NEC invests in Hutchison


NEC’s USD 73m investment for a 5 percent stake in Hutchison’s mobile phone companies, announced yesterday, highlights the degree to which its is counting on the success of the Hong Kong group’s global third generation services. NEC has supplied Hutchison 3G in the UK with equipment for its network in the UK and Italy and has received an order for 1m 3G handsets.

Written by The Financial Times for PMN Mobile Industry Intelligence.

Insight

NEC has massive exposure to 3G. It has concentrated on being one of the only vendors capable of supplying dual-mode GSM/W-CDMA handsets to ‘first mover’ 3G network operators. This has been at the expense of its 2G handset business, which remains negligible outside Japan. Anything which delays mass market adoption of 3G, therefore, will hit NEC hardest out of all the handset vendors.

The flipside of this coin is that the company is well positioned as a supplier to DoCoMo and Hutchison, the loudest drumbeaters in the W-CDMA jamboree, and stands to benefit from any unexpected surge in 3G orders. This investment in Hutchison represents a public statement of its ability to deliver a sufficient number of handsets on time. It will also buy the company closer access to the operator’s long-term strategy discussions.


Originally published by PMN Mobile Industry Intelligence, the subscription-based analysis and insight platform founded by Marek Pawlowski.
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