Li Ka-Shing and 3G

Writes WSJ:

Mr. Li has placed a $17.5 billion bet on third-generation, or 3G, mobile-phone services. They let users make video calls, take pictures and browse the Internet. He has already spent $7.6 billion on 3G licenses in nine countries around the world. His Hutchison 3G unit has budgeted an additional $10 billion for rolling out commercial service, starting this year in Italy and Britain.

Mr. Li remains committed to rolling out the service — dubbed “3” — in Britain and Italy first, followed by Australia, Denmark, Hong Kong, Ireland, Israel, Austria and Sweden. At a meeting in August at Hutchison’s Hong Kong headquarters, reporters were shown a model of the palm-sized phones to be offered with the service. “This is the smallest video camera, the smallest TV and the smallest computer,” gushed Mr. Fok, who heads Hutchison 3G. “The damn thing can talk, too.” A Hutchison spokesman compared the arrival of 3G with the arrival of color TV.

Hutchison hopes to persuade executives to use their mobile phones to tap into video-conference calls. It also sees a big market for sending video clips of sports highlights to phone subscribers. For example, the company thinks people watching games in stadiums will call up instant replays, which would include advertising. Hutchison 3G’s British unit plans to offer subscribers footage of selected goals in English Premier League soccer matches seconds after they have been scored. The company also hopes to provide users with clips of matches, match commentaries, archival material, still photographs and match results.

The marketing has been split between business clients and consumers in other ways. The pricing of “3” handsets between about $600 and $900 in Italy seems to aim for a business user. In Britain, though, Hutchison plans to market the costly handsets partly through a chain of discount pharmacies, Superdrug, recently acquired by Hutchison. “It’s like trying to sell a Rolex in a corner store,” says Richard Hyman of branding consultancy Verdict in London.

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Rajesh Jain

An Entrepreneur based in Mumbai, India.