Hutchison to take emerging markets operation HTIL private

Hong Kong conglomerate Hutchison Whampoa has announced plans to take its emerging markets spin off, Hutchison Telecommunications International (HTIL), private with a $545m offer.

HTIL was listed in October 2004, comprising an eclectic mix of 2G and fixed-line emerging markets operations in India, Thailand, Israel, Macau, Sri Lanka, Ghana and Paraguay and 2G and 3G operations in the competitive Hong Kong market. The outfit subsequently offloaded its Indian and Israel operations and spun off of its Hong Kong and Macau businesses using the money from the floatation to offset its sizeable losses attributable to the start up costs of its 3G operations.

In this latest move, Hutch is planning to buy the remaining 39.6 per cent stake in HTIL it does not already own. “HTIL now has operations in four countries [Indonesia, Sri Lanka, Vietnam and Thailand], none of which is amongst the top three operators in their respective markets and all of which generate negative cash flow,” the firm said, suggesting that it thinks it would be better off building the operations up as private assets before offloading them.

Telefonica is to test LTE in six countries

European carrier Telefónica is to roll out LTE test projects in six countries, with a view to selecting technology providers for its 4G deployments.

The suppliers Telefónica has chosen so far are Alcatel-Lucent, Ericsson, Huawei, NEC, Nokia Siemens Networks and ZTE, all of which will start rolling out the equipment necessary for testing the technology during the coming months.

The project will take place over six months and will consist of field tests and the installation of base stations at Telefonica’s branded operations in Spain (Telefonica), the UK, Germany and the Czech Republic in Europe as O2, and Brazil and Argentina in Latin America as Telefonica Moviles.

The Spanish firm reckons its will be able to offer peak speeds of up to 340Mbps in ideal conditions using LTE, exploiting benefits from more flexible spectrum management, increased efficiency through greater operating automation and the mass adoption of the technologies such as MIMO.

“We are defining our strategy and the rollout of LTE with the objective of driving mobile broadband and offering the best service from the moment that the equipment and terminals can support the new standards and are available for sale,” said Julio Linares, COO of Telefónica.

In related news, Austrian mobile operator Hutchison 3G said it has tapped Nokia Siemens Networks to deliver HSPA+ and LTE upgrade kit starting in the autumn of 2009.

With the HSPA+ upgrade in place, Hutch claims it will be able to offer download data rates of 21Mbps from early 2010 and as of 2011, the network can be upgraded to Long Term Evolution (LTE) offering theoretical data rates as high as 100Mbps.

“The demand for increased mobile broadband capacity and throughput in Austria is reflected in the increasing usage of data cards and mobile services like Mobile TV, video download or video sharing,” said Berthold Thoma, CEO of Hutchison 3G Austria. “Mobile broadband is also one of the most pragmatic solutions to bridging the digital gap between cities and rural areas. For rural areas, mobile broadband coverage is simply less expensive and faster to deploy than “fibre to the home” solutions,” he added.

“There will be consolidation over the next three to five years and at the end of that, there will only be three vendors left,” he said. “And two of them will be Chinese”. He declined to offer an opinion as to which of the European and North American firms would be left at the end of this period to do battle with ZTE and its domestic competitor Huawei, choosing instead to dismiss Western suppliers as “too slow.” We don’t say ‘slow’ here at Informer Towers, though, we say ‘special’.

It’s by no means the first time that this type of prediction has been made, although perhaps Robbiati’s assessment is the most blunt the Informer has heard. As we’ve said before, the Chinese vendors, with access to huge manpower and R&D budgets, comparatively cheap labour and very respectable credit lines from Chinese state banks are likely to emerge from the current financial crisis in a stronger position relative to their Western competitors than they had when it began.

The World Intellectual Property Organization (WIPO) reported earlier this year that in 2008, for the first time, a Chinese company – Huawei – topped the list of applicants in its Patent Cooperation Treaty. There are caveats, of course. Patent filings don’t necessarily reflect market performance. Furthermore, the sector with the most filings was medical technology, not telecommunications, while China as a nation ranked sixth among applicants, behind the US, Japan, Germany, South Korea and France. Nonetheless the WIPO figures do highlight the surge made by Chinese vendors (ZTE ranked in the top 100 applicants).

Interestingly, despite the praise he heaped on ZTE and China in general (“In Hong Kong there is some snobbery towards mainland China. But it’s ridiculous, you only have to look at the technology that comes out of China.”) Robbiati dismissed out of hand the Chinese government’s reported aim that 20 per cent of the world 3G market be gobbled up by the nation’s home-grown TD-SCDMA standard.

“I don’t buy that because unpaired spectrum isn’t available in all geographies,” he said. Even ZTE’s CTO for Western Europe, Xiaodong Zhu, who was also present, indicated that such an ambition was optimistic at best. “We don’t believe that TDD can get a big market share,” he said. “But we believe there will be convergence between TDD and FDD.”

If Western vendors are slow in Robbiati’s judgement, then European carriers are no better. As Lord Carter – or Lord Carter the Unstoppable S3x Machine to give him his full title – stood a mile or two away delivering his plans for Digital Britain, Robbiati was trying to get a signal in a Park Lane hotel, and dismissing Carter’s recommendations as “too little, too late”. He went on: “I’m appalled by how weak the speeds are in Europe,” before claiming that his firm would be the first in Hong Kong to offer speeds up to 100Mbps. He didn’t say when this would happen, but promised: “We can do this really quickly.”

The man’s not shy.

Back to Lord Carter and his too little, too late, then. The Digital Britain white paper he delivered this week was designed to map a path for the UK’s digital economy evolution in a bid to keep us competitive with the rest of you.

The key points included universal access to at least 2Mbps broadband by 2012 through the creation of an investment fund; a £0.50 per month levy on all copper lines, which will go into the independent Next Generation Fund and will be available as a subsidy to operators willing to extend broadband coverage to the final third of homes where it is not available; the upgrade of all radio services to digital by 2015; changes to 3G licence terms, making them indefinite (Bonus!), rather than fixed term licences, which should encourage investment and deliver in building speeds of 1Mbps by 2013; and new powers for industry regulator Ofcom as well as a new requirement that the watchdog carry out a full assessment of the UK’s communications infrastructure every two years. So they’ll be busy little bees over there.

On to two stories involving the digits ’3′ and ’0′ now, the first of which keeps us in the UK. If Hutchison-owned carrier 3UK were a Transformer, it would be a Disrupticon, so enamoured is it of strategies designed to shake up the market. Taking cut price tariffing to its logical conclusion, the operator has now introduced a completely free monthly contract. That’s either brilliant, or catastrophically stupid.

The Sim Zero tariff is available for one month’s minimum term with a 30-day cancellation period and is a bid to attract prepay users who might like the idea of Skype-calling. Subscribers are not required to top up, although they will need to if they want to make calls and send texts. 3UK charges £0.20 per minute for all standard calls, £0.10 per text and £0.30 per MB of data on this tariff.

But all Skype-to-Skype calls and instant messaging are free and unlimited on the contract, even if the user doesn’t top up. Quite how this is different from prepay, the Informer is not subtle enough to divine. It seems that the only real difference is that the user accepts a binding agreement of at least 60 days, and presumably 3 gets their details. Apart from that, same deal.

Over on 3′s Italian network international MVNO Lycamobile has just launched its diaspora-based service. International calls are priced from €0.09 per minute, with national calls from €0.15 per minute. On-net Lycamobile to Lycamobile calls are free for the first 15 minutes, and a promotional campaign will also offer free text messages to anywhere in the world until the end of July.

Lycamobile has launched its prepaid SIM only MVNO services in the Netherlands, Belgium, Norway, Sweden, Denmark, Switzerland and the UK, with almost four million subscribers in total.

The other ’3′ and ’0′ has a dot in the middle and refers to the iPhone. Finally, MMS is a reality. Apparently the new software allows you to play Snake, too. It’s like The Future, but it’s here now!

Apple made version 3.0 of its iPhone software available to download on Wednesday, giving users access to 100-odd new features including: Cut, Copy and Paste; MMS; improved search; landscape keyboard; parental controls; Voice Memos; a Find My iPhone feature that works together with MobileMe; Remote Wipe; wireless downloading of movies, TV and audio programs; and peer to peer functionality.

It wasn’t a picnic, though, with hoity toity iPhone cultists in the Informer’s office bleating and whining about problems with the update. O2, the UK carrier partner for iPhone, seemed unable to deal with the level of demand for the automatic MMS configuration from these people, saying it had been hit with thousands of requests from users. Some people who updated their Apple gadgets as soon as the software became available were still waiting for MMS to be activated on Thursday lunchtime. Surely there’s something about this in the Geneva convention on human rights.

O2 said users needed to allow up to 24 hours for the change to take effect. Like, totally?

The Nokia N97 came out as well, this week, but the Informer hasn’t got hold of one yet, so there will be no elaboration.

Back to fruit-based phones, though, and Canadian vendor Research In Motion (RIM), said Thursday that it shipped around 7.8 million devices during the three months to May 30, 2009. In that same period the vendor also added 3.8 million new BlackBerry subscribers.

Net income for the quarter hit $643m, up from $482.5m in the same period last year. Revenue topped $3.42bn, up 53 per cent from $2.24bn in the same quarter of last year. The revenue breakdown for the quarter was approximately 81 per cent for devices, 13 per cent for service, 2 per cent for software and 4 per cent for other revenue. At the end of the quarter, the total number of BlackBerry subscribers worldwide was approximately 28.5 million.

iPhone, N97 and Blackberry users might be interested to read of Vodafone Portugal’s new pricing gambit, which is to charge for data by time, rather than volume. The Vita Net Light prepaid plan provides mobile broadband access for ten hours over a six month period for a top-up of €10. Data usage over that ten hour period is unlimited.

Vodafone said the plan is targeted at users who only need occasional mobile broadband access hence the six-month usage period, and is designed to eliminate any worries the user may have about the volume of data transmitted. A USB modem is available with ten days internet access for €49. But the downside of this offer is that users can only expect top speeds of 1Mbps, whereas Vodafone Portugal’s postpay users have access to speeds up to 7.2Mbps, the firm said.

In a tenuous Portuguese link, voice to text specialist Spinvox has signed a deal with Telefonica that will see the Spanish firm make Spinvox’s service available to some 125 million customers across its Latin American portfolio. Big business.

Last October Spinvox inked its first Latin American deal with Telefonica’s Chilean operation. This latest announcement extends its service to the carrier’s properties in Argentina, Columbia, Ecuador, El Salvador, Guatemala, Mexico, Nicaragua, Panama, Peru, Uruguay as well as Vivo, the Brazilian operation Telefonica owns jointly with Portugal Telecom (tenuous Portuguese link: Check).

The deal gives a massive boost to the number of mobile subscribers to whom Spinvox services are available, with the firm now forecasting 150 million users by the end of this year. Currently 30 million people use Spinvox, and a spokesperson said the firm has signed more deals that have yet to be announced. Clearly, though, Spinvox anticipates huge take-up from Telefónica’s Latin American subscriber base.

Finally, this just in: T-Mobile UK has announced that it’s bringing out a new Android Handset called the Git Ouch! Oops, sorry, I mis-read that. It’s called the G1Touch. Because T-Mobile is so Web 2.0 it announced the handset on Twitter.

There’s plenty of speculation about the new device, mostly suggesting that it will be the HTC Magic, which is currently only available on Vodafone in the UK. Coincidentally, T-Mobile USA has just announced that it will be launching the Magic in the US under the myTouch 3G moniker, which may be the cause of the confusion over the G1Touch.

However, rumour has it that HTC, which made the original G1 for T-Mobile, is staging a big launch next week, and that device may be something like the G1 without the pull out keyboard. The Informer will keep you posted.

Take care

The Informer

Hutch to intro Twitter handset

The handset unit that emerged from the incubator of Hong Kong’s Hutchison Whampoa is onto its second device and is sticking with the social networking theme with the Twitter phone.

Addressing the mass market once again, as it did with the INQ1 Facebook phone, which launched last year, the Twitter device – presumably called the INQ2 – promises to be affordable and will feature a Twitter client and 3G to encourage usage of data services.

The INQ1, designed by INQ Mobile and built by Chinese electronics firm Amoi, was the first of many devices to be built by a number of manufacturers under the INQ brand.

The hardware is designed to bring the price down, putting 3G gadgets in the hands of the masses, while the main focus is on software, specifically integration with social networking applications through agreements with Facebook, Skype, Windows Live Messenger, Last.fm and Twitter among others.

INQ Mobile is headed up by Frank Meehan, who was previously general manager of global handsets and applications for Hutchison, where he was responsible for procuring more than nine million 3G devices each year. At the launch of the INQ1, Meehan revealed that the company spent two years developing a software platform that sits on top of Qualcomm’s BREW system, which brings 3G down to the mid-to-low-tier and features multi-tasking, and is designed to remove interface clutter by relying on a carousel-based UI.

Follow telecoms.com on twitter

This really takes the bad PR biscuit: Apple this week had to remove an app from the store called Baby Shaker; a game in which a crying baby pictured on screen must be silenced by shaking the handset (and activating the accelerometer). Nice. This generated a good deal of negative comment, as you might imagine, with one infant health campaigner even going as far as to accuse Apple of encouraging people to shake actual babies to death.

Well, steady on, the Informer thought, there’s no evidence that Apple wants people to go out and commit infanticide, let’s make that quite clear. Rather, what we have here is an example of very bad taste. What makes it interesting is that Apple is renowned for the totalitarian control it exerts over which applications are allowed into the hallowed virtual halls of its marketplace which rather suggests one of its staff gave Baby Shaker the thumbs-up.

A PR booboo this may have been, but it hasn’t dented Apple’s financial performance. Strong iPhone sales – 3.79 million units, up 123 per cent year on year – helped the company’s Q109 revenues up to $8.16bn, compared to $7.5bn for the previous year. Net profit was $1.2bn, up from $1.95bn in 2008.

Fellow handset maker Samsung turned a profit for Q1 as well, netting $461m – better than its Q4 results but still more than 70 per cent down on Q108. It was the phones wot won it, as other units, such as LCD screens and memory chips are having a bit of a shocker. It wasn’t enough to please the markets, though, and Samsung’s shares dropped by 3.67 per cent in Seoul.

In other handset news, Google promised this week that 2009 would be a big year for its Android OS platform. With almost four months of 2009 already gone, though, and only one Android handset currently on the market, the Open Handset Alliance – the grouping that centres on the Android platform – has some way to go. It was announced this week that the HTC Magic, Android handset number two, which was unveiled at Mobile World Congress in Barcelona two months back, will debut in the on May 5^th with Vodafone in the UK, Spain, Germany, Italy and France (with SFR).

Vodafone, along with the rest of the UK mobile operator community must be tired of 3UK, with its disruptive ways. All that work those poor carriers have done to protect their business models and pricing strategies and that pesky 3 – which long ago discovered the futility of control freakery – comes along and starts giving customers better value for money, damn it!

The latest ruse from 3 CEO Kevin Russell and his merry band is to allow 3 customers to make free Skype to Skype calls without incurring data charges. From the beginning of next month, anyone with a 3 Skype-enabled handset will be able to Skype to their little heart’s content and it will be free as a bird. And from the summer this will include users with unlocked handsets and 3 SIMs, even if the Hutchison-owned carrier didn’t supply the handset.

“Communication through the internet is exploding. Internet calling or VoIP, social networking, instant messaging and email are used by millions in the UK every single day. They are open to all on their PCs and laptops. We want people to be free to communicate from their mobiles in the same way as they do from their PCs,” said Kevin Russell, CEO of 3 UK. Russell is gambling that free Skype will act as a customer adhesive, as well as encouraging users to initiate more traditional calls, send more text messages and browse the internet.

IDC research director John Delaney commented that the latest move was in line with 3′s policy of going things “that other operators are reluctant to do”. Other UK carriers, of course, have tried to suppress Skype by insisting that the application is removed from handsets by vendors. But Delaney reckons that 3′s latest move will not really mess with existing call revenues, given that most Skype calls are made to PCs rather than other mobiles.

“We think it is unlikely that Skype will significantly cannibalise conventional call revenues, at least until the number of Skype phones reaches a much higher percentage of total phones in use. If the number of Skype phone users in the UK gets into the tens of millions, voice cannibalisation will become a more pressing issue – but we suspect that’s a problem that 3 would love to have to deal with,” Delaney said.

Meanwhile, investment tycoon Richard Li – son of Hutchison-owner and Asia’s richest man Li Ka-shing has quite a different problem to deal with, finally relinquishing his bid to buy out Hong Kong carrier PCCW for US$2bn. The deal has been the focus of a drawn-out legal battle, and Li’s withdrawal came hot on the heals of an Appeal Court judgement that blocked the deal, in light of allegations from Hong Kong’s financial market regulator that the shareholder vote had been manipulated. The other major shareholder in PCCW is China Mobile.

Not too far away, in Taiwan, lonely WiMAX pioneer Clearwire is looking for a pen-friend in Global Mobile, one of six WiMAX licensees in Taiwan, according to local reports. The Informer always thought that money couldn’t buy you love, but it looks like it might in this case, as Clearwire may have to take a stake in the Taiwanese carrier in order to secure the strategic alliance for which it yearns. Not least because Global Mobile might not be able to launch without a further capital injection.

Although the six 2.5GHz WIMAX licences in Taiwan were awarded in July 2007 – three for the northern part of the island and three for the southern part – none has yet managed to launch commercial service. Lack of funding, combined with the economic downturn, has been the main reason for the delay.

The economic downturn was also responsible for a profit warning from Deutsche Telekom this week, which said that EBITDA would be up to four per cent lower for 2009 than was originally expected.

Monthly ARPU (average revenue per customer) in the US fell as a result of lower roaming revenues due to a decrease in consumer travel, while the rollout of the carrier’s 3G network increased expenditure and costs. Polish operation PTC suffered considerably from the sharp decline in its home currency, the Zloty, which fell around 26 per cent year on year against the Euro. Meanwhile T-Mobile UK recorded a significant drop in revenues of around 21 per cent due to the fall in the value of Sterling.

Michael Kovacocy, European telecoms analyst and sector strategist at Daiwa Securities, offered a downbeat assessment of the firm’s UK position “Based upon our analysis, the UK business suffers not simply due to the existence of one too many competitors. T-Mobile UK’s problems go deeper, in that market maturity has combined with macro-economic weakness to drive customers increasingly towards price-sensitive behaviour and SIM-only offers. We have been bullish on the prospects of SIM-only for some time, but there is a difference between being a leader and 1st mover (Telefonica/O2 and “Simplicity”) and a follower,” he said.

To make matters worse, T-Mobile’s German network suffered a nationwide collapse on Tuesday, leaving nearly 40 million customers without voice and SMS. No details have yet emerged on the nature of the outage, although some reports suggest a “software glitch”. D’oh.

DT will doubtless have been delighted to hear of Viviane Reding’s latest achievements, as the European Commissioner for the Information Society and Media’s proposals for data roaming price caps were voted in by the European Parliament on Wednesday. As of July 1, a text message sent from abroad in the EU will cost no more than €0.11 instead of €0.28 today, and the wholesale price of data will be capped at €1 per MB, compared to an average wholesale price of €1.68 per MB. The wholesale cap will fall to €0.80 in 2010 and to €0.50 in 2011.

Mobile operators will also be required to bill roaming calls by the second from the 31st second of the call at the latest, which will end the current practice under which consumers are overcharged by up to 24 per cent, the authority said. European consumers are expected to save up to 60 per cent on their bill for using a mobile phone abroad in the EU as a result of the caps.

“Today’s vote marks the definite end of the roaming rip off in Europe,” said EU Telecoms Commissioner Viviane Reding. “Thanks to the strong support of the European Parliament and the Council, the new roaming rules were agreed in the record time of just 7 months. Just in time for the summer holidays, European citizens will now be able to see the single market without borders on their phone bills.”

It’s just a shame none of us can afford to go on holiday any more.

Take care

The Informer

Hutch rocks Hanoi

Emerging markets spin off Hutchison Telecommunications International (HTIL) said Wednesday that it will launch its GSM network in Vietnam on Thursday, April 9.

Vietnamobile, which is a partnership between Hutchison Telecom and local operator Hanoi Telecom, will offer GSM services in 64 provinces in Vietnam.

Until recently, Hutchison Vietnam ran a CDMA network owning a miniscule share of the local market, and prompting the partnership with Hanoi and a switch to GSM.

The Vietnamese market is dominated by GSM players Viettel, MobiFone and VinaPhone, with smaller CDMA-based offerings from S-Telecom and EVN Telecom.

Despite the economic chaos, telecoms firms should not let a sensible attitude of caution turn into a bunker mentality. For those with tangible resources available, analysts say a more aggressive strategy is advisable.

This week, industry analyst Ovum predicted that the financial crisis will force a sea change in the telecoms landscape, largely outdating the country-specific telco model.

With the exception of a couple of truly global carriers such as Vodafone and Hutchison, and regional players like Zain and MTN, the vast majority of service providers operate primarily within one country. National rivalries, regulatory hurdles, and other constraints have limited cross border consolidation. And while European carriers have bought into overseas markets, they have rarely integrated operations to maximum effect. The same can be said of carrier consolidation in the Asia region, which, with the exception of SingTel, has been minimal.

Ovum principal analyst Matt Walker, reminds that the collapse of Global Crossing and other subsea network owners, such as FLAG Telecom, during the 2000-2002 bubble burst scared investors away from business models appearing aimed at creating truly global telecoms firms. “Yet telecoms is characterised by significant economies of scale and scope. The industry is not effectively exploiting this fact, in part because it has never been forced to,” said Walker.

Some might suggest that consolidation is bad for competition, but Ovum believes otherwise and suggests that in most countries, no more than three viable, well funded, facilities-based mobile providers are needed for vigorous competition.

“Even with ‘just’ three competitors – which in many industries would be an oligopoly (leading to high prices, poor service, and low innovation) – the mobile industry on the whole has pushed pricing down low, and innovation has been good, with the support of handset makers, third-party application developers, and faster radio interfaces,” Walker said. “So, regulators’ fears of too much consolidation limiting competition should be conditioned by this fact. Maybe it is time to let the buying begin.”

That’s not to say mergers are easy, but the opportunities to pool risk, increase access to capital markets, and better negotiate with suppliers are worthy goals. For those service providers with cash available or the ability to creatively finance, Ovum believes there will be many opportunities to grow inorganically over the coming months and distracted companies will miss prospects arising from the chaos, leaving them unprepared for recovery.

3's a crowd

The Hutchison Whampoa-owned 3G network carrier 3 has a firm toehold in a number of markets and it is a disruptive influence throughout.

Perhaps oddly for a carrier with reputation for launching innovative and disruptive new services 3′s genealogy is steeped in tradition. The parent company, Hutchison Whampoa, was formed in the nineteenth century. The firm takes its name from an early founding father, John Duflon Hutchison, and the site of one of the original business lines at shipping docks and repair yards in Whampoa.

These days, Hutchison Whampoa is a Fortune 500, Hong Kong-based, multi-national corporation with five core businesses; ports, property, retail, energy and telecoms. It turned over $39.5bn in 2007 and according to Forbes magazine the firm’s current chairman Li Ka-shing is the eleventh richest man on the planet.

Hutchison Telecommunications International Limited was formed in 1985 and provides mobile and landline services in Hong Kong and Macau, Indonesia, Israel, Sri Lanka, Thailand and Vietnam.

Hutchison Telecom launched the Orange brand in the UK in 1994 and in 1997 it made an investment in VoiceStream (now T-Mobile USA). In 1999 and 2000, Hutchison Telecom sold its Orange and VoiceStream interests and re-invested the greater part of the proceeds to develop its 3G business.

Hutch spent billions of dollars acquiring 3G licences-a good portion of which went to the UK treasury where the carrier ended up paying £4.385bn. It was not alone, of course; operators everywhere were caught up in the excitement of the rampant growth in cellular communications. A licence to operate was a licence to print money. The next generation of cellular came with the promise of a rapidly rising data curve and an associated revenue return to match-or better-that of voice.

Globally, Hutchison Whampoa has 3G operations in Australia, Austria, Denmark, Hong Kong, Ireland, Israel, Italy, Macau, Sweden and the UK. The carrier markets its services under the global brand 3 with the exception of its Israeli operation, which-confusingly-is branded Orange and owned by Hutchison Telecom International.

The firm also has the right to operate 3G services in Norway, having paid $8.23m in 2003 for a 12-year licence. It has yet to start up operations, though the carrier is obliged to provide 30 per cent population coverage by September 2009.

Providing 30 per cent coverage in Norway could be achieved with relative ease by providing services in just four of the country’s largest cities. Gaining market share would pose some serious challenges, though. The country has a population of 4.7 million and teledensity is well above 100 per cent. The two dominant carriers-Netcom and Telenor Mobile-already have 1.5 million WCMDA subscribers between them.

Hutch 3′s global positioning is a far cry from ‘the one world, one carrier’ image that some operators like to portray. The convoluted ownership set up, complex history and sporadic footprint-not forgetting its new entrant, new technology status-made presenting a unified strategy all the more challenging.

As a new entrant coming into well established 2G markets 3 needed to offer some keen price incentives to attract subscribers. The generous early tariffs worked their magic and people signed up in droves. The carrier had attracted over 10 million subscribers worldwide 18 months after launch-and this in markets that were at or approaching saturation.

Unfortunately for 3 the people lured into churning on the promise of cheap voice turned out to be people unwilling to pay for expensive data services. Still, building a subscriber base was the intention and it worked.

It would be fair to say though that 3′s early services met with predictable teething problems. Early marketing campaigns were as eye-catching as they were misleading. Video calling was to be the next big thing. Except it wasn’t.

Using Gartner’s hype cycle model, the 3G auctions occurred at the very peak of inflated expectations. Indeed, the auctions served to force that peak ever higher. The years that followed 2000 would see expectations for 3G suffer set back after set back as they tumbled towards the trough of disillusionment.

Early handsets, supplied by NEC, were cumbersome and tended to suffer from early chronic breakdown. Coverage, even in cities, was patchy in comparison to rivals’ 2G services. Industry lore has it that in a bid to persuade the top brass of the firm’s footprint, the travel itinerary of Hutchison Telecom chairman Canning Fok was handed over to engineers who deployed kit to ensure that he had perfect coverage everywhere he went.

Things improved though over time. The choice of handsets grew and the coverage became more reliable. But 3′s initial burst of growth slowed. The carrier was undergoing an image overhaul. Describing itself as a mobile media company, it spent its time signing content deals with music and gaming firms.

In June 2001, for example, the carrier signed an agreement with England’s FA Premier League to secure the rights to provide top-flight football content to mobile phones and handsets in the UK. This sort of exclusive deal had been the making of the broadcaster Sky, but when the mobile carrier launched in 2003 watching football on mobiles was not that well received. Similar deals were inked in Australia (cricket) and Sweden (ice hockey). Exclusive content deals would not prove to be particularly attractive to potential new subscribers.

Admiring glances were being cast in NTT DoCoMo’s direction as carriers everywhere tried, and failed, to emulate the Japanese number one operator’s success with i-mode.

In 2003 the 3 Group announced an agreement with DoCoMo to co-operate in the development and promotion of 3G services on an international basis. This agreement initially united the research and marketing capabilities of the two companies. At the time the Japanese carrier held a 20 per cent stake in Hutchison 3G UK. Though in 2004 DoCoMo exchanged its stake in 3UK for a stake in Hutchison Telecommuncations International. In 2005, 3 Hong Kong announced the launch of the first bilateral International Multimedia Messaging Service (IMMS) with NTT DoCoMo, enabling 3′s 3G and 2G customers to exchange multimedia messages with NTT DoCoMo’s i-mode customers.

3UK continued to innovate and in July 2004 teamed up with the record company BMG to launch the first ever mobile video jukebox enabling customers to stream music videos direct to their mobiles. The carrier would also be one of the first to come to market with ‘dual download’ for music so that every audio track its customers download to mobile handsets would also be available to them online for no extra charge.

In 2005 3 Italia jointly announced with Rai the launch of the first TV channel in Italy created exclusively for UMTS videophones then later acquired Channel 7 to become the first mobile media company in Europe to own a national digital TV licence. And also in that same year 3UK launched See Me TV offering subscribers a chance to earn cash in exchange for video contributed by customers.

However, video jukeboxes (or similar) and dual downloads would soon be launched by 3′s rivals, who-it seems-while slow with 3G were not quite standing still. Shortly after See Me TV went live came Look At Me on the O2 network. The two offerings both used the same Yo Space platform, which would later be merged and offered up to both sets of subscribers under the name EyeVibe.

The carriers’ walled garden portals were generating comparatively small trickles of income, and thanks in part to unappealing revenue splits between content producers and the MNOs, the level of innovation was lacklustre. Like its rivals 3 would come to realise that it is, first and foremost, a communications company, not a media player.

The firm would now embark on a series of group-wide communications initiatives. In February 2006 3 Group and Skype, at the time the fastest growing internet communications company, announced an agreement to enable the latter’s voice over IP communications on 3G. In March it announced plans to deliver access to Microsoft’s Messenger and Hotmail through the 3 portal and installed software clients on 3G handsets. In June it announced an agreement with Yahoo to integrate the internet firm’s search, web and messaging service into its mobile offering.

Then in November 3 announced the global launch of the X-Series range of handsets. 3 Group, in partnership with Skype, Sling Media, Yahoo, Nokia, Google, eBay, Microsoft, Orb and Sony Ericsson promised to deliver a coherent mobile internet vision. Vitally, the X-Series also came with flat fee data tariffs.

Continuing the global operator vision in January 2007 3 Group announced the introduction of 3 Like Home. A new pricing policy that permits 3 customers to travel abroad and use other 3 Group networks for a price similar to that on their home network.

Then in October 2007 3 and Skype launched a new handset 3 Skypephone that provides free Skype to Skype calls and enables free Skype instant messages to other Skype users. The firm has sold over 100,000 Skypephones in the UK since launch and generates over one million Skype minutes every day.

Data finally over took voice in terms of volume in December 2007 and it has kept on climbing. The carrier says it is now eight to ten times the volume of the capacity used by voice. And in the UK 3 is planning for a 60-fold increase in backhaul this year. The growth is being driven primarily by USB dongles. In order to cope with the growth and improve in-building coverage the carrier has entered into a network sharing agreement with T-Mobile. Boosting the number of cell sites from 7,500 to over 13,000 at no extra cost.

The overall drive for the business these days is the continued mobilisation of the internet. There have been number of changes in direction for the carrier over the last five years as a range of different factors influenced the industry.

The billions paid for 3G licences at the turn of the century still seem steep but 3 is well positioned as the industry’s chief disruptive influence. Returning to Gartner’s hype cycle-thanks to the relatively recent advent of flat fee data tariffs, more affordable and presentable handsets, and mobile broadband dongles-3 is now heading steadily up the slope of enlightenment.

3 subscriber projections worldwide

Source: World Cellular Information Service

Egyptian carrier Orascom Telecom said Thursday it has reached an agreement to sell its remaining shares in Hutchison Whampoa’s emerging markets unit.

Orascom will sell its 14.2 per cent holding in Hutchison Telecommunications International Ltd (HTIL) for around HK$7.5bn ($960m).

Hong Kong conglomerate Hutchison Whampoa will re-acquire 9.2 per cent of the stake and a company called Yuda, owned by Hutchison head honcho, Li Ka-shing, will take the remaining 4 per cent.

Orascom acquired a 19.3 per cent interest in HTIL from Hutchison in 2005 for a total of $1.3bn. The Egyptian carrier sold 5 per cent of the holding for $327m earlier this year.

So Orascom only made a total of $1.287bn on the resale of the full stake but it also received a special cash dividend of $793m from the proceeds of HTIL’s sale of its Indian subsidiary, Hutch Essar, to Vodafone earlier this year.

This gives Orascom a tidy profit of around $780m from the transaction.

Naguib Sawiris, chairman and CEO of Orascom the company’s initial acquisition of HTIL shares, “was to gain exposure to the Indian market, however, after the sale of the Indian asset [Essar], the investment in HTIL became of less strategic value.”

Orascom had been one of the original runners in the bidding for Hutch Essar but it was Vodafone that eventually came out on top with a bid of $11.7bn.

“With the proceeds of the sale, OTH will evaluate investment opportunities including acquisitions of new licenses and established operators of substantial size, as well as evaluating opportunistic repurchases of its GDRs in light of favorable relative market valuations,” said Sawiris.

GeekTV will provide a mix of content designed specifically for the mobile, as well as proper television shows, including ‘American Dad’ and ‘Miami Vice’.

User generated content is also planned via 3′s SeeMeTV service, which will lure users into creating content by offering them a spot on the service and a cash prize.

The channel is updated weekly is an opportunity for 3 UK to promote videos that can also be downloaded as individual episodes elsewhere on 3′s portal. As an example, mobile users might see an episode of Player X’ “Dom Joly show” on Geek TV and then go and buy the others from the portal to download.

The channel is available now after launching in the first week of December and its user-generated content is augmented by a geekTV sub-section on 3′s SeeMeTV platform. 3 UK customers can send in their clips by texting 3geek to 34335.

Tony Pearce, Player X’ CEO said: “We are talking to more operators and also to handset manufacturers because we’re convinced this channel is an important addition to the mobile content area.”