3G (short for third-generation technology) allows mobile phone users to download information, exchange email, enjoy music and movies, shop, and send instant messaging all from their cell phones. In addition to making telephone calls, of course. It created such a big buzz with its video telephony feature that many European companies spent billions of dollars to purchase huge licensing fees. Berlin European mobile phone companies for instance coughed up $129 billions for 3G licenses.

The scenario of a 3G world was everyone on the planet (or at least in places where 3G is available) is connected to each other through the mobile phone. Today, despite all the services available, cell phones are still used mainly for making calls. Analysts think the 3G has the potential to become the Edsel, the car nobody wanted, of the mobile phone industry.

Only 5.4% of nearly 720 million cellphone connections in Eastern and Western Europe at the end of June were 3G, says Wireless Intelligence, a joint venture of the GSM Association and the market researcher Ovum based in London. Worse, the technology is facing stiff competition from other forms of cheaper high-speed data services such as digital mobile broadcasting and WiMax.

Despite 3G's near-fatal start and high costs, it has not lost all its fans. Operators and executives say the technology is here to stay with most GSM networks being refitted to 3G standards to carry the bulk of the voice traffic. According to the GSM Association, by the end of 2007, the number of people using 3G networks will go up to 111.1 million from 62.8 million. GSM's own performance in Germany started with a dismal 10% market penetration but increased by 80% within years. They say 3G's rise in popularity will be similar because "That is how this business works."