WASHINGTON, Feb. 17 (UPI) -- U.S. wireless company Cingular's victory over British rival Vodafone in the bidding war for AT&T Wireless could be another lost opportunity to bring the United States into the brave new technological world of 3G, the next step up in wireless.
Vodafone dropped out of the bidding after Cingular upped its bid to $41 billion on Tuesday after Vodafone raised its bid on Sunday.
Last week, Vodafone launched 3G (third-generation) service for corporate networks in major European markets. 3G allows for the fastest data downloads, so big files like pictures or movies can be downloaded quickly. Applications range from using wireless phones to pay for groceries by debiting one's bank account, to downloading songs, to videoconferencing.
For now, Vodafone's 3G service utilizes a card inserted into a laptop which transports data at speeds up to 384kbps, speeds fast enough that users can check e-mail and log on to the Internet. The service will be available in major cities and some major transportation routes in Germany, Italy, the Netherlands, Portugal, Spain, Sweden and the UK over the next four weeks, according to the company.
T-Mobile also launched its 3G coverage in Britain last week. And a Vodafone executive, in an interview with Germany's Focus magazine, said it aims to create smaller, more function-filled 3G capable phones by September or October.
Right now in the U.S., advanced wireless service is neither easy nor cheap to get. Certain areas like campuses, coffeehouses and hotels have gone wireless, which means that laptops can receive and transmit data within the area.
Had Vodafone, the biggest wireless provider in the world, bought AT&T, it might have used the buyout as an opportunity to bring 3G into the United States. Vodafone is a minority shareholder - it owns 45 percent of Verizon -- which would make it harder to convert Verizon users to 3G. But if the company had bought AT&T outright, it could have converted that segment of the market to 3G service. Both companies operate on the same technology platform, GSM.
Vodafone's intention to improve 3G service and phones could also head off a problem Japan's 3G service providers encountered. DoCoMo had a hard time selling the technology until 2003, when 3G suddenly took off after conditions became more favorable for 3G users. Phones became lighter and cheaper, prices went down and batteries lasted longer, according to 3G.com.uk.
In the United Sates -- or anywhere -- with all the extra infrastructure needed for optimal 3G service, including extra towers, providers want to make sure that demand meets the investment. Vodafone's attempts to make 3G more friendly is a step in the direction of increasing consumer demand.
The acquisition makes Cingular the biggest wireless company in the nation with about 43 million customers, with spectrum in 49 states and coverage in 97 of the top 100 markets according to Geekzone.com. This acquisition also reduces the number of providers in what is an about $83 billion industry from six to five - Cingular, Nextel, T-Mobile USA, Sprint and Verizon -- taking pressure off the remaining wireless companies to reduce costs.
