Vodafone Goes Live! With 3G
By Carlo Longino, Wed Nov 10 22:15:00 GMT 2004

The carrier launches its 3G service in a dozen European countries as an extension of its Live! content portal.

There's nothing too surprising in today's announcement, which delivers pretty much what the operator revealed when it detailed its launch strategy back in September. There seems to be a sense that this is the first real litmus test for European 3G, with some observers giving the doomsday analysis that Vodafone will fail if it can't make 3G "work".

But are things really that dire? Vodafone says it sees 2G Live! users generating 7% higher ARPU than non-live users, and it hopes to see a similar bump from 3G users, which is a pretty conservative target. It's also important to remember that 3G is about more than just video calling and fast downloads -- it also offers carriers increased voice capacity, something that will become increasingly important as markets saturate. So to say the company has spent $30 billion or more just for football highlights and Robbie Williams videos isn't totally fair.

Having said that, though, Vodafone is betting on content in a big way. The two price plans it's announced for contract users in the UK are cheaper than current 2G plans, so presumably it's hoping to make up the difference with more ringtones and games. It's shifted to event-based pricing, which is emerging as the norm for 3G content, with "free browsing" -- while this is great for consumers to figure out just what all this new hotness is costing them, it raises questions that Vodafone might be following the misstep of 3 by walling off its customers from outside sites.

It's also quite possible that the key driver, at least initially, for Vodafone's 3G effort won't be the content at all, but the handsets. The company's leadership has harped on for years about how the real holdup to its 3G plans wasn't the network, but rather the lack of handsets, and furthermore, the lack of decent handsets (a look at the lineup 3 had for its launch makes that point pretty clear). The 10 devices the company's procured for its launch are all flashy and packed with features, and it's likely no coincidence it's getting them out before Christmas shopping season starts in earnest.