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November 21, 1993

HUTCHISON EXPLAINS WHY IT DECIDED TO SKEWER ITS RABBIT TELEPOINT SERVICE

By CBR Staff Writer

Hong Kong-based Hutchison Whampoa Group Ltd says it finally decided to slaughter its Rabbit UK CT2 Telepoint service on December 31 this year for four reasons. It reckons the mass-market demand for two-way telephony, partly fuelled by the arrival of low-cost cellular service options from Cellnet Mobile Communications Ltd and Vodafone Group Plc were to the detriment of its offering; it managed to achieve only patchy service coverage; it failed to win timely support from electronic and telecommunications product manufacturers to offer consumers a wide range of affordable hand sets and home base stations; and it was unable properly to educate the market on the cost-effective benefits of Telepoint. According to a company spokesman, although the service was under-performing by spring this year, with only 8,500 subscribers against a forecast 20,000, there were no plans then to scrap it. Instead, March saw the introduction of a new direct sales force to push Rabbit’s business applications, heavily reduced rates for the GEC Plessey Telecommunications Rabbit phone, and the announcement of the Motorola Inc Silverlink lightweight hand set for UKP100. At the time, says the source, the company was convinced that these initiatives, coupled with a new advertising campaign, would push market acceptance. This did not happen, and the last attempt to turn the tide was in September, when the company announced that it was testing an unspecified new technology that would enable Rabbit handsets to receive, as well as initiate, calls. This offering was promised for the end of this year. But before it could be implemented, Hutchison Telecom UK and its Hong Kong parent took a joint decision to put the rodent out of its misery. The two-way system was successfully trialled, but the bottom line was that we were not able to secure market growth for the service, says the spokesman. It had had its opportunity. For the same reason, it was decided to offer Rabbit subscribers a variety of compensatory packages including cash incentives and the option to switch into Hutchison’s forthcoming Personal Communications Network. Hutchison has confirmed that the launch and roll-out of its digital Personal Communications Network is on target for April next year. The company promises that it will reach 50% of the UK population on day one, rising to 70% by the end of 1994.

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