Hutchison, which launched its '3' network in April last year, had signed up 50,000 customers on its 3G network by the end of August. This reflected a drop in uptake of 27 percent in the second four months of operation last year compared to the first four months.
The company today blamed the slowing uptake to a severe handset shortage at the end of 2003.
"September to January '3' sales were hampered by handset availability, particularly the replacement for the NEC e606," Hutchison's chief executive officer, Kevin Russell, said when announcing the full year results for the telco. "By comparison 3's current handset roadmap looks very encouraging."
"In regards to volume we received firm delivery commitments and are confident the shortages seen last year will not be repeated," said Russell. He also indicated that Hutchison would look to reduce the number of dropped calls on its network.
When the service was launched, the 3 network was experiencing a dropped call rate of 12 percent, and this has improved to an average of just below 3 percent of calls, according to Russell.
"Getting down to 2 percent [of all calls being dropped] at the end of 12 months would be a good performance," said Russell, who claimed that would bring the service on par with the GSM network. This would be achieved by ongoing improvement of the 3 network and quality of handsets.
Hutchison claimed to be taking on board "quality customers" despite the slide in uptake levels.
"We have attracted quality customers to 3 with overall ARPU [average revenue per user] higher than [the industry] average, including a non-voice ARPU we believe to be the highest in the industry," said Russell. Hutchison's non-voice ARPU was put at around AU$10 by Russell.
"We'd like to see it trend upwards," said Russell. "The reality is content will always be a slow burner as consumers get used to it."
Warren Chaisatien, IDC senior analyst for Mobile & Wireless Solutions research, said that Hutchison had performed according to his expectations, but he was less sure about the telecommunications company's future following the challenges faced in recent months.
"The good news is that they can expect almost zero competition in the next 1-2 years," said Chaisatien. "The challenge is to move their offering from consumer to business...we all know business users are big spenders."
Hutchison originally planned to target business users, but switched to a consumer focus when their product and services took off in that market segment.
Hutchison plan to have one million mobile users by the end of 2005 across both its 3 and Orange services. Hutchison had 411,938 customers across both companies by the end of 2004, with 325,180 customers using Orange.