hta - almost up 15% today!!, page-3

Comments by Dresdner Kleinwort Wasserstein (Per Lindberg), in a report just out (literally received mine about 3 minutes ago):

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We are not surprised by unconfirmed reports that incumbent operators are beginning to match Hutchison's aggressive pricing in the UK. Any cursory look at the latest offers suggest that voice
minutes are given away (cf. US model).

º Following the launch of NEC's e606 and LG's U8110 dual mode models, featuring qualities comparable, if not ahead, of those of GSM equivalents, Hutchison has experienced signficantly stronger demand
for its services offerings.

ºWith the latest models handed out for free in exchange for a 12-month contract running at £25 per mth (for 500 mins) or £35 per mth (for 750 mins), the attractiveness of Hutchison's campaigns has become ever more conspicuous.

º Unconfirmed but widely quoted stories now suggest that a leading UK operator has responded by matching 3's volume discounts, in effect 5p per minute of voice, for a select group of heavy users which it apparently seeks to retain.

ºWe believe the price wars will move to another level once incumbent GSM operators open up their 3G networks for commercial traffic in the latter part of the year. Such factors underscore the positive outlook for mobile systems.

º Siemens/NEC and Nokia provide network gear to Hutchison. Earlier reports suggest that NEC and LG have been contracted to supply 5-6m handsets to Hutchison in the course of 2004. Target price of suppliers determined by SoTP DCF.