The British 3G license holder, Hutchison 3G, is hoping to buy Phones 4U from Caudwell Communications. The purchase would go some way to raising the company’s low profile but it will still be at a disadvantage compared to companies with an existing subscriber base. Hutchison still has a long way to go before its future is secure.
Hutchison 3G is on the brink of splashing out £500 million on Phones 4U.
According to the Sunday Telegraph Hutchison is already in talks with Caudwell over the purchase of the chain’s 255 shops, which would give a considerable boost to the company’s chances of attracting 3G subscribers.
At present Hutchison 3G lags behind its fellow British 3G license holders in terms of high street visibility and has no existing British subscribers. The purchase of Phones 4U is therefore vital to the company’s success in attracting customers to its network.
As an extra bonus to Hutchison, at present Phones 4U favors Vodafone and therefore tends to prefer connecting customers to its network. So, if the take-over succeeds it could also have a significant effect on Vodafone’s subscription rate.
The British launch of 3G services is expected in Q3 2002, so the company must raise its profile quickly. The purchase of Phones 4U could go some way towards this. The company, which will not market its network under the Hutchison 3G name, will also launch its UK brand early next year, providing another opportunity to promote itself. The advertising campaign that will surround this brand launch will therefore also be vital in wooing the British public to use its services.
Should Hutchison succeed in purchasing Phones 4U, the mobile phone chain could prove invaluable in its campaign to tempt customers onto its 3G network. However, there is still work to be done: without being able to convert existing subscribers onto its network the company is severely handicapped and must advertise intelligently if it is to stand any chance of prospering in what will undoubtedly be a highly competitive market.