Hutchison joins mobile phone war: Company aims for 90% coverage by 1995 with pounds 700m investment in 'Orange' network

HUTCHISON Telecom, part of Hutchison Whampoa of Hong Kong, is to launch a national mobile telephone service at the end of next month. The service - called Orange - will cover 90 per cent of the population by mid-1995 and involves an investment of pounds 700m.

Orange will compete with Cellnet, Vodafone and Mercury One-2-One, the joint venture between Cable and Wireless and US West. Hans Snook, group managing director of Hutchison Telecom in the UK, said: 'Orange will open up a new market in the UK telecoms sector by providing a national telephone service that is simple, affordable and accessible.'

He has no plans to follow Mercury One-2-One's lead in offering free off-peak local calls. 'Free calls are commercially a non-sustainable proposal if we are to get a return for shareholders and re-invest in the network,' he said. Details of the tariffs will be announced nearer to the launch.

Orange will be a digital service with a range of options. These include the ability to have two lines per telephone - one for home use and one for business - with different bills and ringing tones for each. The telephones will also allow users to identify who is calling them by showing a name or number on the display, although this needs to be approved by the regulator, Oftel.

Some analysts said that the entry of Hutchison will force Mercury One-2-One to accelerate its expansion. One-2-One was criticised at its launch last year for concentrating on the area around London and the M25, although it is now establishing itself in the Midlands and several large cities around the UK. Orange said it will cover 50 per cent of the population from day one, including full service in the London and M25 area, extending to 70 per cent of the population by the end of this year.

Mr Snook said that Orange, formerly known as Hutchison Microtel, will be profitable by 1997. He said British Aerospace, which has a 30 per cent stake in Hutchison Telecom in the UK, is supportive of the venture. At one stage BAe had been trying to sell its stake.

Hutchison Telecom is already one of the largest mobile telephone service providers in the UK, buying airtime from other mobile operators and selling it to customers with equipment. The company also has a paging operation. Last year, it abandoned its low-cost Rabbit portable telephone, which allowed users to make calls but not receive them.

Industry sources say there will be up to 12 million mobile telephone users in Britain by the end of the decade.