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Last Updated: Wednesday, 11 June, 2003, 11:10 GMT 12:10 UK
Hutchison sues UK 3G partner
Close up of 3G phone
A row between the owners of the UK's first national 3G mobile phone network has resulted in legal action.

Hong Kong conglomerate Hutchison Whampoa, which controls the 3 UK network, is suing one of its partners in the project, Dutch phone firm KPN.

Hutchison's action came after KPN refused to provide a 150m ($248m) loan to the UK business earlier this year.

"We have instituted legal proceedings in London against KPN mobile for breach of contract and to claim damages for that breach," a Hutchison spokeswoman said.

Bust-up

In April this year, the 3 UK network asked its shareholders for 1bn of loans to help fund the roll-out of the network.

Hutchison provided 650m and Japan's NTT 200m, in proportion to their 65% and 20% stakes in 3 UK.

But KPN refused to provide its share because it said the agreement under which it owned 15% of 3 did not require it to lend the money.

The Dutch firm has already written-off the value of its stake in 3 UK and offered it for sale last year.

When KPN failed to provide the financial backing, Hutchison stepped and increased the size of its loan from 650m to 800m.

Price war

In the past few days 3 UK has slashed its prices in an attempt to poach customers from rival networks.

The firm launched two new pricing packages which it said undercut the price of similar packages on other networks by up to 50%.

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.




SEE ALSO:
UK 3G firm loses 150m loan
25 Apr 03  |  Business
Shares hit as 3G price war starts
06 Jun 03  |  Business
KPN back on track
12 May 03  |  Business


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