Third generation mobile phone technology will encounter major stumbling blocks in the UK and rest of Europe, according to a report by analyst firm Forrester.

In Japan mobile telcos, especially NTT DoCoMo, have made strong profits from using their current cellular and web technology, called i-mode. But Forrester is dubious about the potential success of high-bandwidth services in Europe.

"The mobile internet won't pay for [3G] investments," says the report. Forrester interviewed mobile telcos and found they expected revenue per person to rise by 25 percent. But Forrester comes to the conclusion revenue per users will fall by 15 percent, a massive difference. Mobile phone network companies that stick with GPRS, the addition of 56Kbps-level data technology to existing cellular GSM systems, will do well says the report.

This puts the mockers on a lot of promises both mobile phone companies and elements of the press have been making. Recently one of the chiefs of DoCoMo said it was unlikely video streaming would work over 3G networks, a potentially major blow to European companies that are pinning their profit hopes in part on this.