A couple Hutch articles:
Strong sales leave Hutchison with handset shortage
June 30, 2004
3gnewsroom.com
Hutchison Whampoa could face a shortage of 3G handsets for the second time as subscribers rush to sign up to its service. This shortage comes as demand for its service is "very strong" and it is signing up more than 10,000 customers a day.
"The only thing we really worry about is a handset shortage," said Hutchison Whampoa managing director Canning Fok at the launch of its latest 3G handset, the LG 8120 for the Hong Kong market.
The LG8120 model is priced at HK$1,680 for a 12-month, HK$183 a month service contract. The price is cheaper than some of the top range 2G handsets in Hong Kong.
Hutchison's first handset shortage happened before Christmas in Europe when handset suppliers were late in delivering new handsets that were desperately needed to attract new customers. The shortage affected the company's sales during the Christmas period. This also lead to the company failing to achieve 1 million customers in both the UK and Italy.
Hutchison has launched its first LG handset last month in other markets. The LG 8110 was Hutchison's best selling phone in the UK for May.
On the back of strong sales, Fok is looking for the company to break-even in earnings before interest, tax, depreciation and amortisation before the end of 2005.
Hutchison has been using aggressive pricing to win customers and some estimate the company's customer acquisition cost was about US$1,000 each. Fok did not give details on the customer acquisition cost but said it was "substantially" lower than the US$1000 estimate.
The group has 1.73 million 3G subscribers globally, with 84,000 customers in Hong Kong. Rival operators CSL, SmarTone and Sunday are expected to launch their 3G services in Hong Kong later in the year.
--
Hutch sounds 3G price war warning to rivals
thestandard.com.hk
Hutch sounds 3G price war warning to rivals
Georgina Lee
By pledging to push prices even lower, Hutchison Telecom has fired the first shot in what is likely to turn into a 3G price war when rival operators CSL, SmarTone and Sunday launch their third generation services.
Group managing director Canning Fok said Hutchison, which has a six-month lead over its rivals, will ``persist in its strategy of being competitive [in pricing]; and if we can continue to drive down costs, we'll be even more competitive''.
He was speaking yesterday at the launch of the group's fifth 3G mobile phone, the LG8120.
Asked whether the 3G launches of Hutchison's three rivals later this year would spark a new wave of price cuts, Fok said: ``Although I don't like price cuts - and I'd prefer to raise prices - the market is not tarnished [by price cutting].''
Hutchison became the first operator to roll out 3G in January and the market has since been closely monitoring how the company prices its high-speed data mobile services. Operators have been banking on 3G services to provide more lucrative profit margins.
However, with mobile tariff plans as low as HK$123 a month, and lukewarm market demand for advanced data applications such as video calls, video streaming, multi-media messaging services, tariff plans have been priced at levels similar to 2G services.
The plans even offer sweeteners of bonus voice minutes due largely to the Hong Kong market's slow adoption of the short messaging service (SMS) and e-mail.
SmarTone, Sunday and CSL have all said that they intend to launch their 3G services by the end of this year.
With Hutchison's low pricing of 3G mobile handsets on contracts as long as 12 or 18 months, there are concerns in the market that rival operators may not be able to price 3G services so as to earn a higher average revenue per user.
Fok brushed aside as speculation claims by analysts that Hutchison is offering low handset prices because of heavy subsidies.
``You'd never know about our handset costs, and thus what the market thinks is not reflective of our actual costs, '' said Fok, indicating that the group has strong bargaining power with its handset vendors including NEC, LG Electronics, Motorola and Nokia.
The LG8120 model is priced at HK$1,680 for a 12-month, HK$183-a-month service contract. This compares with a price tag of 199 euros, or HK$1,884, in Europe for the same phone.
Fok said the group has ordered two million LG8120 phones from South Korean manufacturer LG Electronics, and it will order another million units over the winter.
``Our priority now is to sail through this summer season, with sufficient supplies of handsets,'' Fok said. The group has 1.73 million 3G subscribers globally, with 84,000 of them in Hong Kong.
1 July 2004 / 02:21 AM |
