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Last Updated: Friday, 6 June, 2003, 16:04 GMT 17:04 UK
Shares hit as 3G price war starts
3G phone
Shares in mobile phone operators MMO2, Orange and Vodafone were among the heaviest fallers of leading London shares on Friday.

The falls came the day after Hutchison 3G, the UK's first third-generation mobile phone operator, said it was slashing prices in an attempt to poach customers from rival networks.

MMO2 shares slipped 5% to 59.25 pence, Orange was also 5% lower, at 512.5p, and Vodafone lost 1% to 128.5p. All three shares had also dropped on Thursday following Hutchison's announcement.

On Monday, Hutchison 3G - whose brand name is 3 - will launch two pricing packages aimed at attracting users of traditional voice services to its new network.

Below forecast

It says the plans undercut the price of similar packages on other networks by up to 50%.

The two price plans offer a set amount of talk time per month, and for the first three months of the deal users will also be able to make a limited number of free video calls and video messages.

Hutchison's network launched in March after considerable publicity about its new services - including video clips of Premiership goals - but critics have said sales are running below forecast.

Hutchison 3G is under pressure from shareholders to make a success of 3G because, along with the UK's four traditional network providers, it paid what is now widely seen as too much for the new licence.

Expensive handsets

The two packages being launched are called VideoTalk 500 and VideoTalk 750.

Under the VideoTalk 500 plan the user gets 500 voice minutes to any network at any time for 25 a month.

For the first three months of the deal, the package will also include 10 worth of video calling, video messaging and content.

The VideoTalk 750 package includes 750 minutes of voice calls for 35 a month, and includes 20 worth of 3G facilities for the first three months.

Analysts have said the new deals are very competitive but potential customers will still have to factor in the cost of buying expensive 3G handsets.

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