Hutch Touts 3.2M 3G Subs

Hutchison Whampoa announces it has over 3.2M 3G customers worldwide; revenue for the first half of the year totaled HK$3,707M

August 19, 2004

3 Min Read

HONG KONG -- Hutchison Whampoa Limited (HWL) today announced the Group’s interim results for 2004, and disclosed an updated subscriber figure on its global 3 network of over 3.2 million, which includes Italy, the UK, Hong Kong, Australia, Austria, Sweden and Denmark.

HWL also reported that gross customer additions for all 3 Group operations in the first half (six months) of 2004 totalled over 2.5 million.

3 Group combined customer additions for the month of July alone were 697,701, averaging over 22,500 per day based on a seven-day week.

Average revenues per user, which are detailed below, have remained strong with the result that the 3 Group’s revenue base is expanding in line with customer growth. Turnover for all 3 Group operations in the first six months of the year totalled HK$3,707 million. Turnover has continued to grow and for the month of July reached HK$1,239 million, well ahead of previous months.

Overall, cost trends in the businesses were positive. Fixed operational costs of all 3 Group operations were maintained at levels significantly below our budgets despite rapid customer growth. Direct costs including interconnect, call termination and domestic roaming charges all showed improving trends overall during the first half and into July.

Customer acquisition costs, have trended down rapidly and consistently over the period. The 3 Group’s average cost of acquiring a customer for the month of July was €252, significantly lower than the average cost of acquiring a customer for the first seven months of the year, which was €299. The seven-month average reflects both slow sales and more limited range and higher average manufacturer handset prices during the early months of the year. We expect this positive trend to continue as the 3 Group’s businesses gain market share and benefit from increasing volumes, broader product ranges and overall rapidly declining unit costs under the Group’s centralised major handset supplier arrangements.

The 3 Group loss before interest expense, taxation, depreciation and amortisation (“LBITDA”) for the first six months was HK$4,153 million, which is within our planning expectations for the year and reflects the progress made building these businesses, compared to the LBITDA of HK$8,598 million reported in the second half of 2003.

Depreciation and amortisation for the period totalled HK$8,090 million, bringing the 3 Group loss before interest expense and taxation (“LBIT”) to HK$12,243 million. This LBIT compares favourably with the LBIT for the second half of 2003 of HK$14,415 million which included a depreciation and amortisation charge of HK$5,817 million.

As in full year 2003, LBIT continued to be adversely affected by the continuing strength of foreign currencies in which the 3 Group operates, in particular the Euro and the British pound. Foreign currency fluctuations resulted in a HK$1,016 million loss on translation which is included in the 3 Group’s LBIT for the period.

Accordingly, the Group is reporting a loss attributable to shareholders for the period from the Telecommunications – 3G division of HK$8,920 million.

Hutchison Whampoa Ltd.

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