Hutchison and MobilCom predict lower 3G roll-out costs

date: 13th December 2000

Hutchison Whampoa said building its U.K. third-generation (3G) mobile network will cost about three billion pounds -- at the low end of earlier estimates by the firm of up to five billion pounds over five years, said analysts who attended a meeting on Tuesday.

The Hong Kong conglomerate, which is controlled by property tycoon Li Ka-shing, also said commercial launch of its British 3G service, in which it holds a 65 percent stake, could begin in July 2002. Previously the firm had said a launch would take place in either 2002 or 2003, analysts said on Wednesday.

A Hutchison-controlled group paid 4.4 billion pounds in April for the U.K. licence, then sold a 35 percent stake in the consortium to Dutch carrier KPN Telecom and Japan's NTT DoCoMo.

German telecoms firm MobilCom's chief executive was also reported on Wednesday as saying the build-up of a third-generation mobile phone network would cost less than it had originally envisaged.

Gerhard Schmid was quoted as telling Teleboerse magazine that MobilCom now expects to be able to reach 50 percent of the German population with investments of 1.6 billion euros (970 million pounds).

"At first we expected a total of five to six billion euros. We'll save a third of that over 10 years," he was quoted as saying.

MobilCom shares plunged last week on investor fears that it may have problems securing the funding to roll out the so-called UMTS standard of mobile telephony which allows high- speed Internet access by mobile phone.

The company quickly moved to try and reassure investors that it had secured financing. MobilCom bought a German UMTS licence this year for 16.37 billion marks (5.19 billion pounds).

Schmid implied banks were mainly to blame for the recent turmoil on Germany's Neuer Markt because they had been indiscriminate in arranging stock market flotations, regardless of how sound the companies being listed were.

"They brought everyone to the stock market who could spell 'Internet'," Schmid said.

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