Hutchison Whampoa's pan-European mobile-phone alliance, struck yesterday with KPN Mobile of the Netherlands and Japan's NTT DoCoMo, is set to kick off a series of similar tie-ups throughout the telecommunications industry, analysts and telecoms executives predict. The three companies, which have teamed up to bid for third-generation (3G) mobile-phone licences in Europe's biggest markets, said yesterday the growth of services that would be available on 3G handsets meant that one telecoms company alone would not be able to bring the full benefits of 3G to consumers. Such 3G benefits, or universal mobile telecommunications services, will allow mobile-phone customers to surf the Internet, watch live Web-casts, hold video conversations and conferences, as well as use voice and text message services. Under the Hutchison-led alliance, in which DoCoMo will hold a 20 per cent stake, KPN a 15 per cent stake and Hutchison 65 per cent stake, the three companies aim to pool resources and expertise. 'This will be the first, not the last,' said Joop Drechsel, an executive board member of KPN Mobile's parent company, KPN. 'My belief is that we will undoubtedly see more of these.' Analysts agreed, pointing out that the cost of building a 3G network, added to the price of winning a licence, could prove prohibitive, and companies would want to spread the risk. Yesterday, Hutchison managing director Canning Fok Kin-ning said one of the deal's main advantages would mean that it would also help to reduce costs at the Hong Kong conglomerate. He said that, as a result of yesterday's announcement, the GBP4.4 billion (about HK$51.9 billion) 3G licence cost in Britain plus the expected GBP5 billion cost of building a network there had now been almost halved. He now expected the British network to reach break even on the basis of earnings before interest, taxation, depreciation and amortisation by 2005. Operationally, the pooling of interests should also bring benefits, particularly as DoCoMo is already well advanced to make its domestic 3G service commercially available by next spring, according to DoCoMo senior executive vice-president Yoshinori Uda. Most European 3G services are not expected to be ready until 2002. The alliance means that DoCoMo initially will pay GBP1.2 billion for a 20 per cent stake in Hutchison 3G UK Holdings, and KPN Mobile will pay GBP900 million for a 15 per cent stake. The three companies will then co-operate in future licence bidding and applications in Germany, France and Belgium, and later Italy. Britain, Germany, France and Belgium offer a potential of 210 million customers and a forecast market value of 200 billion euros (about HK$1.47 trillion) by 2010. The companies said the alliance would speed up the time taken for the network to come to market and generate savings in product development, network procurement and construction. Hutchison said part of the GBP1.2 billion it would receive from DoCoMo was a GBP50 million payment due to its original partner in the British 3G licence bid, Telesystem International Wireless (TIW) of Canada. The GBP50 million will buy 3.5 per cent of a 10 per cent option held by TIW. The remaining option on 6.5 per cent on Hutchison 3G UK Holdings expires in November.