Li Ka-Shing promises early roll-out of 3G services

Li Ka-Shing, the Hong Kong billionaire, upped stakes for Britain's four existing mobile operators over the weekend by saying that TIW UMTS, the only new entrant to win a third generation mobile licence in last year's auction, will be first to market 3G services next year.

Mr Li said that TIW "has commenced the network rollout to meet an initial launch target date in mid-2002". His comments were made at a press conference to discuss the results for his conglomerates, Cheung Kong Holdings and Hutchison Whampoa.

Mr Li also sounded an unusually positive note by speaking optimistically about the prospects for 3G services. "We have full confidence in the future of 3G," he said. "This will be an excellent business for Hutchinson."

Reflecting Mr Li's confidence, Hutchison said it has already invested substantial, albeit undisclosed, sums in its 3G operations. The UK unit, in which NTT DoCoMo also has an interest, has signed project financing agreements, agreed deals with handset manufacturers, and hired staff to launch the business.

Hutchison, which controls the company, is already an experienced operator of and investor in mobile services. It set up and financed Orange as the fourth UK network before selling it to the German group, Mannesmann, 17 months ago.

Hutchison also owns mobile assets in Asia, has acquired 3G licences in Australia, and is looking to secure a next generation licence in Hong Kong. In Europe, in addition to its UK licence, Hutchison controls 3G licences in Sweden, Austria and Italy.

However, Mr Li signalled that Hutchison's European expansion was unlikely to go much further. "In Europe, I don't think we will go much more, but in other countries in the world we are still quite interested," he said.

Mr Li's expression of optimism for 3G networks contrasts sharply with the mood of depression that hangs over the industry more generally. A key reason for the poor sentiment has been the growing belief that prospects for next generation networks have been vastly exaggerated. That is the view of Professor Peter Cochrane, until recently the head of technology at British Telecom. In an interview broadcast last night he said that some telecoms companies may collapse under the financial strain of trying to develop and run third generation mobile phones.

Speaking on BBC's The Money Programme, Professor Cochrane said: "Make no mistake about it, this is a fairly serious game of poker. To make 3G pay, everybody's got to have one and be very avid users indeed. I don't see this happening."