When 2.5 became 3

4 Mar 2003

Hutchison Whampoa, the Hong Kong-headquartered communications multinational, yesterday launched its third generation (3G) service in the UK – after much chronicled delays to its rollout.

The company, which has battled with a number of hold-ups since 2001 including poor communication between different phone netwroks and a number software glitches, chose the auspicious 03.03.03 to announce the first phase of 3G’s availability there.

This third generation mobile service will provide full-motion, colour video images and other advanced services to the mobile handset. It is branded on the market as ‘3’.

Ed Brewster from the external affairs office of 3 UK was quick to reject the ongoing media references to delays in rollout, saying this was something that was the inevitable lot of ‘path-finding’ businesses such as Hutchison Whampoa.

Speaking to siliconrepublic.com he said: “3G is a new technology and it’s taken as long as it has because that’s how long it takes to get it right.”

The company, which along with O2 and Vodafone holds a 3G licence in Ireland, is due to roll out in this country by the end of this year – it is required to be up and running by 1 January, 2004.

When the application deadline for four licences arrived last March eyebrows were raised when only three took up the offer – Vodafone, O2 and Hutchison. One remains to be bagged.

3G, which provides much more bandwidth than is currently available on 2.5g, allows callers to see each other and send video footage using their phone.

Although the new 3 service is formally ‘open for business’ in the UK today, the company is currently only taking orders for the new handsets and it anticipates that the service will go live in the next couple of weeks or so.

Since yesterday UK high street shops Dixons and Carphone Warehouse began taking orders for the handsets along with 3 UK’s own retail outlets.

Brewster told siliconrepublic.com that so far demand had been “in line with expectation”.

Since it successfully acquired a licence Hutchison has been hyping up the planned service by advertising the rights it has bought to UK premiership goals, allowing footie fans to get mobile video replays of goals in the boardroom.

It has signed off on rights for the season from 2001 to 2004.

The cost of the purchase is estimated at around £50m sterling.

According to Brewster, although there is a lot of sharing of costs between different geographical branches of Hutchison Whampoa’s global business in 3G, content isn’t necessarily included because markets obviously differ.

However, it’s believed, although not confirmed, that because of the ‘natural synergy’ between the UK and Ireland the same service will be marketed over here.

One of the most difficult problems in the rollout of 3G has the problem with so-called ‘handover’ from 2.5 to 3G – how to get the two services to communicate with one another.

Brewster, however, said that the handover issue was an industry-wide difficulty which all the operators were working on. He said the problem had now been solved, but had yet to be implemented across the network due to software issues.

Ireland’s other operators, unlike 3, have strong revenue from 2.5G phones, but Hutchison Whampoa only provide the 3 service, so the resolution of this issue will be important to the long-term success of the project.

The arrival of Hutchison Whampoa’s 3G service in Ireland is being seen as a welcome addition to a market which is effectively a duopoly.

Launches under the 3 brand are also planned for Sweden, Hong Kong, Australia, Austria, Israel and Denmark this year and Hutchison hopes to sell around two million new phones in Europe by the end of 2003.

The handsets are on sale in the UK for around £400 sterling (€580).

By Suzanne Byrne