The Czech unit of Vodafone Group said it has stopped plans to launch its third-generation UMTS technology, citing excessive costs.

"We've decided to cancel the planned launch of the UMTS network because the costs to build it are too high and services it offers to our customers don't generate sufficient interest," said Jakub Hrabovsky.

Vodafone is the number-three cellular operator on the Czech market, behind Czech units of Spain's Telefonica and Germany's T-Mobile International. Almost all 10 million Czechs use mobile phones at present.

Telefonica and T-Mobile already offer limited UMTS services in the Czech Republic. Vodafone had planned to launch the service later this year or early 2007. UMTS stands for universal mobile telecommunications system, commonly known as third generation, or 3G.

Hrabovsky said the company has made "only small investments" in the actual building of its UMTS network but spent 2 billion koruna ($1=CZK22.8) for the license.
Vodafone bought its UMTS license from the Czech state in 2005 and agreed to launch the service by 2008.

Czech units of Telefonica and T-Mobile each paid CZK3.9 billion for their UMTS licenses.

Hrabovsky said that Vodafone will explore other technologies, including Digital Video Broadcasting-Handheld or DVB-H, which allows television broadcasting streaming into certain types of cellular handsets