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3 Italia: one million subscriber target ‘postponed’

Supply problems

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3 Italia CEO Vincenzo Novari has been quoted in an interview with Borsa e Finanza business weekly admitting; "our one million client target by the end of March may be postponed by several weeks". He then went on to add "we blame a strong delay in deliveries from NEC, while we see a growth in demand and a perfect technical situation in network and services."

3 Italia is trying to carve out market share before Italy's bigger mobile operators like Telecom Italia Mobile and Vodafone launch their high-tech services. The company currently has about 300,000 clients and 120,000 on waiting lists. It is one of nine 3G ventures worldwide controlled by the Hong Kong-based Hutchison Whampoa Group. This worldwide rollout of 3G services is thought to have cost the conglomerate something in the region of $16.7 billion.

In Europe, the first two countries it launched in were the UK and Italy, back in March. The Swedish operation was launched in May, and it is also currently available in Australia and Austria. There are plans to introduce the services in Denmark, Hong Kong, Ireland, Israel, and Norway.

Most investment banks had expected Hutchison to miss its 2003 year-end targets of one million subscribers in both Italy and the UK, although some expect this to be achieved by the summer of 2004. One of the principle reasons for the gloomy short-term outlook for Hutchison Whampoa's 3G wireless business is due to the shortage of handsets. Hutchison is now expected to reach break even in 2007.

In actual fact, 3 Italia has been a victim of its own success, and it must be said, unreasonable sales targets set by upper management. As early as September this year, it was experiencing supply problems when it ran out of handsets, and was awaiting a shipment of 1.5 million videophones to replenish reserves.

Source: Computerwire/Datamonitor

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