Analyst: RIP 3G--cut your losses now

A leading analyst house is urging mobile operators to abandon their plans for third-generation (3G) networks.

In a note entitled 'Death bell tolls--3G RIP', Datamonitor analyst Nick Greenway writes: "Within the next 12 months some license holders may shelve 3G aspirations, possibly having to treat the cost of licenses as a write-down." He urges: "Give it away now - there's more sense in abandoning the market altogether than rolling out a service on top of giant sunk costs."

Greenway's argument is based on likely return on investment (ROI) for license holders and the business viability of companies that will supply them, from big network equipment and handset makers to small content producers struggling for funding and contracts. He told silicon.com: "I'm annoyed people are pussy-footing around. Now is not a time for banks and VCs to be delusional. People talk about an ROI 'sweet spot' of three to eight years but one-and-a-half to two years is what any decent VC would want. There will have to be debt restructuring."

News source: ZDNet