[3GScottishUser]

Hutchison Whampoa Ltd is a year behind target in its UK third-generation mobile phone operations and expects its overall 3G business to be cashflow positive in 2008, chairman Li Ka-shing told Forbes.

"With 3G, we are facing more competition than we originally expected, and we are slightly over one year behind budget in the U.K. But we are doing well in other locations, such as Hong Kong, Australia and Italy," Li said in a transcript of an interview posted at www.forbes.com.

Shares in ports-to-telecoms conglomerate Hutchison, which is spending roughly US$25 billion (12.8 billion pounds) to build out its third-generation mobile phone business, fell 2.2 percent on Thursday to HK$79.85.

Hutchison has been the most aggressive investor in multimedia-enabled 3G telecoms in Europe, but the loss-making business has been a drag on its share price since 2000.

Li said in the interview conducted on December 4 that the company had 14 million 3G subscribers globally, and that the Italian 3G unit would be its first to become profitable.

"Despite strong competition, our losses are narrowing every year, while our revenues are increasing. The handsets are better, nicer, smaller, quicker," Li was quoted as saying.

"It's only a matter of time before we reach profitability. The loss in 2006 was much less than in 2005, and the losses will continue to narrow in 2007. And we will be cash flow positive in 2008," he was quoted as saying.

"In telecommunications, another one or two years is nothing. It is a growth business, and we expect 3G to be a major contributor to our group in the future."

http://today.reuters.co.uk/news/articlebusiness.aspx?type=businessNews&storyID=2007-01-04T045848Z_01_HKG130586_RTRUKOC_0_UK-TELECOMS-3G-HUTCHISON.xml

[Hands0n]

They're talking it up so ...... either they're hanging on to it or making it look like a good sell to a prospective buyer. 2008 is not so far away in such terms. I think that 2007 will be a defining year for 3, one which will cultivate the seeds of their ultimate success or demise.

[3GScottishUser]

Recent 3 UK changes

Imminent change of CEO.

High profile head office redundancies.

Group CEO and CFO holding the reigns.

Major dealer cull.

Changes in contract pricing (new customers Direct Text + Talk increased).

Changes in Terms & Conditions re downgrading.

Enforced Direct debits for new contract customers.

Higher credit scoring requirements.

All of the above sends a bit of a mixed message but most of the changes seem to suggest 3 UK are repositioning themselves. They are no longer simply throwing money at the market to gain subscriber numbers, not now at least!

What about the other issues?

Lack of any convergence partnerships.

Very limited exposure in the pre-pay sector.

Offshore customer support remains a big issue.

Lack of newer handsets and newer services in dealers.

Still no real attempt at addressing business customers needs.


Li says he thinks the UK is 'slightly over a year behind' and that is a significant period to recover. As things stand with all the new restrictions, limited dealer support and little pre-pay activity 3 UK will become a much smaller niche player in the next year or so. Where they go from there is anyone's guess but at least they will have a solid foundation to build on rather than the empire they have built on sand they have now that is totally unsaleable.

[Hands0n]

It really saddens me that at no time, ever, have 3 acknowledged the [negative] impact that their offshore Customer Service has had. They, instead, blame low quality Customers, or the "wrong type of Customer" as the rail services blame the wrong type of snow! It is all shouting into the wind, a waste of breath. They should take a hard look at the background to their Churn statistics, find out why people are leaving. Not the headline "it don't work" reasons, but the "your CS team do not help make it work" reasons that the forums of the Internet are alive and still buzzing with.

Regardless of the technological background to 3G, without an effective CS operation it is all worth nought!

[3GScottishUser]

Is it not a simple case of you reap what you sow?

The hash bash of the last three years is now attempting to be be rectified by bigger bosses at HWL as they know they need something tangable to sell on sooner rather than later.

It looks like they have come to the conclusion that a wee bit of quality is better than a lot of rubbish! Only problem is that the wee bit of quality will be hard to satisfy with the service levels designed to cater for the 'rubbish' that they piled on previously. I just dont understand how they expect to change their fortunes without changing the way they take care of the customers they atrract to their service.

[Hands0n]

And that would appear [to me] to be their Catch 22.

I would have been one of their "better quality" customers as my spend would have been higher than their average - and they'd have had the entire family over too, had they at least satisfied me. They didn't, very many times, and so they lost five contracts here, and probably dozens more through my advice to extended family and friends to use any other network than 3. One didn't follow my advice and [predictably] got burned, another did likewise and is unhappy with their service/repair quality (on their 5th Nokia 6280 and won't be allowed a change/upgrade without charge!). All of the issues required a coherent and competent CS to resolve, none could be found within 3. Now it is too late.

With Fuller and some of his cohorts gone things may improve if, and only if, the new incumbents take the time out to find exactly why their CS is so highly criticised globally. That, and to actually do something about it. Will they? I doubt it, as from their rarefied atmosphere of the boardroom they are too remote and shielded [by their raft of middle management] from the ordinary Customer to ever know the truth. If they persist in the "low quality customer" notion, their demise will be entirely predictable.

Eschewing the disreputable dealer network has been a good start, it will have a positive effect - but it will take a credible CS to maintain that Customer base, or they'll walk at the first opportunity.