War and rumours of war

6 June 2003

Deepdiscounting voice calls was the 3G pioneer’s weapon of last resort. It has deployed it after just three months of operations. The Hutchison outpost may have unleashed a price war that will damage all mobile players if it doesn’t collapse first.

This content is for Subscribers only

Context News

Three, the 3G mobile startup in the UK, has announced new price plans that undercut competitors for voice calls by up to 50%. It is to offer 500 minutes of voice calling for £25 a month, and 750 minutes for £35 a month.

The new UK mobile operator is reported to have some 25,000 customers after three months of operations. Its Italian sister company has 60,000 subscribers. Both had set themselves a target of around a million subscribers roughly a 5% market share by the end of 2003.

Three UK is 65% owned by Hong Kong conglomerate Hutchison Whampoa, with NTT DoCoMo and KPN owning 20% and 15% respectively. It recently raised £1bn through a shareholder loan to which KPN declined to contribute. KPN has already written the value of its stake in Three UK down from E1.5bn (£1bn) to E0.3bn (£0.2bn), while DoCoMo wrote off about threequarters, of its investment.

Colin Tucker, Three's cochief executive, said in May that the company was well ahead of its business plan. A number of senior executives have been removed from the company following its initial marketing launch.

Context News

Email a friend

Please complete the form below.

Required fields *