Hutchison's 3G ambitions

date: April 19, 2001 - source by: BBC

Hong Kong conglomerate Hutchison Whampoa remains confident of the success of third generation mobile technology, even as its rivals are starting to quake.

While its diverse range of interest - everything from retail to shipping to telecoms - marks it as a typically Asian conglomerate, it bears few of the problems that have dragged other conglomerates in the region down.

Hutchison Whampoa's origins date back to 1800s and in its present incarnation, it is run by Li Ka Shing, through Cheung Kong, which holds a 49.9% stake in the company.

It only set up a telecoms arm in 1985 and is now a leading player in telecoms and internet infrastructure.

In the UK it is best known for launching Rabbit, as well as the Orange brand - now owned by France Telecom.

3G shopping spree

Last year, the group got 3G licences in Italy through its subsidiary H3G Italy, in Austria and the UK through its wholly owned Hutchison 3G and in Sweden through subsidiary Hi3G.

When it released its results earlier this year, Hutchison Whampoa founder Li Ka Shing waxed lyrical about the potential of third generation mobile phones.

He believes 3G services could be launched in the UK by the middle of next year, contrary to other industry experts which believes they are unlikely to emerge before 2004.

Hutchison Whampoa has managed to emerge relatively unscathed from the debt troubles that have scarred its competitors.

Already the largest mobile operator in Hong Kong, the group intends to apply for a licence there when they are put for sale later this year.

But aside from this bullish confidence, it has warned that the US slowdown and the start-up of telecom operations will make the year ahead "challenging."

Stepping back

Part of its success may be that as the third generation frenzy gained momentum - Hutchison did step back from the fray.

Five hours after the German auction closed,the Hutchison Whampoa conglomerate withdrew from one of the winning consortia, saying too high a price had been paid for too restricted a licence.

It is now in the process of raising funds to build the network it needs.

Hutchison 3G UK has completed a £3.6bn financing package, raised from banks, vendor finance and shareholder sources.

"Hutchison 3G is now fully funded beyond the launch of its services and the commitment of a group of banks who are clearly leading the understanding of the 3G proposition among financial institutions," Colin Tucker, managing director of Hutchison 3G said.

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