Hutchison Whampoa promised a pre-Christmas attack on the UK mobile phone market yesterday as it seeks to reach its target of one million users of its third-generation mobile service by the end of the year.
Hutchison said that its 3 service had signed up 155,000 users in the UK since the launch of video-enabled phones in March. It claimed it would reach its million target by offering a pre-pay service before Christmas as well as lower prices and new handsets.
Industry experts were sceptical the Hong Kong-owned company would succeed. Some claim that Hutchison has virtually sold out of the phones in the UK and it will take several weeks for additional stocks to arrive in the shops.
Hutchison has ordered 3 million more phones for autumn and winter in its main markets of the UK, Italy, Australia, Sweden and Austria.
The move is part of the company's $16.7bn (£10.5bn) bet that consumers are willing to pay for new mobile handsets that will enable them to watch video clips of their football team's goals as well as beam pictures of themselves to recipients of their calls
Hutchison has cut prices and introduced new models since March to boost demand. It is also offering two services, VideoTalk500, which costs £25 a month and includes 500 free minutes of calls. VideoTalk750 costs £35 a month and offers 750 free minutes. These tariffs undercut rivals by as much as 50 per cent. "We are happy with the progress so far," a spokesman said.
It said the launch of a pre-pay option was crucial as these services account for 60-70 per cent of the market. A spokesman added that there will be at least three new video mobiles launched before Christmas, including a new version from Motorola that features a wide screen. The phones are now available in 2,500 retail outlets in Britain, including 70 mini shops within branches of Superdrug, the chemists chain, which is now part of the Hong Kong conglomerate.
The plans were revealed as Hutchison Whampoa, run by billionaire entrepreneur Li Ka-shing, reported a total pre-tax loss of $500m on the new 3G services during the six months to June. The 3G services now have 520,000 users worldwide, including 300,000 in Italy.
It also said that it plans to list its fast-growing mobile phone operations in India next year, as well as its Hong Kong fixed-line telecom business.
Vodafone announced yesterday the sale of its Japanese fixed-line telephone business to American investment fund Ripplewood for £1.4bn.Japan's landline market has been hit by a pricing war and an exodus of users to mobile phones. Vodafone wants to focus on its key mobile business, J-Phone.