LONDON-Hutchison Whampoa has launched legal action against partner KPN Telecom for refusing to contribute a loan for the two companies’ third-generation U.K. business, Hutchison 3G U.K., which operates under the 3 brand name.
Earlier this year, 3 U.K. asked its three shareholders for more funds. Japan’s NTT DoCoMo, which holds a 20-percent stake in the operator, contributed $333 million, and Hutchison Whampoa, which holds 65 percent, paid about $1 billion. However, 15-percent shareholder KPN, which is struggling under a high debt load, declined to contribute additional funds.
Hutchison is suing the Dutch operator for breach of contract in the United Kingdom, according to international press reports.
KPN has distanced itself from the U.K. business, and last year wrote off its U.K. stake and said it is looking to sell the holding.
Hutchison, which launched 3G services earlier this year in the United Kingdom and Italy, is seeing slow uptake in the United Kingdom and last week slashed its prices for the service.
