Hutchison’s 3 submitted losses of HK$17.94 billion (US$2.3 billion) in 2007, a slight improvement on the 2006 loss of $20 billion.
Of Hong Kong’s 10 million mobile subscribers in December 2007, just 2.7 million used 2.5G or 3G services.
But Hong Kong is not alone as an Asian market that has seen an underperformance by 3G brands.
Singapore has seen slow uptake since services launched in 2005, while China has yet to launch the technology despite continued assurances that it will be ready for rollout before the Games.
Pricing issues appear to be a key factor behind the slow uptake. “Consumers are often confused as to what is free, what is not free, and how much their total monthly bill will be,” explained Geoffrey Handley, co-founder and new business director at The Hyperfactory Asia.
Francis Cheung, telecoms analyst at CLSA, commented that the high pricing might be a deliberate ploy to keep uptake of 3G technology in Hong Kong low, since the network is insufficient to deal with widespread usage.
“Complicating things further are carriers’ individual charging schemes - their own mobile currencies,” added Handley.
In addition, the shortage of attractive content remains a challenge. “Even if I get a 3.5G phone, I can’t do anything else other than surf the internet,” said Starcom IP strategic director Suyesh Shankar.
“People are still grappling with SMS and WAP but the potential for growth is there with the advent of video phones and various applications on new handsets.”
Hutchison’s Hong Kong marketing strategy, in particular, has been singled out for focusing too much on technology rather than content. Sources noted that successful 3G operations in Asia, notably Japan’s i-Mode, have been built around strong application offerings.
“Hong Kong operators have been very conservative with what they do in terms of applications,” noted Cheung.
Hutchison moved to remedy this issue last year by launching a music download service. Hutchison’s 3 brand has also been dogged by the perception that its service is slower than competitors, most notably SmarTone, which leads with a 40 per cent share.
Additional reporting by Kenny Lim
