WCDMA has more than 16 million users worldwide

Users are beginning to show interest in new 3G (third-generation) higher-speed mobile phones after operators, particularly in Europe, spent lavishly to market the new service in the run-up to the crucial holiday buying season.

At the start of this year, more than 16 million people worldwide owned 3G phones based on the WCDMA (Wideband Code Division Multiple Access) standard, according to the UMTS Forum, an industry body. The group counted 10 million users worldwide in September 2004.

WCDMA is the faster-speed, packet-based successor to the second-generation GSM (Global System for Mobile Communications) standard, which dominates the European market and is widely used in Asia and many parts of the Americas.

Most licenses for WCDMA-based networks were awarded between 2000 and 2001, but operators were slow to roll out commercial service because of technical problems -- and money. European operators alone spent more than €100 billion ($133 billion) on licenses shortly before the telecommunications sector experienced one of its largest economic downswings ever.

Europe now accounts for around one-third of the WCDMA users, according to the UMTS Forum. Many European operators launched their 3G networks in the second half of 2004, it said.

More than 60 WCDMA-based networks are up and running, according to the UMTS Forum. And not all of them are in developed countries; Africa has seen the launch of several new 3G networks, it said.

Plenty of handsets are also available; users can now choose among more than 100 phones and PC cards from a variety of vendors, according to the industry group.

This wasn't always the case. Hutchison 3G UK (3 UK), Europe's first commercial 3G operator, delayed a special promotion in the early days of European 3G until it could put its hands on sufficient handsets.

Moreover, early models suffered from a relatively short battery life and bulky size. Peter Erskine, chief executive of officer of the U.K. mobile phone group mmO2 PLC, referred to 3 UK's initial phone as a "brick."

All this is changing.

Users can expect most 3G phones to have sizes and batteries similar to those of GSM phones by the second half of 2005, according to Neil Mawston, senior analyst with Strategy Analytics. A certain amount of time is always necessary to work out the bugs in new technologies, he said.

Pricing is also playing a key role in the strategies of European operators to kick-start 3G. Several operators, including Orange, Vodafone Group, and Hutchison 3G, which operates under the 3 brand, are offering highly subsidized handsets and bundled services consisting of cheap voice minutes, text messages and 3G-specific applications, such as video phone calls.