Superdrug to start selling 3's phones

Britain's fifth mobile phone operator, 3, is expected to start selling its next-generation mobile handsets in about 20 Superdrug stores as soon as next month.

The new service, which launched three weeks ago in the UK, has been on sale in its three stores in London's Oxford Street and High Street Kensington and in Birmingham as well as in specialist phone retailers.

So far, the company has sold around 10,000 of the mobile phones, which cost between £399 and £449 each, and has recently started to deliver them to customers.

3 is spending tens of millions of pounds advertising and marketing its third-generation service this year. The service, which allows users to make video calls and watch video clips, is the first of its kind to launch commercially in the UK.

Hutchison Whampoa bought the Superdrug health and beauty chain as part of a takeover of its Dutch parent, Kruidvat, last autumn.

Last week, Hutchison, the ports-to-telecoms conglomerate that owns 65 per cent of 3, said it was preparing to give its 3G operation another £800m of funding.

3 is hoping to raise another £1bn from its shareholders on a pro rata basis, meaning Hutchison would have to commit £650m, Japan's NTT DoCoMo would need to stump up £200m and KPN Mobile would have to pay out a further £150m. Hutchison has said it will honour its commitment and will also pay KPN's share if the Dutch group, which owns 15 per cent of 3, refuses to support it. NTT DoCoMo, which has a 20 per cent stake, is expected to support the fund raising.

Last week 3 UK announced it had signed agreements to extend its loan facilities by a year to March 2005 with a syndicate of 16 banks and its equipment suppliers as well as Hutchison. Tim Pennington, finance director of 3 UK, said: "In a difficult financial market the package of measures we put together, combined with the recognition of 3 UK's full compliance with all existing banking covenants and the support of our shareholders and suppliers, meant the proposals were extremely well received."