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MELBOURNE - Australian mobile phone operator Hutchison Telecommunications, 19.9 per cent owned by Telecom NZ, has begun charging a flat fee for internet services on its mobiles, a move analysts say could spark a price war in the industry.
The unit of Hong Kong conglomerate Hutchison Whampoa has also introduced internet calling using Skype on its 3G mobile service, known as 3. Skype, which is owned by eBay, is already available on Hutchison mobile in the UK and Hong Kong.
The new internet fees, which analysts say are as little as one-fifth those of rivals Telstra Corp and Vodafone, could force the two and the No.3 operator, SingTel's Optus , to follow suit.
"It depends on the take-up rate, but generally if Hutch does something in the Australian market, Vodafone needs to react, then Optus, Telstra have to react," said JP Morgan analyst Laurent Horrut.
He said the pricing was quite aggressive and on a par with fixed-line broadband prices.
Hutchison's market share in Australia has increased to about 6.2 per cent of total mobile subscribers and 8.5 per cent of revenues. It has 1.3 million of the country's 3 million 3G high-speed mobile users.
"Although 3 is the smallest mobile operator, they have already had a profound impact" on the Australian industry, said Goldman Sachs JBWere analyst Christian Guerra.
He cited Hutchison's capped-rate calling plans, which were subsequently taken up by its rivals and which have since eaten into revenues for all providers.
On the deal with Skype, Guerra said the introduction of internet calling over mobiles "is a big issue for mobile operators as it means not paying for voice calls again".
If it proves popular, Skype use on mobiles could eat into Hutchison's traditional mobile voice telephone business over time, a concern the company played down.
"We are not concerned about the impact it will have on our revenues, we don't believe it will be negative," said Hutchison spokesman Scott Taylor.
He said that Skype is mainly used for international calls, and since customers do not generally make overseas calls from mobiles at present, it would not cannibalise revenues.
- REUTERS
