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NEC Buys Stakes In Hutchison Units

NEC Corporation has agreed to acquire a five percent strategic equity interest in both Hutchison Telephone Company Ltd. (HTCL) and Hutchison 3G HK Holdings (H3G HK) from Hutchison Whampoa Limited (HWL) for US$73 million.

With this transaction, HWL's interest in HTCL and H3G HK will change from 74.63 percent to approximately 71 percent, whilst NTT DoCoMo's stake will change from 25.37 percent to approximately 24 percent for both companies.

Completion of this transaction is expected to take place before December 2002.

According to NEC's president, Koji Nishigaki, this acquisition will help accelerate the adoption and expansion of its 3G business in the world.

NEC has already supplied more than one million units of 3G devices to H3G. It has also constructed a significant portion of Hutchison's 3G network infrastructure in Europe and will provide Hutchison with its maiden batch of handsets for the first phase of the 3G service rollout this month.

Meantime, Hutchison (owned by Hong Kong tycoon Li Ka-shing) has been said to be reluctant to postpone its 3G plans in Europe despite a meltdown in the global telecommunications industry. Investors are therefore concerned as 3G services in Europe is an unproven and expensive technology, said Reuters.