3UK, the mobile phone operator, on Tuesday took the first tentative step in its preparations for an IPO, which is expected next year, as it sought to reinvent itself as a media company.
The company, one of eight mobile phone businesses around the world controlled by Hutchison Whampoa, on Tuesday laid out a strategy based around the convergence of communication, entertainment and information on the mobile handset.
3UK entered the UK market in 2003, becoming the fifth network operator as it pioneered the roll-out of 3G technology.
The latest mobile technology offers faster data transfer speeds, which means handsets can be used to browse the internet, download music and video clips and watch live TV.
Bob Fuller, chief executive, insisted that 3UK’s technological lead over rivals such as Vodafone and Orange in the deployment of 3G services meant it could claim the mantle of “the first truly mobile media company”.
“The previous distinctions between media, technology and communications industries have all but disappeared. An entirely new type of company is emerging that blurs the boundaries between all three,” he added.
3UK has grown rapidly since its launch and has 3.2m subscribers in the UK, but is still a distant fifth in the market.
However, analysts questioned the need to spell out the strategy, suggesting it was more about convincing potential investors that 3UK was somehow different from its competitors.
“They are trying to brand themselves as a media company because telecoms companies do not attract the same high multiples, it is all part of the game. The fact is there will soon be a bunch of telecoms operators out there that can offer the same [products] as 3,” said Robert Grindle, an analyst at Dresdner Kleinwort Wasserstein.
3UK and the other mobile operators are all at varying stages of rolling out 3G services, which have been slow to take off, hindered by the lack of attractive handsets.
That is all set to change, with a strong range of handsets beginning to appear in shops ahead of Christmas.
Hutchison, the Hong Kong conglomerate, which has spent the past five years building its mobile empire at a cost of some $25bn, has already announced plans to bring its Italian unit to market before the end of 2005.
Indications that Hutch-ison, controlled by Li Ka-shing, Asia’s richest businessman, is hoping to value its Italian business at up to €12bn ($14.4bn) have raised plenty of eyebrows in the financial community.
“They still have a big mountain to climb to convince people to give them money,” said Mr Grindle.