Hutchison buys three million 3G handsets

Hutchison Whampoa, the Hong Kong conglomerate, has bought 3 million handsets to supply its third generation (3G) mobile phone businesses including 3UK, which will receive 1 million of the new phones.

Hutchison Whampoa, the Hong Kong conglomerate, has bought 3 million handsets to supply its third generation (3G) mobile phone businesses including 3UK, which will receive 1 million of the new phones.

The deal, placed with South Korea's LG Electronics, reveals the ambitious growth expectations that Hutchison has for its UK business and also the increasing dominance of Far Eastern handset makers in the battle for the new 3G phone market.

This week Vodafone began its European 3G phone operation in Portugal and Germany with handsets supplied from Samsung and Sony Ericsson.

Although Nokia, the world's biggest manufacturer of handsets, will eventually supply large number of 3G handsets, it has already fallen behind its Asian rivals in their early supply to what is seen as a crucial growth market for both handset makers and network operators.

Hutchison said the agreement with LG envisages delivery of the 3 million handsets over the course of 2004. At its results announcement in March, the company said its 3 UK operation had 361,000 customers, up from 210,000 in December. Its customer base has grown thanks to improved handset availability and more aggressive pricing tariffs.

The new LG phones will offer the normal range of 3G applications including video calls and messaging, video streaming, and picture and text messages as well as e-mail facilities. The new handset is a clam shell design and rivals current mobiles in terms of size, shape and weight, 3UK said yesterday.

3UK is generating average monthly revenue per user of £45 of which 85 per cent comes from voice calls rather than the revolutionary data services that 3G services were supposed usher in.

A 3UK spokesman said: "We have a higher average revenue per user so 15 per cent of that for data services is a bigger number than other operators. What new technology should do over time is give you more for less."