February 14, 2006 6:04 PM PST

Vodafone CEO says 3G handsets must get cheaper

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Many of the kinks that dogged the rollout of 3G are finally being solved--but that doesn't mean the industry doesn't have a ways to go, according to Vodafone CEO Arun Sarin.

Speaking on Tuesday at the 3GSM conference in Barcelona, Spain, Sarin said hardware vendors and operators have overcome many of the issues that affected the debut of 3G--most notably availability of handsets.

"I think there is better alignment between operators and handset manufacturers now than there was two years ago on the subject of 3G," he said. "All of this stuff needs to travel together--that's the experience we're selling. Just selling us equipment doesn't really help us."

Sarin added that handset manufacturers must also make some concessions on price. "There's a $60 difference between 2.5G and 3G handsets," Sarin noted, adding that customers should be "indifferent" to which generation of handset they're buying. According to Forrester Research, 3G will not start to take off in Europe until 2010, thanks in part to the added costs associated with third-generation phones.

However, the much-needed price drops are not so far off, the Vodafone head believes. "When WCDMA 3G comes to China and the market opens up, there will be tremendous reduction in the price of handsets," he said.

Aside from price, complexity is the next barrier to be breached, said Sarin. By that he means complexity of configuration, of operating system or of browser. "I think we have a little way to go--we need to make things simple for customers...There's a whole alphabet soup of difficulty out there."

Jo Best of Silicon.com reported from Barcelona.

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