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3 Sweden targets 20% of users

May 12, 2003

3 Sweden, a start-up telecommunications operator backed by Hong Kong's Hutchison Whampoa, became the first Swedish carrier to offer 3G services last week, saying it is targeting the top fifth of the Swedish mobile subscriber base.

"We know the tariffs here will appeal to about 20% of the people," Chief Executive Chris Bannister said, which analysts described as aggressive.

3 Sweden, faces a sizable challenge in Sweden, where four of five residents already has a mobile subscription. In order to succeed, 3 Sweden will have to lure customers away from the country's three current operators, Telia , Tele2 Comviq and Vodafone Sweden that also focusses on corporate and high-end private subscribers.

Analysts said 3 Sweden is off to an aggressive start last week. "These are pretty low prices," said an analysts and added, though, that despite the company's talk of video, it is going to have to compete effectively with the established operators on voice services if it is to be successful. "That will be the key service for a number of years, if not for the whole future," he said.

Bannister said company expects to break even, before interest, taxes, depreciation and amortization, within four to five years. He declined to predict how quickly 3 Sweden would add subscribers, saying only that the company expects "thousands" in Sweden by year-end.

3 Sweden began taking orders for handsets last Monday, promising to deliver them within 31 working days. Around 5,000 people who have expressed interest will get handsets over the next few weeks, Bannister said.

 


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