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Hutchison and Nokia, sitting in a tree

2002 will be year of 3G - whether we want it or not

Hutchison 3G, the telco that used to own Orange, has bagged £3.6bn of backing for the launch of third generation mobile services in the UK, slated to arrive in the middle of next year.

The financial support is expected to come from a consortium of banks and will put the underdog at the forefront of the 3G revolution.

The cost of introducing the 3G networks to the UK is expected to be at least £4bn, and banks could face a Channel Tunnel-style fiasco where the more money they loan, the less likely they are to get it back if things go wrong.

Several key industry figures have already criticised 3G, calling it a white elephant. BT's ex-future strategist Prof. Peter Cochrane said recently that 3G mobile may never recoup its outlays.

Nokia, Siemens and NEC are expected to share equipment and installation costs with Hutchison.

"We are in talks with other operators about how to share the costs of the 3G rollout," said a spokesperson for Siemens. "It is probable that operators will share masts and other such facilities to cut back on some of the expense."

One2One raised the price of its prepay mobile packages last month by a massive 40 percent, quite possibly to guarantee income to recover 3G costs. Vodafone also announced a price hike on prepay services to start from 1 May.

Orange is expected to announce a similar increase to the price of its pay-as-you-go packages this week.


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