First year over for 3 UK

8 Mar 2004

On 3 March 2004 Hutchison 3G UK celebrated its first year of operation. Since its well publicised launch on 03/03/03, the operator has signed up 210,000 customers to its network in the UK, and 660,000 worldwide. 3 said it was happy with the results and expects the service to really get off the ground in 2004. According to CEO Bob Fuller, 3’s strategy since its launch has been to ‘incrementally open up the market at a pace that has enabled us to build and strengthen our network and operations infrastructure’, which he claims it has fulfilled. The newcomer has achieved 65% brand awareness in the UK, and launched a number of new services, including its pay as you go service ThreePay, launched last week, and its first live, interactive video mobile news and entertainment channel, ‘Today on 3’. The operator also claims to have more than doubled its range of video handsets, with the introduction of the NEC e616 and e313 and the Motorola A925, taking the total number of 3 phones available to five.

Hutchison 3G UK (H3G) is one of five companies to hold a 3G licence in the UK, with the four main players in the mobile market, mmO2, Vodafone, Orange and T-Mobile also winning concessions. 3 bid GBP4.38 billion for Licence A in May 2000 and was allocated 15MHz of paired spectrum and 5MHz of unpaired spectrum; the concession will expire on 31 December 2009. H3G UK began life as TIW UMTS – a joint venture between Hutchison Whampoa and Canada’s Telesystems International Wireless (TIW) – but changed its name in July 2000 after TIW chose to sell its shareholding to KPN and NTT DoCoMo.

Although 3 claims to be satisfied with the take-up of services, it has been plagued with problems since its launch. The slow start has led to some serious financial problems. In March 2003 its parent Hutchison Whampoa said it was investing GBP650 million into the UK third-generation business, a figure that rose to GBP1.6 billion when partners DoCoMo and KPN stumped up additional monies later on. In October 2003 NTT DoCoMo publicly denied rumours that it was looking to withdraw from the venture, saying it welcomed the cellco’s initiative in being the first to inaugurate next-generation services. DoCoMo was said to have threatened to pull out if 3 refused to offer its i-mode service, but the Japanese company’s CEO, Keiji Tachikawa, insisted talks were still ongoing. However, the rumours have now surfaced again, and this time DoCoMo has not denied them, claiming that it might look for another partner in the UK to spread its i-mode technology; mmO2, the smallest operator in the market, has emerged as the most likely candidate. Such a move would come as a further blow to 3 UK, which has already seen one significant backer pulling out; KPN sold its 15% stake in the cellco to Hutchison in November 2003 after the Dutch telco refused to comply with a request for extra investment injection.

United Kingdom, Hutchison 3G UK (Three UK)
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