Hutchison to partner Tiscali in Italian auction

Hutchison Whampoa, the Hong Kong-based conglomerate, yesterday struck a deal with Tiscali, the Italian communications group, to lead a consortium to bid for one of Italy's third-generation mobile phone licences.

Hutchison Whampoa, the Hong Kong-based conglomerate, yesterday struck a deal with Tiscali, the Italian communications group, to lead a consortium to bid for one of Italy's third-generation mobile phone licences.

The deal is the latest move by Li Ka-shing's sprawling company to become one of the main player's in the Continent's new-wave communications industry, competing against Britain's Vodafone; France Telecom and partner Orange; and Deutsche Telekom.

Hutchison said it had paid an undisclosed sum for a 51 per cent stake in Andala, a bid vehicle set up by Tiscali to compete for one of the country's five, new mobile licences, which will be sold off by the government later this year.

Canning Fok, Hutchison group managing director, said: "Italy holds great potential for us and with such strong established partners in the consortium, we are confident that we can successfully obtain a licence."

About 35 million Italians have mobiles, making it Europe's biggest market. Across the Continent, analysts estimate that 18 countries are distributing 75 licences, expected to cost more than $100bn. The sales, conducted by both auction and so-called beauty parades, have sparked a fierce battle among telecoms groups for dominance of the potentially lucrative new business.

A Hong Kong-based analyst said: "In true fashion, they [Hutchison] have been very nimble. Clearly they have the goal of being one of the three or four leading telecoms players in Europe.... Their goal is to secure a foothold in each of the major markets."

It is understood Hutchison secured the Tiscali link-up against competition from Deutsche Telekom. The pair are going head to head in markets across Europe, including Germany, where the auction of third-generation licences is under way. Bids yesterday totalled the equivalent of £24bn after 138 rounds, passing the £22.5bn raised in the UK auction.

To augment its already considerable financial firepower and expand its reach, Hutchison has teamed up with Japan's NTT DoCoMo and Holland's KPN Telecom to vie for, or run, licences in Britain, Germany, France and Belgium.

Yesterday's Andala deal made no mention of DoCoMo or KPN, although analysts suggested they may be bought on board at a later stage.

Joining Tiscali, which will have a 22.5 per cent stake in Andala, and Hutchison, is CIR, an industrial holding company controlled by the De Benedetti Group, which will have a 15 per cent stake. The balance of the venture is held by San Paolo-IMI, an Italian bank; Franco Bernabe, Andala's chairman and a former chairman of Telecom Italia; and Italian holding companies HdP and Gemina.

Separately yesterday, Hans Snook, head of Orange, the UK-based mobile business said the group's re-listing may be delayed until next year because of the amount of paperwork that needed to be filed for US authorities. He added that Sonera, a Finnish telecoms group with which Orange has been repeatedly linked, was "a good company" but may be overpriced. Analysts suggest it could fetch up to £20bn.

Orange was originally set up by Hutchison, after it moved into British telecoms operations in the late 1980s.