Hutchison Facing Huge 3G Bill

Hutchison Facing Huge 3G Bill

BILLIONAIRE Li Ka-shing's bold leap into the world of 3G mobile phones hit another snag today with delays in Britain forcing it to postpone a planned March launch in Australia. With technical problems with the service threatening the already delayed launch in Britain, and Hong Kong now six months behind schedule, Li's Hutchison Group is facing a blowout in costs on a project already costing billions of pounds.

Hutchison, which is risking all on its first-mover advantage in 3G, had planned to steal the advantage in Australia from bigger rivals Telstra and Optus, which are still in the 3G pilot phase.

Although both those companies have said they are taking a 'wait and see' approach to see how Hutchison fares, local analysts said they may be tempted to test the market if Hutchison faces more delays. 'The possible mover is Optus, now that its parent company Singtel has been pushed into 3G by the Singapore government,' said one Australian telecoms analyst.

The Singapore government has rejected Singtel's request to delay its 3G launch, which must go ahead in early 2004. With Optus and Singtel sharing 3G product development the analyst said Australia could become the testing ground. For Hutchison, problems with the threep hase testing of 3G handsets in Britain are expected to push the Australian launch back to the second quarter of this year. Li has set out a strict timetable for the staged launch of the company's 3G services around the world, with Australia the last cab off the rank after Britain, Italy and Hong Kong.

A Hutchison spokesman last night confirmed the Hong Kong launch would be put back 'until after March'. The original launch date was planned for October last year.

In Britain, the company has set up three pilot retail outlets for the original launch date in January, but the handset problems now mean a March date is likely.

The delay has also wrecked plans of Hutchison's marketing department to launch on 3 March (3/3/03) for the Australia launch of the service, to be branded simply as 3. Hutchison is spending more than £7bn on 3G in Europe against £1bn in Australia.

The delay comes only a day after Hutchison reassured the Australian market it did not need any additional funding for its local 3G launch, denying speculation that it was running out of money. Hutchison has had a difficult time in Australia, and most recently posted a A$72m (£26m) half-year loss.

TODAY'S PRESS RELEASES

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Hutchison, which is risking all on its first-mover advantage in 3G, had planned to steal the advantage in Australia from bigger rivals Telstra and Optus, which are still in the 3G pilot phase.

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