Vodafone has introduced 3G services in Europe and Japan - and its handsets make a step to answer the need for all-in-one mobile media devices.

The company expects 3G to begin gaining mass market acceptance next year, and forecasts over ten million customers will be using its Vodafone Live portal with 3G services by March 2006.

The company is presenting 3G as an enhancement to its existing Vodafone Live portal, and is promoting ten new 3G handsets, seven of which are exclusive to Vodafone, and services such as video calling, 3-D (three-dimensional) arcade games, mobile TV and - tellingly - music downloads.

Seven handsets will be available in Japan, with nine available in Europe, Vodafone said. Not all handsets will be available in every country, with about six handsets offered in each of the European countries where the Vodafone Live service is offered: Austria, France, Germany, Greece, Ireland, Italy, the Netherlands, Portugal, Spain, Sweden, Switzerland and the UK.

Vodafone announced that it would begin offering several new 3G mobile phones to customers by the end of the year, including Europe's first 3G 2 megapixel camera phone, from Samsung, Nokia, Sony Ericsson, Sharp, Motorola and NEC.

New price structure leads industry

Vodafone has altered its 3G pricing, users are charged for individual content purchases, rather than according to volume as it had previously done, the company said. Browsing is free or included in a service agreement.

According to Ovum analysts John Delaney and Dario Betti, it is important that Vodafone is also offering a prepay option at launch, in addition to two contract tariffs, as it helps to encourage first-time users to the service. They praised the company's decision to charge users for the content itself, as opposed to paying for the time it takes to find and download the content, which they believe will appeal to users and cause a shake-up in business models.

Vodafone wants new revenue-sharing deals with its content providers, to "partly offset" the lost traffic revenues, Delaney and Betti said in an email assessment of the Vodafone service, and other operators will undoubtedly follow Vodafone's lead.

But the analysts warned that Vodafone's decision to target its coverage area within heavily populated areas may prove to be risky if its 3G services prove insufficiently robust to cover such a large segment upon launch.

If Live 3G offers really compelling services, then people will want to be able to use them wherever they are, Delaney and Betti said. If the services aren't accessible, then Vodafone risks annoying customers they can't afford to annoy, the analysts said.