Speaking at a conference on industry developments expected to emerge over the next five years, Rajeev Gupta said despite the 3G hype, many consumers may find that 2G-and so-called 2.5G-will satisfy most of their needs, and at at lower costs.

If Mr Gupta's predictions prove accurate, it would be bad news for the telecommunications companies that have poured billions of dollars into acquiring coveted 3G licenses, particularly in Europe. The UK government raised $35.5 billion auctioning five 3G licenses, while the German government raised 51 billion euros ($44.75 billion) in its 3G auction. For the companies, the license fees are only the beginning of the expenses, as the winners of the 3G licenses must invest far more again to roll out the new technology.

Mr Gupta said the earlier generations of mobile-phone services may lack features available through 3G spectrum, but the 2G and 2.5G have three key advantages: users, applications and global-Internet interoperability. As a result, he expects that earlier-generation services may remain in wide use, despite the massive marketing campaigns expected in the coming years as companies bid to persuade consumers to migrate to 3G.

The prime reason the earlier services will be able to retain users is a price advantage, as the operators of those technologies won't be hindered by huge bills for spectrum licenses and network build-up, Mr Gupta said. Mr Gupta said he expects markets including Japan, Korea and Scandinavia will embrace 3G more enthusiastically than others, particularly the US.

Mr Gupta predicts the personal computer won't be replaced by wireless-data services over the next five years, as is widely expected. Again, price will play a key role in the trend because consumers pay for wireless services at a metered rate, but PC use at home and in the office can be tapped at a fixed rate, Mr Gupta said.

Because consumers won't rely entirely on wireless services as their main means of accessing the Internet, they are likely to be satisfied with slower wireless services, which will probably delay their adoption of 3G phones, he added.

If Mr Gupta's forecasts turn out to be true, the telecommunications firms that lost in past and future 3G auctions may prove actually to be the winners, well poised to move into the next generation of services, the "4G" market.

Mr Gupta also projects that broadband access to the Internet may expand at a much slow pace than expected. Instead of seeing ubiquitous use of broadband by 2005, he predicts many households will still be using dial-up services five years from now. Broadband networks are more complicated and costly to install, while competition from other high-speed platforms will also slow growth, he said. Broadband may also prove less lucrative for operators than expected, he added. As a result, providers may curb spending on efforts to attract more subscribers.

Mr Gupta predicts broadband will eventually become a moneymaker with 60% penetration by 2010. In the meantime, the biggest winners will be companies that offer both narrow and broadband services.

(The Asian Wall Street Journal)