokia and Sonera in this. But the real issue is: when will there be a proper commercial launch? For that you need phones in the shops, services and roaming. That will not be until 2003 or 2004," says Nordström.

He adds that Northstream has been testing NTT DoCoMo's 3G FOMA service at its office in Japan, and although "the data throughput is very impressive, there are some serious challenges, such as battery life, which is very short. As a result, customers are choosing 2.5G services. The question that needs to be asked [about upcoming 3G launches in Europe] is whether there will be anything for the customer that is more interesting than [the services and handsets available] with 2.5G? Just because 3G exists doesn't mean it will impress [mobile customers]," states Nordström.

The Finnish companies, meanwhile, are keeping their plans to themselves. "September 26 is still the date of the launch, but there are no further details," says a Sonera spokeswoman. And they mean no details: "I don't know if we have any estimations [about the number of handsets that will be available]," she says, adding that the services to be launched and the location(s) for service are not known.

Can the staff at Nokia enlighten us? Of course not. "That is the date of the Nokia 3G handset launch. The idea is for Nokia and Sonera to showcase what 3G has to offer," says Pekka Isosomppi at Nokia's mobile phones division. He confirms there are no other details and says a venue cannot be revealed, as the companies "have not yet sent out their invitations." We look forward to receiving ours.

What about the 3G handsets? Will they be available in large volumes? "Bear in mind that one bird does not make a summer," replies Isosomppi poetically. "It depends on the plan of the operator and the other manufacturers involved." Right. It seems, then, that the upcoming lack of 3G handsets in any significant volume will be due to the unreadiness of the market, rather than Nokia's inability to deliver. The company already said so in last week's financial results release: "Depending on operator schedules in WCDMA networks, we expect the 3G business system to be mature enough for commercial handset shipments by early 2003."

Isosomppi bangs this point home: "2003 will be the year for 3G services and for networks to open [Ed: Don't forget about Sonera, Pekka!]. I think MMS will proliferate in 2002 and this will pave the way for 3G to be more meaningful." Nokia is looking to add revenues from MMS-enabled phones, which are available in the shops, in the second half of this year.

Can we expect Nokia to be delivering any number – even a very low number – of 3G phones to any other operators before 2003 comes banging at our doors? "There are no public announcements, but it is fair to say that will be the case," is as close as Isosomppi would come to saying "Yes."

— Ray Le Maistre, European Editor, Unstrung
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