If the first step to recovery is to admit you have a problem, maybe there's hope yet for Europe's telecom industry. Last week the Spanish phone company Telefónica and its Finnish counterpart Sonera suspended their Group 3G joint venture, each writing off more than €4 billion on their investment in new "third-generation" mobile networks for Germany and elsewhere. Like nearly all the big European operators, they paid a lot for 3G because they expected a lot: tapping into higher bandwidth, 3G mobiles were supposed to offer everything from high-speed Internet access to streaming video, allowing telecoms to keep revenues flowing even after the market for plain old phone calls became saturated. But the technology has been slow to develop, and operators have lost investor support for their once-lavish spending. It's a measure of how few people believe in the 3G dream anymore that beaten-down telecom shares rose sharply the day Telefónica finally said "No más." 

The future just isn't what it used to be. Investors and consumers alike have gotten the message: Forget all that stuff about "the Internet in the palm of your hand" — mobile phones are for talking, and maybe some short texting on the side. Those vaunted wap handsets turned out to be an unusually complicated and slow way to get a football score. And for most of us, GPRS — the data-friendly wireless system the boffins call 2.5G — remains just another acronym. (The consultancy Analysys reckons only one-third of people with GPRS phones use the new services.) "Even though we've had these mobile data networks up for a couple of years," admits Kent Thexton, chief marketing and data officer at the British network mmO2, "there hasn't been that much to do on them." 

The operators want badly to change this, 3G or no. Gearing up for Christmas, the wireless industry has begun a big push on a new range of whizzy phones that can take, send, and receive color digital photos. Holiday snaps don't sound especially revolutionary, but to hear the networkers talk, multimedia messaging is just about the biggest thing since rechargeable batteries. mmO2 chief executive Peter Erskine even tempts fate by invoking that dreadful New Economy buzzword, killer app. 

Unlike the old WAP, which did things you could also do on the Internet and mostly did them poorly, picture messaging is genuinely new and seems to work well. But the more important point is that for the first time, it's possible to see cell phones as a really visual medium. The novelty value of being able to take a picture of yourself and send it to your grandmother via e-mail might wear off quickly. But the wireless operators aren't really out to turn people onto photography. They want to get us used to the idea of downloading, swapping, and paying for images — and, not long after, short streaming video clips — on our phones. Harris Jones, chief executive of Deutsche Telekom's T-Mobile U.K., which in June became the first British operator to launch multimedia messaging, expects that picture viewing capability will be nearly universal in new phones by spring.