Price could drive holiday sales of 3G phones

Christmas could be a crucial turning point for 3G (third-generation) high-speed mobile phone services in Europe.

Around this time last year, only a handful of 3G operators offered commercial service. Handsets felt and looked like bricks, and their batteries seemed to drain faster than the kitchen sink.

This year, many new 3G networks are online, form factors are noticeably smaller and battery life has improved.

So why would anyone want to buy a 3G phone this Christmas? If you think it's size or energy efficiency, or even all those fancy new services, such as video telephony, video streaming and faster-speed downloading, guess again. The answer, judging by some of the recent consumer product launches, is price.

Several European 3G operators, including Orange SA, Vodafone Group PLC and Hutchison 3G UK Ltd., which operates under the 3 brand, are offering highly subsidized handsets and bundled services consisting of cheap voice minutes, text messages and 3G-specific applications, such as video phone calls.

On Monday, U.K. subsidiary Orange Personal Communications Services Ltd. unveiled new 3G handsets and services targeting British consumers.

One of the packages is a

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