3G UK Cries for Help

The management board at Hutchison 3G UK Ltd. is to undergo a shakeup following initial disappointment over subscriber numbers since the carrier's high-speed service was launched last March.

Managing director Colin Tucker is to hand over day-to-day management to Bob Fuller, currently co-CEO of the Italian 3G venture of Hutchison Whampoa Ltd. (Hong Kong: 0013). The Italian business is experiencing significantly greater success in attracting customers than is its U.K. counterpart.

“Bob will be in charge now and will have operational management and overall responsibility of 3UK,” says company spokesman Edward Brewster. Vincenzo Novari, who shares the CEO position with Fuller at the Italian business, remains in his current position.

The move follows last month’s recall of Hutchison 3G UK commercial director Keith Bradley to Hong Kong after widespread problems with the carrier’s launch of next-generation services (see Hutch's Weekend Hangover).

Official figures released by Hutchison Whampoa on March 20 show that, while Hutchison's Italian 3G arm had signed up 50,000 users, the U.K. venture had only 10,000 subscribers by that date. Media reports suggest that the Italian operation is continuing to outpace the U.K. business in a big way.

Brewster says Fuller’s move reflects the U.K. company's "transition from a development to an operating phase.” But this is scoffed at by Phil Kendall, director of global wireless practice at Strategy Analytics Inc.

“They have put a handy spin on it by talking about alignments and the sharing of experiences between different operating units, but Italy has got out of the blocks a hell of a lot faster than the U.K.,” says Kendall. “The U.K. does need to put in some changes. The Italian arm has definitely been a lot smarter than the U.K. in terms of how they have approached the market.”

According to Brewster, Hutchison Whampoa expects to have 2 million customers signed up to its 3G services in Austria, Denmark, Ireland, Italy, Sweden, and the U.K. by the year's end.

Kendall doubts it. “Their figure is unrealistic and seriously wide of the mark. I think that the group as a whole probably won’t break the 2 million barrier." Kendall expects to see a quarter of a million users in the U.K. by the end of 2003.

— Justin Springham, Senior Editor, Europe, Unstrung