DoCoMo Partially Denies Hutchinson 3UK Pullout
NTT DoCoMo has denied media reports here that it is pulling out its stake in Hutchinson 3G UK Holdings Ltd. after Hutchinson failed to roll out i-mode. In a statement today, DoCoMo said it “has made no decision about ending its investment in Hutchison 3G UK Holdings Limited,” but stopped short of fully denying local reports that it was pulling the plug on its July 2000-acquired 20% interest in Hutchison 3GUK for about 186 billion yen, the book value of which has withered to under 40 billion yen as the joint venture struggled to launch its 3G service.
Comments from DoCoMo president Keiji Tachikawa recently however, have been tinged with obvious frustration about the slow growth of i-mode to only 2 million users outside of Japan despite four years of effort, multiple investments, and an officially cheery public relations outlook.
In fact Tachikawa last month felt pushed to publicly defend (again) DoCoMo’s international foray in 2000 when the company appeared to have a grand, and aggressive strategy to promote both i-mode and W-CDMA abroad through investments that turned sour and forced huge writedowns.
In a press briefing on Feb. 27, Tachikawa hinted to reporters that DoCoMo was looking to MM02 as the “only operator [in the UK] that is capable of rolling out i-mode.”
“We are interested in any operator who is interested in rolling out i-mode,” he added, avoiding any direct criticism of Hutchinson 3.
Nevertheless, the suspicion remains that DoCoMo is indeed looking for some form of a face-saving exit from its UK investment and it would be hardly unsurprising if the company has in fact begun negotiations with Hutchison Whampoa Ltd.
Afterall, with all the money it has lost in the deal, the UK is one of the few countries on the European continent yet to have made i-mode available.
For its part, Hutchison seems to have developed a bit of a 3G headache. Apart from its own patchy problems in the UK, Big H is reported to be devising ways to grab cash to prop up its expensive 3G rollout, combining its units in Ghana, India, Israel, Macau, Paraguay, Sri Lanka and Thailand, into a new company that will be floated (or sunk) on the HK stock exchange.
After sinking some $15 billion into 3G in Europe, and a total of about $22 billion for its “global” (Oz and HK) rollout, Big H has only got its Euro 3G up and limping in the UK and Italy to date, which doesn’t seem to be delighting investors. Meanwhile, despite heavy handset subsidies in HK, takeup is slower than the company hoped and is causing analysts to revise their profit estimates downward.