3 Group losses narrow by 45%

22 Mar 2007

Hutchison Whampoa’s 3 Group has posted a 45% year-on-year reduction in operating loss (LBIT) for full year 2006, to HKD19.996 billion (USD2.559 billion), on revenues that rose by 35% to HKD50.668 billion (USD6.486 billion). The results were helped by a drop in subscriber acquisition costs (SAC) to EUR250 from EUR293 the previous year. Hutchison Whampoa, controlled by Li Ka-shing, Hong Kong’s richest man, predicts that 3 Group will break even in 2008. The unit, whose largest operations are in Italy and the UK, lost more than USD4.6 billion in two consecutive years in 2004-05. Also present in Australia, Ireland, Sweden, Denmark and Austria, 3 Group’s total subscriber base grew by 28% in 2006 and stood at 13.575 million at 21 March 2007; added to the 3G mobile customers of Hutchison Telecommunications International (HTIL) subsidiaries in Hong Kong and Israel, Hutchison Whampoa’s total 3G user base stood at 14.72 million. Average revenue per user (ARPU) from active users (79% of all customers) improved by 8% over the year to EUR45.63 on a twelve-month rolling basis. Non-voice services made up 30% of ARPU, rising to EUR13.70 from EUR10.47 in 2005. 3 expects to offer a greater number of promotional discounts on contracts this year, as competition for new customers intensifies and it continues to focus on post-paid users. Its customer churn fell to 2.6% in the second half of 2006 from 3.2% in the first half.

Hong Kong, CK Hutchison