HTIL triples CAPEX as it targets India

10 Mar 2006

Hutchison Telecommunications International (HTIL), a unit of Hutchison Whampoa, has revealed plans to triple capital spending in 2006 to HKD14.5 billion (USD1.9 billion), up from HKD4 billion in 2005. Under the new expenditure plan, HKD10 billion – roughly two-thirds of the entire group amount – has been earmarked for India, where HTIL hopes to double network capacity and offer services in 23 operating areas, up from the current level of 16. Originally HKD9 billion was to be spent in the country, but CEO Dennis Lui said that the increased investment was ‘due to some recent changes in the Indian market’. These changes are understood to revolve partly around the Indian government’s plan to subsidise mobile operators that rollout networks in rural areas, and partly around fears that new operators (such as Telekom Malaysia – see today’s story regarding its acquisition of a 49% stake in Spice, a competitor to Hutchison in India) will enter the market and steal market share. Hutch’s Indian subscriber base increased by more than 50% in 2005 to 11.4 million at the end of the year.

In addition to the spending in India, between HKD2 billion and HKD3 billion will be used to continue the development of mobile networks in Vietnam and Indonesia, where HTIL hopes to launch later this year. The remaining HKD2 billion of the overall group budget will spread over the company’s other operations (Hong Kong, Israel, Thailand, Sri Lanka and Ghana).

In a separate but related story, HTIL has reiterated its desire to spin off its Indian subsidiary for a separate stock market listing, and may do the same for its other Asian holdings.