Vodafone courts businesses with 3G offerings

Vodafone Group is entering the 3G arena with a service aimed at business laptop users.

Vodafone Group is entering the 3G arena with a service aimed at business laptop users in Germany and Italy.

The service provides a 3G card to corporate laptop users, allowing them to send e-mail at faster than GPRS rates, beyond the limited coverage of Wi-Fi hotspots.

Vodafone's reasoning for staying out of the 3G mobile phone market is that 3G handsets are bulky and unreliable, and videophone calls tend to break off when the user is on the move. It has hinted that there it will launch a voice service handsets in due course, but for now is offering something comparable to Wi-Fi hotspot services, but with greater coverage.

Vodafone's choice of Germany and Italy for launch could be provocative. Hutchison 3G has its other European arm in Italy, and in Germany, Vodafone is using a 3G service to compete with Wi-Fi hotspots in the home territory of T-Mobile, the largest owner of Wi-Fi hotspots in the world. T-Mobile owns a 3G licence for Germany, but has postponed launching a 3G service there, until 2004 at least.

"Mobile operators are in a good position to exploit Wlan hotspots, since they have a big base of mobile customers,"  said Alastair Brydon of Sound Partners Research.

T-Mobile is not a soft touch, however, it could build out hotspots to keep control of the mobile e-mail market, and then move customers across to a cellular service on 3G network.

In the UK, Vodafone is already offering a Wi-Fi service using the hotspots of potential rival BT Group's OpenZone.

Meanwhile Hutchison 3G is expected to relaunch its 3 service in the first half of 2004, with some changes, targeting consumers rather than business people. The most often trailed addition is the inclusion of a pay-as-you-go service, a large gap in the 3 portfolio.

"It will be interesting to see what happens over the next year, as 3 responds to the market and the incumbent players launching other services," said Brydon.

At the weekend  3 announced that it has 210,000 customers, falling far short of the million it was hoping to have by the end of this year.

The reason for low take-up has been blamed on a shortage of handsets.

Peter Judge writes for Techworld.com

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