O2 would not comment on the launch of 'O2 Broadband' as it is preparing a massive marketing splurge this week.

Last November, chief competitor Vodafone quietly switched on its broadband service offering subscribers high-speed internet access on the move using a small HSDPA modem; essentially a 3G sim card that plugs into a PC or Mac via its USB port. Three brought the same product to market in May.

The latest O2 service is accessed via a Chinese-made Huawei modem identical to Vodafone's and Three's model and will operate at download speeds of up to 3.6Mb per second with a data cap of 10Gb per month. Industry sources say O2 will charge 15 per month as a promotional offer and it's understood existing O2 bill-pay and SME customers are likely to receive an incentive to take up the broadband product. The monthly charge will increase to 30 per month after the three month promotional period.

Judging by competitors' prices the once-off cost of the modem will range between 100 and 129. It's not yet clear whether O2 broadband customers will be tied into a voice package if they purchase an O2 modem.

A spokeswoman for Three said the company would adjust its broadband prices . . . starting from 20 per month . . .

if it felt it necessary in the wake of increased competition. Vodafone cut its price late last week from 40 to 15 per month as a three month promotion, and will charge 30 thereafter.

A Vodafone spokeswoman said the move was in response to "an increasingly competitive market where we're trying to offer the most competitive product to our customers".

Meanwhile Eircom's mobile subsidiary Meteor, which owns Ireland's fourth 3G licence, said it was "well on track" to fulfil its regulatory compliance targets of 3G coverage for 10% of the country by October. A spokeswoman would neither confirm nor deny Meteor had plans to launch a mobile broadband offering later this year, and industry observers will be watching closely to see how Meteor either competes with or complements Eircom's fixed line broadband products.

MIKE CANSFIELD, principle telecommunications analyst at Ovum, believes O2 Ireland will have to concentrate on its marketing strategy as it enters the broadband market later than its chief rivals.

"Usually telecommunications companies contrast on price, and although this is still the prevailing differentiator O2 ought to be looking at other ways of developing the brand loyalty for customers, " he said. Cansfield pointed out that O2 in Britain has location-based sponsorship deals, such as O2 branding of the Millennium Dome in London, and O2 subscribers receive a discount on tickets for sporting or music events held there. "I'd expect something similar in Ireland, " he said.

Meanwhile, Pyramid Research predicts a slowdown in capital expenditure by mobile network operators during 2007 after doubledigit growth in 2005 and 2006 to pay for mobile broadband network infrastructure.

"We are seeing a trend toward subsiding Capex levels, even in some developing markets, " says Pyramid report author Daniel Locke.

"In mature markets, many operators have completed the bulk of their 3G investments and are focused on less costly investments such as software, applications, and minimal hardware upgrades to support rising mobile data traffic."

The elephant in the corner of course is Apple's iPhone, expected to reach Europe by autumn, and unlike US consumers European mobile fans will are well used to 3G connectivity, although the first edition of the iPhone is not 3G-enabled.

Berg Insight predicts five million Europeans will be connected on a mobile broadband plan by year end, and the 3G broadband market will be worth 3bn by 2012.

ComReg welcomed O2's plans : "The number of 3G broadband products in the Irish market is growing, and we welcome additional providers increasing competition and improving consumer choice."