FALSE PROFITS

Orange PLC and Tele2 AB were the latest European operators to follow Telefonica and Sonera in sounding the retreat from mobile 3G services. The companies asked regulators to delay rollouts in Germany, Norway and Sweden. Infrastructure spending there as well as in the U.S. has ground to a halt. But there is more at work here than meets the eye. These operators aren't just feeling the financial pressures of over-investing in spectrum licenses and unproven technology. Could it be that they also relied too heavily on faulty market research? Did overseas operators fall victim to misinformation because they wanted so badly to get a jump on the U.S.? Was the U.S. market behind it all? Did we consciously push European operators to the brink of bankruptcy with a 3G arms race the same way we did the USSR? We should have seen it all along. Who needs a voice-activated, location-based, high-speed wireless telephone/PDA/Gameboy in such a noisy, security conscious, work-addicted society anyway? What's missing in the newfound quest for accountability in the business community — and especially telecom — is an examination of all those market forecasters who predicted widespread adoption of 3G devices and services. Maybe there simply is no demand. Maybe there never was. Maybe someone should answer for that. Maybe when we're through slapping accountants on the wrist and scolding high-profile CEOs, when we've done enough perp walks to satisfy Wall Street and the public, we should dig into the market researchers.Copyright 2001 by Intertec Publishing Corporation, A PRIMEDIA Company. All rights reserved.