Forum Archive Index - October 2001

[Derek <dkw@paradise.net.nz>]

Something for TEL watchers.
Rgds,
Derek

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Top Financial News 
Tue, 30 Oct 2001, 3:54pm EST
Hutchison Faces Cost Blow-Out on Mobile Network, Paper Says
By Gavin Evans


Sydney, Oct. 5 (Bloomberg) -- Hutchison Telecommunications Australia Ltd.
is facing a cost blowout on a third-generation mobile phone network it is
building with Telecom Corp. of New Zealand, the Australian Financial Review
reported. 

Citing analysts, the newspaper said costs are rising for the company, which
has contracted Ericsson AB and Motorola Inc. to build the network and have
it operating commercially by the end of 2002. It had earmarked A$1 billion
($500 million) for the project, excluding the $196 million it paid for
spectrum earlier this year. 

Andrew Hines, an analyst with ABN Amro, said that once the cost of
handsets, billing systems and start-up advertising are included, Hutchison
would need A$2.5 billion to A$3 billion to start the business, the
newspaper said. 

Tim Smart, an analyst with Macquarie Equities, put the cost at A$1.8
billion, the newspaper said, adding that he expects the company will lose
A$600 million in the year after launch. 

Hutchison, the country's fifth-largest mobile phone company, is 58 percent
owned by Hutchison Whampoa Ltd. in Hong Kong. In August it agreed to put
A$600 million into the 3G venture if Telecom also put A$400 million into
the business. 

(The Australian Financial Review, 10-5) 


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