Has Hutchison 3G Terminated The TTI Telecom Contract ?

Hutchison 3G UK has terminated a contract with TTI Telecom. Edward Brwester of Hutchison 3G's London press office confirmed the termination of contract with TTI Telecom and also that this would not impact on the planned 3G Network Rollout in the UK. No further comment was made at this time.

The only contract that 3G.co.uk is aware of was for the provision of network management software - see further details here. However, it has not been confirmed that this is the contract in question.

The earlier report by www.Globes.co.il follows :

TTI Team Telecom International, which provides network management systems, today announced that it received a letter of termination from a significant customer.
Sources inform “Globes” that the customer is Hutchison 3G UK, a holder of the UK’s largest 3G mobile phone license. The deal with the UK operator is said to be worth a few million dollars.

Since TTI relies on a small number of customers, Hutchison 3G UK’s decision will be considered a major blow, especially as it comes two days after the Israeli company announced poor third quarter results.

Hutchison is considered one of TTI’s most important customers. TTI has contracts with several Hutchison companies, including its Hong Kong and Australia subsidiaries. It is believed that TTI’s cooperation with Hutchison’s Australia and Hong Kong units will not be affected at this stage.

Of the three Hutchison networks where TTI operates, the UK unit is the only one using third generation (3G) technology. Hong Kong and Australia still use the less advanced 2G or 2.5G technology.

TTI says it is currently investigating the customer's claims and will respond to the letter, and take appropriate actions, after consulting with its operational professionals and legal advisors. TTI Telecom says it remains confident in its belief that it has performed its contractual obligations to the customer and has executed on the project in an appropriate manner.

TTI says it first highlighted its concerns with the customer in its third quarter 2002 earnings report issued on Tuesday.

In the report, TTI Telecom CEO Meir Lipshes said, "Our weaker-than-expected performance for the third quarter was due primarily to information developed over the past few days that has raised concerns regarding the continuity of a customer implementation.”

Yesterday, Merrill Lynch analyst Ilana Treston noted that TTI’s third quarter results fell short of analysts expectations because there was “increasing doubt about the viability of one of the deals and that they therefore would not book accrued revenues from the deal. This would appear to account for the $1-$2 million difference between the pre-announced revenue range and the stated revenues for the quarter.”

Published by Globes [online] - www.globes.co.il - on 14 November, 2002