SINGAPORE: Singapore Telecommunications Ltd announced last week it had postponed consumer trials of third-generation (3G) mobile services, joining other wireless operators hit by problems with phones for the new technology.

SingTel blamed "handset issues" for its decision to scrap a plan, for one month, for free consumer trials.

Company officials declined to elaborate.

Mobile operators worldwide are blaming a shortage of handsets - from companies such as Japan's NEC Corp and Motorola Inc - for delayed launches and disappointing subscriber numbers.

Hutchison Whampoa Ltd, for example, has blamed slow delivery of phones for delaying the launch of its 3G services in Hong Kong.

"Handset shortages are not a problem unique to Hutchison. It plagues everybody," said Foong King Yew, telecoms analyst with research outfit Gartner Group.

"The shortages are due to technical issues like backward compatibility with 2G, which need a lot of testing. There are also glitches and stability and coverage problems that need to be ironed out. The technology is not quite ready."

The scrapped trial could force SingTel, Southeast Asia's largest phone company, to delay the start of limited commercial 3G services, which are scheduled for the first quarter, said Daiwa Institute of Research analyst Brenda Lee.

"The fact SingTel revealed there was a delay in the customer trial shows it is indirectly telling the market 3G services could be postponed," she said.

SingTel spokeswoman Andrienne Tho said the company is looking for an alternative date to begin trials.

"This will allow us to resolve some issues with the 3G handsets," she added.

She declined to say if it will delay the launch of the commercial service, which is planned for a central business district and three business parks.

The company has refused to identify its 3G phone suppliers, but Sony Ericsson has said SingTel tested its 3G model.

Analysts say other vendors could include NEC, Motorola and Finland's Nokia.

The technology, which promises high-speed Internet services and videoconferencing, has been slow to take off in Japan and Europe, despite massive investments.

Analysts blame limited coverage, software glitches, the high price of handsets and poor battery life.

"I'm not optimistic 3G can contribute very much to SingTel in the near term anyway, as the experiences of 3G around the world have not been fantastic," said DBS Vickers Securities analyst Himanshu Chaturvedi.

"Any minor delay in the roll-out of 3G services is not expected to be very consequential to its earnings," he said.

Singtel's stock jumped nearly 60 per cent in 2003.

SingTel, the market leader in the city state with 1.5 million mobile subscribers, said in September it was unsure if the public would embrace 3G technology.

The company has said it expects the service to contribute significantly to sales only three to five years after its launch.

Singapore's telecoms regulator requires the island's three mobile operators to roll out nationwide 3G services by end-2004.

Agencies via Xinhua

(Business Weekly 01/13/2004 page1)