Hutchison: ‘3G handset shortage now over. We have loads of money’

15 Dec 2003

Hutchison Whampoa has said that it has resolved the handset shortage which has blighted the take-up of its third-generation (3G) mobile service in Europe and Australia, with Japanese equipment manufacturer NEC scheduled to supply 2.5 million 3G-compatible handsets by the end of March 2004. NEC is expected to deliver a million terminals within the next two weeks, and a further 1.5 million units by the end of March. Hutchison said that it also expects to receive a further 500,000 handsets from Motorola in January. The announcement was made as the company revealed plans to launch 3G services in Hong Kong in the New Year, following the completion of its network by Finnish company Nokia. The launch will mark Hutchison’s first foray into South East Asia’s market for high speed wireless internet services, having already begun commercial operations in the UK, Italy, Austria, Australia and Sweden. It also holds UMTS licences in Denmark, Ireland, Israel and Norway.

Prior to the launch of services under the ‘3’ banner in Europe in early 2003, Hutchison forecast one million subscribers in both Italy and the UK by the end of the year, but at the end of June could claim only 520,000 subscribers across all of its operational networks, with Italy (300,000) and the UK (155,000) accounting for most of the total. It blamed the shortfall on the shortage of compatible handsets, and in October said that UK retail sales had fallen to a third of their peak of 15,000 units per week. In today’s announcement the operator said it had 666,000 customers to its 3G business worldwide at the end of September 2003, of which 340,000 were in Italy and 210,000 in the UK. It claimed average revenue per user (ARPU) in the three months to the end of September was GBP44.26 in the UK and EUR50.5 in Italy.

Hutchison’s managing director Canning Fok told reporters that rather than follow the European rollout model, the company’s Hong Kong operation would be run on very different lines, with no subsidised handset packages or aggressive pricing policies. He stopped short of giving subscriber targets, but did reveal that 80,000 people in Hong Kong had registered online to become customers. ‘3’ handsets will retail at HKD4,380 (USD550), falling to HKD4,000 if subscribers order two or more at the same time. Mr Fok also tried to dispel fears that his company was heading for a funding crisis by saying that it had made provision to invest EUR18 billion in its worldwide 3G operations, of which around EUR9 billion had already been spent.

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