Hutchison Whampoa is to spend most of its US$20 billion war chest on third-generation (3G) mobile-phone ventures during the next five to 10 years, according to analysts who recently met management.
Hutchison management also indicated the group's gearing would rise back to 20 to 25 per cent compared with its current US$5 billion net cash position, after several 3G investments.
Hutchison's re-entry into the British and possibly European mobile sector has raised concerns in the market.
Some analysts, indicating the up-front investment and subsequent costs, said Hutchison could incur operating losses of HK$10 billion during the next four years through the British 3G licence.
Hutchison formed a joint venture with Canada's Telesystems International Wireless to win one of five 3G mobile licences in Britain for GBP4.38 billion (about HK$52.12 billion). It is also bidding for a German licence.
Analysts said Hutchison had been talking to potential licence partners in France, the Netherlands, Sweden, Switzerland, Denmark, Belgium and Italy. Country or content partners would be invited to take stakes.
