mm02 delays 3G investment - analysts applaud

NEWS mm02 is wise to delay part of its investment in 3G until all the necessary technology and services are widely available, according to analysts. mm02 is withholding £700m from its original network upgrade fund of £3.3bn until it becomes clear when the service will be commercially sustainable. Bernt Ostergaard, telecommunications analyst at research firm Giga Web, said lowered spending on 3G is being seen across the telecoms board in Europe. Ostergaard said: "mm02's decision to delay a large part of its 3G plans is a sound, common sense thing to do. The euphoria of a fast roll-out of 3G is being replaced by a return on investment attitude." He added: "At Giga we have always said we're not going to see commercial 3G until 2004." Mark James, analyst at Nomura, agreed with Ostergaard. He said: "This delay is no surprise. The capital expenditure mm02 gave at the time of its de-merger from BT was high. As mm02 approaches its year end, it's coming up with a more realistic expectation." mm02 will sit on its cash until the period ending March 2003 when it will review its expenditure.