Hutchison reports tough first half for 3

August 21, 2003 - source: BWCS

Hutchison Whampoa's six month results, published today, confirmed a significant shortfall in subscribers for the Hong Kong-based operator's 3G ventures in the UK and Italy. In line with expectations, 3 UK had only signed up 155,000 subscribers since its March launch, which makes the original 1 million target for the end of the year look unlikely. Italy, with 300,000 subscribers, has fared somewhat better, though reaching the hoped-for 1 million mark by end 2003 will be a tall order.

3 Subscriber Levels
Italy	300,000
UK	155,000
Australia	50,000
Sweden	9,000
Austria	6,000

In Australia, the service has had an equally tough start. Following a limited launch in Sydney and Melbourne in the second quarter, the service went national in July and has since attracted 50,000 subscribers. In Sweden and Austria Hutchison 3G opted for a soft launch, which has brought in about 15,000 subscriber for the two markets, taking the operator's total 3G customer base to around 520,000 worldwide.

Li Ka-shing, Chairman of Hutchison Whampoa was pleased with the result "The commencement of 3G services in the UK, Italy and Australia represents a significant milestone for the Group and I am pleased with the progress made to date."

Combined revenues for the 3G start-ups reached HK$245 million (US$31.42 million) in the six months to 30 June on a loss before interest, expense and taxation of HK$3,895 million (US$499.45 million). The company said it was working hard to overcome problems with handset supplies and models, which had plagued UK sales, in time for the run-up to Christmas.

Mr Li told the press, "The Group is working with its handset suppliers to ensure an adequate supply of handsets to meet expected strong consumer demand in the fall and Christmas period."

In the UK, network coverage now extends to over 70 percent of the population with over 4,300 cell sites, including all major cities, while in Italy coverage has reached 50 percent of the population with over 3,200 cell sites and 70 of the 100 largest cities. Network coverage in Australia includes the five largest cities, while networks are also being rolled out across the Nordic countries. Hong Kong is set to launch service at the end of the summer with full coverage from day one.

An analyst told 3GNewsroom.com, "Things are not looking that bad for 3UK, it is likely that 3 will get its 1 million subscribers by the end of the year when it launches the pre-paid service, 3's sign-up rate should grow rapidly."

Country Summary

In the UK, the continuing roll-out of network coverage is progressing very well and the over 4,300 cell sites now in operation cover over 70% of the UK population and all major cities in the country.

In Italy, network rollout progress is also satisfactory and the over 3,200 cell sites on air cover over 50% of the population and 70 of the top 100 cities in the country.

In Australia, network coverage extends to the five largest cities with over 500 cell sites on air.

The Group's 3G operations in Sweden and Austria have started business with a soft launch and are continuing to roll out their networks in readiness for a fall and Christmas promotion campaign. Currently, Sweden's network covers most major cities with over 950 cell sites on air.

In Austria, the network covers approximately 30% of the population including major cities like Vienna, Graz and Linz.

In Denmark, network rollout covering major centres is being completed and business is targeted to commence in the fourth quarter.

In Hong Kong, the construction of the 3G network has been completed and 3G services are scheduled to be launched after the summer period with a network of over 1,000 cell sites providing full coverage.

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Hutchison reports tough first half for 3

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