RealTime IT News

Hutchison, DoCoMo, KPN Make European 3G Mobile Deal

[London, ENGLAND] Hutchison Whampoa announced Wednesday it will sell some of its mobile phone holdings to Japan's NTT DoCoMo and Holland's KPN Mobile in a joint effort to capture a share of Europe's third generation (3G) mobile market.

"Europe will be next after Japan to implement UMTS and will provide an opportunity for us to leverage our technology and experience to successfully develop new 3G businesses on the global scene," said NTT DoCoMo's President Dr. Keiji Tachikawa.

In the U.K., Hutchison said it would sell 20 per cent of Hutchison 3G UK Holdings Limited to NTT DoCoMo for $1.8 billion and 15 percent to KPN Mobile for $1.35 billion, retaining 65 percent of its previously wholly-owned company.

The deal includes a payment of $75 million to Telesystem International Wireless (TIW) for not exercising an option to take a minority stake in the company at this time.

NTT DoCoMo will appoint three directors, KPN Mobile two directors and Hutchison seven directors of the new Hutchson 3G.

In Germany, Hutchison and KPN Mobile will form a new consortium named E-Plus-Hutchison, with the aim of bidding in the German Universal Mobile Telecommunications Service (UMTS) licence auction at the end of July. If the bid succeeds, the consortium will build a UMTS network to be used separately and competitively by both Hutchison and E-Plus.

In France, KPN Mobile and NTT DoCoMo will co-operate in the French UMTS licence award process and say they are in discussions with key strategic French partners.

In Belgium, Hutchison and KPN Mobile will be working together, again by forming a joint bidding consortium to take part in the Belgian UMTS licence award process. No decision has been taken about the exact business model to be followed, but the options include an integrated network and operator company and a single network company with independent operators.

By clubbing together in the bidding process, the participants hope to avoid the worst effects of escalating prices suffered by Vodafone, BT and other companies that took part in the recent U.K. auctions for third-generation wireless licences. Hutchison 3G UK Holdings was obliged to pay $6.6 billion for its British UMTS licence in April this year.

In May, NTT DoCoMo announced it was acquiring a 15 percent equity stake in KPN Mobile for around $6 billion. Terms of this deal have now been finalized.