Hutchison 3G set for October launch

Hutchison 3G, the newest player in the British mobile phone market, yesterday sought to dispel widening concerns over the quality of its forthcoming third-generation phone services as it revealed that its launch in the UK and Italy was slated for October.

Canning Fok, managing director of the group that will brand itself 3 when its 3G service goes live, said he aimed to sign up between 5,000 and 10,000 users in the first month in each market.

Mr Fok said "dropped calls" – when the user's conversation is disconnected from the network – were inevitable in the early stages of the launch. "We don't think [they] are a problem since every network has dropped calls," he said.

Hutchison, which has yet to sign up a customer and until yesterday had been very secretive about the launch of 3, will be the UK's first mobile phone operator to provide a 3G service. Most telecoms analysts expect the group, which paid £4.4bn for an operating licence in April 2000, to face an uphill battle in persuading customers to shell out for the expensive new handsets, which are still being perfected.

The group, which is 65 per cent owned by the Hong Kong conglomerate Hutchison Whampoa, said the 3G network would initially cover 45 per cent of the UK. Customers chatting on a 3G network can expect their calls to be dropped when they enter an area covered by a 2G network, Mr Fok said.

However, a spokesman denied this would be a major problem, pointing out that 3 would be targeting people who live and work in city centres, which will have 3G coverage. "It's a handset issue that will be solved by early next year," he said. Customers entering a 3G area from a 2G one will not be affected.

Hutchison, which launched Orange in the UK from a standing start, said its network would cover 80 per cent of Britain by the end of 2003. It is aiming to have enlisted 3 million 3G users in the UK and Italy by then. Mr Fok also said the new handsets would probably cost less than $2,000 (£1,300), which is what they will cost in Hong Kong when the service is launched.

Mark Davis, an analyst at WestLB, said: "If any [new] operator has a chance, it's Hutchison. They've got a lot of the management that were at Orange before.... current operators know it's a worthy adversary."