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DoCoMo mulls Hutch 3G loan
TOKYO, Japan (Reuters) -- Japan's dominant mobile phone company, NTT DoCoMo Inc, has agreed to extend a £200 million ($314.5 million) loan to British mobile start-up Hutchison 3G Holdings Ltd, a DoCoMo source told Reuters on Friday. The loan is part of a plan by 3G's three parents -- DoCoMo, Hong Kong conglomerate Hutchison Whampoa Ltd and KPN Telecom of the Netherlands -- to inject up to £1 billion ($1.57 billion) into it to convince banks to alter a key loan. Officially, DoCoMo said no decision had been reached yet. "DoCoMo is still considering this request, taking the shareholders' agreement into account, and has not yet made a decision," the Japanese company said in a statement. Hutchison 3G, owned 65 percent by Hong Kong's Hutchison Whampoa, last month started Europe's first third-generation (3G) mobile phone service in Britain. The service, delayed by nearly two years due in part to handset shortages and software glitches, offers fast download speeds for video clips and music but requires expensive new networks. The delay meant it was unable to meet projections made in a loan agreement reached in March 2001, bankers said. The British 3G venture wants its banks to extend the £2.235 billion loan underpinning the 3G venture -- which matures in March 2004 -- for a further year. It also wants to revise loan conditions because delays in launching the 3G service have affected revenue prospects. NTT DoCoMo owns a 20 percent stake in the 3G venture, which started delivery of phones allowing video calls at the end of last month. The 3G phones should be available in 1,000 British stores by this weekend. DoCoMo has reason to be cautious about its overseas strategy. It splashed out 1.9 trillion yen ($15.89 billion) to take minority stakes in foreign carriers to promote its "i-mode" wireless Internet technology and lay the foundations for a high-speed 3G service but was forced to write down three-quarters of the investments after the telecoms share-price bubble burst. It recently rejected a request from KPN for additional capital for its wireless unit, KPN Mobile NV. DoCoMo itself launched the world's first 3G service in Japan in October 2001 but demand remained slow until recently due to its handsets' high cost, poor battery life and limited coverage area. Last November the company slashed its target to 320,000 3G subscribers by March 2003 from 1.38 million. It said on April 4 that it had hit this new target, without giving a precise figure. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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