Hutch bows in and bows out

29 Jan 2004

Hutchison Whampoa drew mixed reviews when – after almost a year delay – it rolled out its third-generation wireless network to its home market yesterday. Many of those testing the service at a shop in the Causeway Bay district were impressed with the handset’s video conferencing capabilities, although most were disappointed with the picture quality. At HKD3,980 for a handset – 30% more than 2G phones – many potential customers said they would wait for technological improvements before buying. Others said they would wait for a wider range of handsets to become available, shunning the lone NEC model on offer by Hutch. About 80,000 people registered online for phones before the 19 January deadline, although they are not under obligation to buy. Subscription plans for the new network start at HKD63 per month.

Meanwhile, in a deal worth HKD7.1 billion, Hutch’s billionaire controlling shareholder Li Ka-shing confirmed his company would be injecting its loss-making domestic fixed line business Hutchison Global Communications (HGC) into Vanda Systems – a computer parts seller also controlled by Hutchison – through a backdoor listing. Under the reverse takeover, Vanda Systems will purchase all HGC shares, which will be funded by the issuance of new Vanda shares worth HKD3.9 billion and convertible bonds of HKD3.2 billion.