Japan's J-Phone has become the first Vodafone Group unit to start a commercial third-generation (3G) mobile phone service, bringing Europe's largest wireless operator fresh growth potential.
Although 3G isn't expected to ring up huge revenues for Vodafone in the short term, the launch is seen as an indicator of things to come, analysts said.
"The rest of the Vodafone group views Japan as a crystal ball for wireless services," said Mr Bruce Kirk, equity research director for KBC Securities in Tokyo.
Much is at stake for what was once billed as the biggest gamble on an untried technology in corporate history.
European mobile operators have spent more than euro100 billion on European 3G licences - only to see shares collapse amid investor concerns about rising debts, a slowing global economy and technology delays.
But the wireless industry is betting that advanced 3G services, such as transmission of video clips and quick Internet access, will offset declining revenue from voice communications.
Vodafone has said it is aiming for service income from non-voice sources to rise to 20 per cent by 2004 from the current 14.3 per cent.
J-Phone's twice-delayed 3G service is unlikely to lure large numbers of tech-savvy Japanese users in the initial phase, analysts said, because mobile Internet and the company's hugely popular camera phone service will not be available on the 3G platform until next summer.
AFP