Feeds

FT obtains Hutchison 3G business plan

Delays knock original assumptions

  • alert
  • submit to reddit

Providing a secure and efficient Helpdesk

ComputerWire: IT Industry Intelligence

Hutchison 3G has denied that it will breach covenants with its bankers as a result of a delayed launch of 3G mobile services in the UK and Italy. The new wireless operator, which is due to launch much-delayed 3G services by the end of this year, insisted that suggestions in the Financial Times that covenants related to the number of customers were incorrect and it did not have problems with funding.

Nonetheless, the publication in the Financial Times of a business plan, prepared in 2000 to persuade a consortium of banks to lend it £3bn ($4.7bn), is embarrassing for the company as it draws attention to the initial high hopes that carriers had for 3G technology which persuaded them to pay £22.5bn ($33.5bn) for licenses in the UK alone.

According to the report, Hutchison expected to have 400,000 users by the end of 2001 and 1,500,000 by the end of this year. By 2010 it forecast that it would have 9.4 million customers, each paying on average 54 pounds ($85.3) a month for services.

In reality, Hutchison currently has no paying customers as it has been hit by the lack of 3G handsets and is currently expecting 100,000 from supplier NEC by the end of the year. For the moment, it is testing its service using a limited number of "friendly" customers while it attempts to iron out problems caused by dropped calls when customers move from a 3G cell to a 2G one.

The company insists that this is just a software problem that will eventually be solved and will not cause problems for the vast majority of customers who move in urban areas covered by continuous 3G cells.

But the delays erode Hutchison's first-mover advantage that gave it the opportunity to build up a substantial customer base with technology superior to its established competitors. There is in any case the problem of the current lack of interoperability between the 3G systems of different vendors.

Many observers are sceptical about Hutchison's belief that it can persuade its customer base to spend more than £50 ($79) a month on mobile communications, and that this is a level of spending only currently achieved by a small minority of users.

In August this year, Dutch incumbent KPN NV wrote 1.5bn euros ($1.4bn) off the value of its 15% stake in Hutchison 3G, valuing the holding at 300m euros ($291m) and suggesting that the UK's fifth mobile operator is worth just 2bn euros ($1.9bn).

© ComputerWire

Protecting against web application threats using SSL

More from The Register

next story
Brit telcos warn Scots that voting Yes could lead to HEFTY bills
BT and Co: Independence vote likely to mean 'increased costs'
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
New 'Cosmos' browser surfs the net by TXT alone
No data plan? No WiFi? No worries ... except sluggish download speed
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Blockbuster book lays out the first 20 years of the Smartphone Wars
Symbian's David Wood bares all. Not for the faint hearted
Bonking with Apple has POUNDED mobe operators' wallets
... into submission. Weve squeals, ditches payment plans
'Serious flaws in the Vertigan report' says broadband boffin
Report 'fails reality test' , is 'simply wrong' and offers ''convenient' justification for FTTN says Rod Tucker
This flashlight app requires: Your contacts list, identity, access to your camera...
Who us, dodgy? Vast majority of mobile apps fail privacy test
Apple Watch will CONQUER smartwatch world – analysts
After Applelocalypse, other wristputers will get stuck in
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.
Security and trust: The backbone of doing business over the internet
Explores the current state of website security and the contributions Symantec is making to help organizations protect critical data and build trust with customers.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.