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To: 49thMIMOMander who wrote (25114)	6/6/2003 12:37:22 AM
From: elmatador	Read Replies (1) \| Respond to of 34857

Hutchison 3G (in the UK) Published: Jun 5 2003 19:59 \| Last Updated: Jun 5 2003 19:59 Hutchison 3G has stepped back in time. Having failed to wow customers with new age video services, the mobile start-up is undercutting rivals on good old-fashioned voice calls. The move is little surprise. Hutchison 3G - branded as "3" - signed up a mere 25,000 subscribers between early March and late May. It launched too early. Clunky handsets, feeble battery life, poor network coverage and uncompelling services have contributed to the poor uptake. The operator was already subsidising handsets. With the target of 1m UK subscribers by the year end looking more fanciful by the day, the new management team has pulled the obvious lever to get traffic on to its almost empty network. It is a serious risk. It moves 3 towards the mainstream market. Its prices are likely to attract promiscuous bargain hunters, and the operator will struggle to regain its desired premium positioning. As 3G handsets and coverage improve, rivals such as Vodafone will launch their services with the advantage of customer bases they can migrate across. It will not be easy for 3 to raise prices. That does not make it good news for rivals. 3 is too small to affect industry pricing now. But, given its cash pile, the operator should be around for some time. As 3G handsets and coverage improve, 3's lower rates will look increasingly attractive. Rivals such as MM0 and Orange, with heavy UK exposure, are unlikely to emerge with their margins unscathed.