Hutch buys out H3G UK partners ahead of schedule, books USD1.2 billion

11 May 2005

Hutchison Whampoa has announced that it is to buy out the stakes in its UK operator Hutchison 3G UK (H3G UK) held by KPN and NTT DoCoMo two years earlier than expected. Hutch says it will make a final GBP70 million (USD132 million) payment to acquire the combined 35% holding of its two partners by 23 June at the latest. The deal will give Hutch total ownership of H3G UK and also prompt it to book an unexpected net profit of USD1.2 billion from the elimination of a USD1.9 billion liability related to the minority interests. The profit will help Hutch repair H3G UK’s battered balance sheet; the cellco is expected to post a USD2.6 billion loss this year.

H3G UK launched commercial 3G services on 3 March 2003 under the brand name 3 and after a slow start began to attract high numbers of users on the back of high profile marketing campaigns and low cost contract packages. However, Hutch fell out with NTT DoCoMo and KPN over H3G UK’s need for additional funding during its start-up period. KPN announced its desire to exit in November 2003, after refusing to contribute to a GBP1 billion funding call for operator, with DoCoMo following barely seven months later.

United Kingdom, CK Hutchison, Hutchison 3G UK (Three UK), KPN, NTT DOCOMO