Hi3G has said it will begin providing services in Sweden under the brand name 3 by spring this year, with plans to reach break-even by 2008 at the latest. The cellco, which is owned by Hutchison Whampoa and Swedish holding company Investor, said it plans to attract subscribers with low prices for voice calls – 5%-10% lower than those offered by its 2G rivals. According to chief executive Chris Bannister, however, 3 does not want to start a price war on voice calls and plans instead to focus on applications, in particular person-to-person video calls, in order to differentiate itself from its competitors. Existing 2G cellcos TeliaSonera, Tele2 and Vodafone however, will regard the launch of 3 as a threat to their operations, as, thanks to the saturated market, the new cellco will need to poach customers from them to survive.
3 won its 3G licence in December 2000, at the same time as Tele2, Vodafone and the Orange Sverige consortium; under the terms of the licence, 3 is obliged to have coverage of at least 99.98% of the Swedish population by 2004. Bannister said the company will initially offer 3G services over Vodafone’s network in cities such as Stockholm, Malmo and Gothenburg, moving traffic to its own 3G network sometime in 2004. 3 hopes to have achieved a 25% market share in Sweden over its 15-year licence period.
At the end of September 2002 there were around 7.71 million mobile subscribers in Sweden, up from 7.08 million at the end of 2001. TeliaSonera held around 46% of the market at this date, with Tele2 accounting for 38% and Vodafone holding a 16% share. Both Tele2 and Vodafone have upped 3G investment for 2003 and plan to begin offering the service by the end of the year; Vodafone launched its pilot 3G network in Karlskrona in December 2001. In September 2002 Orange Sverige appealed to the regulator PTS to delay rollout conditions from end-2003 to end-2006 but this was rejected.