Hutchison teams with AOL in HK market

AOL and Hutschison will introduce instant messaging to Hong Kong's mobile users

By Kristie Lu Stout
CNN.com Writer

HONG KONG, China -- Hutchison and America Online (AOL) have teamed up to offer a mobile instant messaging service in Hong Kong.

Hutchison Telecommunications (Hong Kong) Limited, a unit of Hong Kong-based conglomerate Hutchison Whampoa Ltd, and AOL said that they will offer Hong Kong mobile users the messaging service next quarter.

The service will be launched in a market that boasts a mobile-phone penetration rate of 70 percent, dwarfing even PC usage in the area.

The communication service will be available on Hutchison Telecom's networks and powered by ICQ Mobile for SMS, a technology that allows mobile users in Hong Kong wireless access to the ICQ instant messaging service run by America Online.

A tough mobile market

Hong Kong has a considerable mobile-phone penetration rate of 70 percent, according to AC Nielsen eRatings.

In comparison, only 56 percent of Hong Kong households own a PC, making mobile phones the dominant communications device in the area.

Despite the wild popularity of cell phones among the locals, telcos and analysts alike regard Hong Kong as a tough market to tackle.

"Hong Kong is the most competitive mobile phone market anywhere in the world," says Jahanzeb Nasser, Internet analyst at ABN Amro.

"No mobile phone operator other than Hong Kong Telecom is making any money. Cutting prices won't get anyone anywhere. What they need to do is to differentiate on the service side," Nasser added.

The ICQ service will provide one more differentiating factor for Hutchison Telecom.

A pricing structure for the messaging service has yet to be announced.

The service will be available later this year on Hutchison Telecom's Orange GSM dual-band and CDMA wireless networks.

Hutchison Whampoa shares slipped 0.26 percent to HK$95 in Hong Kong on Tuesday.

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Orangehk.com: Hutchison Telecom
AOL
Hutchison Whampoa Limited

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