Will 3 prove to be the magic number?

Mobile phone executives are a broadminded lot as a rule. After-dinner conversation passes easily between politics and religion. Even sex can be discussed openly and rationally.

Only one topic causes everyone to wriggle in embarrassment, play with the cutlery and stare at the ceiling: third-generation (3G) mobiles.

Understandable really. They paid billions to carve up the future of wireless communications, only to find it may not have a future at all.

Crippled by debt, unable to raise money because of their ever-sliding share prices and facing competition from Wi-Fi hotspots and 2.5G services, it's little wonder they don't want to discuss the matter in public.

The established mobile operators can simply keep their mouths shut, deferring installation and hoping that nobody notices.

But one network is being forced to come out and do it because 3G is its reason for being.

Hutchison Telecom's 3 is slated to go live this month, and it must succeed if 3G isn't to be fatally damaged.

It's not an exaggeration to say that if 3 fails to attract a significant number of subscribers in its first year, the other networks will either scale back their 3G operations or even get out altogether.

3 faces huge challenges. 3G has little to offer ordinary callers except more capacity, so its selling point has to be data. And this is exactly where it faces stiff competition.

The main threat is from the established global system for mobile communications (GSM) networks, with general packet radio services (GPRS) and Edge.

GPRS may not be fast but it's packetised and always-on, so data such as email can trickle over.

Corporate data networks are leaping on GPRS and thin clients as a cost-effective way of linking sales people and field engineers into the virtual private network.

Edge may well bring speeds up to the point where the extra cost of 3G is unjustifiable.

The other big rival is Wi-Fi or 802.11. It's faster and cheaper, and enthusiasts have a vision of a patchwork of hotspots so dense there won't be anywhere you won't be able to get a connection ... and 3G will die.

But we've seen this idea before.

Wi-Fi is horribly reminiscent of PhonePoint, which aimed to install wireless base stations at sweet shops and Little Chefs across the UK.

Subscribers would have cordless phones they could use for outgoing calls wherever they saw the sign of their operator.

But people didn't see the point of carrying a phone around that couldn't receive calls and that forced you to hunt down a base station whenever you wanted to ring someone up.

Plus, calls were dearer than using a phone box. PhonePoint was a big fat failure.

Interestingly, the company that today boasts the highest concentration of executives who lived through the PhonePoint fiasco is ... 3.

Top dog Colin Tucker was director of GPT's Telepoint network, and Hutchison Whampoa owned Rabbit, which lost an estimated £10m.

They have learned the lessons, though. Any communications system must have universal coverage (3 handsets will work on regular GSM to provide this when outside 3G range), and voice calls must be no more expensive than the competition.

But 3G has a secret weapon that nobody in the industry talks about either: porn.

Unlike the computer in the office or the TV at home, mobiles are personal and can be used in private places where there's no risk of being interrupted by colleagues or 'significant others'. And it's interactive.

The major driver behind the internet was porn because it eliminated the plain brown parcel. I predict that filth will drive 3G in much the same way.

chrispartridge@btclick