Hutchison Whampoa has slashed entry-level fees by 40 per cent for its third-generation (3G) mobile phone services in Britain, igniting a price war as it tries to lure mass-market subscribers from 2G operators. Hutchison's 65 per cent-owned subsidiary, 3UK, will provide 100 minutes of voice services for just ?15 (HK$192) a month to customers who sign a 12-month contract. British market leader Orange charges ?19 for 60 minutes of voice services. Under a promotion started in June, Hutchison offers 500 minutes of voice services for ?25 a month. The strategy has prompted rivals to cut tariffs. As of Wednesday, subscribers of No?3 operator T-Mobile will pay ?20 a month for 500 voice minutes, while No?4 mmO2 charges ?25 for the same package in addition to 100 text messages. William de Broe analyst Morten Singleton said Hutchison had had a tremendous impact on the British mobile phone market because its tariff cuts had forced established rivals to change their strategies. 'A price war has well and truly commenced,' he said. 3UK, launched in March and Britain's first 3G service, aims to sign up one million subscribers in its first year of operations but had just 155,000 on August 20. Hutchison initially targeted customers at the high end of the market - which offers better margins - but is now moving to the mass market, which accounts for about 40 per cent of British mobile customers. Mr Singleton characterised British customers as 'price-sensitive'. About one-third switch network operators yearly. He said Hutchison's aggressive pricing strategy would open its 3G services to Britain's full market of 14 million mobile phone subscribers who were on monthly contracts. A spokesman for 3UK said on Wednesday: 'We are not cutting prices but are setting new tariff levels for our video and voice service. We are creating an extremely competitive environment that our rivals have to come to terms with.' To promote its video-call service, Hutchison is charging video calls at voice-call prices for the initial three months of a customer's 12-month contract. In addition, customers can pay ?30 a month for 500 voice minutes plus unlimited soccer league highlights and text alerts. 3UK had made clear it intends to launch a big Christmas push by offering competitive rates in the pre-paid market. Hutchison has had trouble securing a steady supply of 3G handsets. According to reports last month, there were shortages in Italy and Britain, but new models from Motorola were expected this month, and more are due from NEC in December.