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What if Hutchison walks away from 3G?

Posted on 11-Jun-2003 19:58 | Filed under: News


What if Hutchison walks away from 3G?
With far less subscribers than the initial forecast of 2 million users by the end of 2003 (currently 25,000 in UK and 100,000 in Italy) Hutchison reduced prices last week, in another attempt to lure the consumer.

But the comnpetition is not impressed. Both Orange and mmO2 said that they were not worried about the price cuts, which are up to 50% below the UK average, and that service quality and customer experience were more important than price. But their cool reaction did not stop shares in the operators from sliding as markets feared that the European mobile phone industry was headed for a price war.

Some analysts believe Hutchison may pull the plug on 3G if it continues to fall short of expectations rather than let its credit rating slip into non-investment grade. Dilip Parameswaran, director of credit research at Credit Agricole Indosuez, said, “We believe Hutchison would be prepared to walk away from 3G, given the great care it has taken to structure 3G financing separately from the rest of the business.”



More information: http://www.bwcs.com/marketing/index2.html...