After four years of massive investment, 3G carriers around the world are under pressure to find users. That pressure comes from investors and competing technologies. Qualcomm senior vice-president Jeff Belk last week dismissed Wi-fi as 'unbridled hype', but most of the world's major telecoms companies are building Wi-fi networks, and the standard is finding its way into some new phones. WiMAX, too, could become a contender. But most threatening is the continued growth of the technologies often described as 2.5 or even 2.75g - Edge, GPRS and Qualcomm's CDMA2000.

I tested the NEC c616 3G phone recently and was surprised at how unimpressive it was. The c616 is bulky and heavy, the camera is low resolution, Web browsing rarely worked and it offers just 19 megabytes of memory.

In short, it looks like an outdated poor cousin of today's feature-rich 2G handsets.

Worse still, the phone crashed during video conferences, and both services and coverage are as poor as one would expect from such a young technology.

All this will give users a poor impression of the much-hyped third-generation telecoms revolution.

Meanwhile, at the CeBIT trade show in Hanover, 3G handsets were a mere side dish to the banquet of second-generation delicacies on offer. Mobile operators have long complained that poor handset design has hobbled their data services business. Rival firms have sold incompatible versions of Bluetooth, different image formats and bad software. But that is changing.

New phones from Sony-Ericsson, Nokia and Motorola offer a range of features that promise to realise the potential of data services. Megapixel cameras and better compatibility mean multimedia messaging, mobile banking and personal area networking could actually take off. CSL has just launched the BlackBerry messaging device, which uses GPRS. Nokia's new Lifeblog software automatically stores photographs, videos and text messages in a desktop diary. Oracle's Collaboration Suite and Fujitsu's mProcess business automation software both work on GPRS phones. All of these work without the need for multi-megabit download speeds.

Last week, I spoke to senior executives at SmarTone, Hong Kong CSL and Nokia. All had clear interests in boosting 3G, but none were prepared to. While SmarTone and CSL are due to launch 3G services this year, Nokia has just unveiled its first 3G handset.

For Hutchison's future 3G rivals, the heavy subsidy that Hutch is giving to new subscribers is a reminder of the voice wars of the past. While our mobile networks are now among the cheapest in the world, the low cost makes it harder for carriers to make a living and finance network enhancements. While the carriers had hoped to make up the difference in data services, users are so accustomed to low bills that data services seem comparatively expensive. Markets in Japan and South Korea, where data has thrived, have grown because data, not voice, is cheap.

Both Hubert Ng, chief executive of CSL, and Stephen Chau, chief technology officer at SmarTone, believe Hong Kong's data services business has been seriously harmed by the low cost of voice. They say Hutchison's subsidies came at a particularly bad time. Just as phone vendors have begun to produce the 2G handsets that carriers want, users are being sold an immature technology that could discourage data usage, just as the embarrassment of Wap did five years ago.

Feature-rich, quad-band phones, which will become standard over the next two years. Users need not even know whether they are using a second- or third-generation network, only that they have a consistent and reliable service. By the time 3G networks and global roaming services are mature, the services will be ready.

There is no question that 3G will take off in time, but Hong Kong's mobile carriers must start competing on service quality instead of price. If price remains the only differentiator, then carriers will carry on living off roaming fees and all those 3G investments will have been a waste of time.