[3GScottishUser]

LONDON/MILAN, Nov 4 (Reuters) - Hutchison Whampoa (0013.HK: Quote, Profile, Research) is talking to its banks about whether its Italian 3G mobile business can be listed at the price they have valued it at, sources familiar with the company said on Friday.

One source said the company is considering postponing the initial public offering. Another said some bankers were confident that, although the price may have to come down, the deal can still get done this year.

The company has not decided yet, but is worried it may not achieve the 12 billion euro valuation that it and bankers first put on the business, the sources said.

IPOs in Europe have fared poorly over the last month as investors digested a recent glut of new deals and hedge funds, usually big buyers in flotations, pulled back.

The 3 Italia IPO process, which was looking to raise up to 2.5 billion euros, was initially scheduled to begin in December.

Italian newspaper Il Messaggero reported on Friday that the IPO could be postponed until 2006 after a meeting earlier this week between banks arranging the offer.

But Hutchison denied it planned to delay the IPO.

"Our bankers and advisers are continuing to work with us on this IPO process, which is targeted to be completed by the end of the year," said a spokeswoman for the Hong Kong-based conglomerate. "Of course, everything is subject to market conditions."

The 3G IPO, which would be the biggest in Italy this year, has been seen as expensive by analysts and fund managers for some time.

Analysts estimate that an enterprise value of 12 billion euros would value 3 Italia at an EV/EBITDA multiple of roughly 15 times -- well above an average for European mobile firms of about 7 times.

Analysts have been speculating that the IPO might be delayed, which could also have repercussions for 3 Italia's UK sister, 3 UK, which had been expected to make its market debut next year in the wake of 3 Italia's flotation.

Some analysts have even suggested that Hutchison might prefer to sell 3 UK to German telecoms giant Deutsche Telekom (DTEGn.DE: Quote, Profile, Research), which is keen to bolster its UK business but decided this week not to counter a 17.7 billion pound bid for UK-based mobile phone group O2 Plc (OOM.L: Quote, Profile, Research) from Spanish telecoms group Telefonica.

http://today.reuters.com/business/newsArticle.aspx?type=telecomm&storyID=nL04625661


Comment: Would Brian McBride and his team want to inherit 3 UK in it's current form. I doubt if they would be prepared to pay a great deal for the company as they have not been victim to much in the way of loss to them over the last 32 months. With consolodation on the horizon this could be one of a number of possibilities but would be heavily dependent on the price etc to make commercial sense.

[Ben]

All I can say is 'I hope not'. As far as the consumer is concerned, five networks is better than four. Still, 'some analysts' are not enough to actually make this happen but it's certainly a logical thought.

It'd give T-Mobile a huge 3G advantage... I don't understand, personally, why Deutsche Telekom are looking to bolster their UK business when T-Mobile is already plenty large enough and, if they wanted to be anything other than completely dull for once, they could easily build up renewed momentum on their own.

[rabmc]

i disagree Ben... 4 networks would be better than 5... reason being the networks have more of a chance to make profits... and in turn offer better/cheaper services...

just now they are all pretty much running at a loss trying to recoupe the costs of the umts licenses....

also i remember reading somewhere just after the sale of the licenses that some critic/analyist did mention that the UK is too small to have such a number of networks... also thinking on saturation of the market etc i don't think this is too far off the truth..

as for T-bag buying 3Uk... i think it would be unlikey. and they are basing this on purely the thoughts that they wanted to buy o2.....

but as 02 is for sale isn't it also selling off it's network in some other country... i think that's why DT were interested. Not purely for an expansion to the existing UK network.

Think of the losses T-bag would incur, mainly froma network build point of view if nothing else.. Duplicated coverage on UMTS if they did buy 3UK... The costs of maintaining 2 different networks.... etc...

can't see this one going ahead....

/rant over:)

[fat jez]

If you remember what happened with the whole Orange/Mannesmann/Vodafone/France Telecom business, when Vodafone aquired Mannesmann they had to sell Orange as they were not permitted to have 2 licenses to operate in the UK. So if T-mobile were to aquire 3, they would have to hand back one of their licenses. I can't see them writing off the several billion that the license is worth easily, although I am prepared to be proven wrong :)

Cheers,
Jez

[3GScottishUser]

Ofcom works quite differently from its predecessor Oftel. Ofcom can listen to proposals then ask the DTI and the competition commission to assess any takeover and if there are no serious consequences raised permit consolodation. This has been happening already with commercial TV, radio and cable and I expect similar to happen with mobile telecommunications.

Never say never, as goalposts can move!!

[Hands0n]

It would be a pity of we went back to the big-4 days of mobile operator. Even today competition in tariffs between them is almost irrelevant, save for some nice nuggets to be had. It took the arrival of a 5th mobop to even begin to shake the incumbents out of their commercial malaise.

Regardless of 3's problems as a start up they are now a viable mobile network operator, and anyone who witnessed the birth pains of Orange and One2One will see the similarities. 3 do still suffer with public confidence in their Mumbai CS operations.

I would like to see 3 continue to run as a 5th mobile network operator - any merger into the four will be a disaster for Customer choice. We should not welcome any such merger lightly.

[Trix]

Ok, Im a little confused? (doesn’t take much) What does this mean for the average consumer, as I am looking to start a 3 contract as soon as the 6280 comes out. Should I be worried? Are 3 heading for troubled waters and further price hikes?

And what would happen to the 3 network if T-Mobile did buy it? Would 3 customers receive a letter saying ‘you now belong to T-Mobile’ or would 3 stay the same, stay as a separate entity, just lining the pockets of the T-Mobile bigwigs instead?

Or would they merge both companies into something cheesy like ‘3-Mobile’ ???

:confused: :confused: :confused:

[3GScottishUser]

Everyone is protected by their Terms and conditions and if prices changed you would be able to do what many are already doing now in light of the recent call price increases and terminate giving 30 days notice. Its all very speculative but some changes are to be expected in 2006 as it appears that the 5 networks and numerous MVNO's are finding the market too compeditive to make a realistic return.

What we are seeing now is the end of the begiining of the introduction of 3G and the beginning of the end of the 'crazy prices' period.