NEC Corporation has agreed to buy a 5% strategic stake in Hutchinson Whampoa’s domestic telecoms arm. The Japanese handset manufacturer is paying $73 million for a stake in Hutchinson Telephone Company and, more significantly, Hutchinson 3G HK Holdings.
The deal is being interpreted as a vote of confidence in the 3G plans of the Hong Kong based group. While Hutchinson Telephone operates 2G services in Hong Kong, Hutchinson 3G HK is licensed to provide 3G services in the area.
The announcement follows a series of set backs for Hutchinson. The company has had to postpone a $1.5 billion dual currency bond issue because of tough market conditions and Japan’s NTT DoCoMo is writing down its stake in Hutchinson 3G UK.