Europe (Reuters) - mmO2 Plc (OOM.L), Britain's third-largest mobile phone company, warned on Friday it would take around two more years before speedy, multimedia third-generation (3G) handsets stopped draining their batteries so quickly.

Inset is Bob Fuller, the chief executive of 3 UK quoted below by Reuters.

Taking a swipe at Hong Kong conglomerate Hutchison Whampoa (0013.HK), which started selling Europe's first 3G phones in Britain and Italy in March, Chief Executive Peter Erskine said his rival's network was challenged and questioned whether its customers would ever pay their way.

"The reason why the rest of the industry is launching 3G in the second half of 2004 - and frankly September or October or maybe even later - is the really decent quality handsets which are not battery-life hungry will not appear until October 2005," he told a Morgan Stanley investor conference in Barcelona.

"This next generation (of phones) from (Hutchison's) '3' still have a hungry battery. It is better than the brick they launched originally but not a lot. Add to that the customer service issues due to network quality and I'm not saying I'm in the least bit complacent, but they have a lot to do." 3G phones offer the first live video calls. But some of them run their batteries dry in about an hour of video usage - one of the reasons that the established cellphone industry has delayed launching a service it deems unfit for the high street.

Erskine said he would not be surprised if Hutchison, which operates in Britain via its '3 UK' subsidiary, decided against building up its city network any further. '3 UK' uses MmO2's network for those areas its own base stations do not cover.

Bob Fuller, the chief executive of 3 UK, hit back, saying the company had no plans to rein in investment and was fully committed to its 3G business.

"We're delighted that we've unsettled the CEO of Britain's third-largest 2G mobile phone company," Fuller told Reuters. "For a new technology that is only nine months old, 3 has made huge progress with 5,000 radio (base) stations in place and over 70-percent coverage of the population of the UK."

He said that coverage would increase rapidly as the company continues to roll out its network in coming years.

(c) 2003 Reuters Limited.