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HW investors warn on further funding increase
March 19, 2003
CEOs in Hutchison Whampoa needs to reassure investors that the
Hong Kong-based company won't increase a $16.7 billion bet on 3G
wireless ventures when it reports annual earnings on Thursday, investors
say.
Hutchison this month started Europe's first 3G mobile service in
the UK and Italy. While NTT DoCoMo, which launched the world's first
3G service in Japan, has missed user targets and plans to cap spending,
Hutchison needs to invest more and will start posting losses from
the business this year.
"All investors care about now is how much extra they'll need to
pump into 3G," said Stella Lau, East Asia Asset Management. "Economies
in Europe aren't doing well, so no one can say for sure when customers
will accept 3G. All we know is that it's taking a long time in Japan."
Unclear customer demand and cooling investor interest have forced
companies from Vodafone Group to Orange to postpone 3G services.
Earlier this month, Hutchison 3G UK asked shareholders to lend
it £1 billion, raising investor concern over whether the unit has
enough money to fund its business. Hutchison has budgeted to spend
$16.7 billion on 3G services in Hong Kong, Australia, Israel, Sweden,
Denmark, Ireland and Austria, including money from its partners
and banks.
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