Hutchison confident on early break-even for 3G

June 28, 2004

Hutchison Whampoa chief executive Canning Fok said the company's 3G mobile phone business could break-even earlier than first thought.

In an interview with Monday's edition of the Italian daily Corriere della Sera newspaper, Fok said, "I have always said that the breakeven at the EBITDA (earnings before interest, taxes, depreciation and amortisation) level will be reached in 2005, and break-even at the operating level in 2006."

Considering how the business is performing now, he expects break-even to be even quicker. Fok did not specify a time frame for breaking even but he expects the 3G services to contribute between 35-40% of group sales once it is fully operational.

According to Canning Fok back in May 2004, 3UK's CCA (Cost of Customer Acquisition) is currently averaging £220 while the average CCA in the UK is around £160 per customer.

Hutchison has launched 3G services in six other countries including Sweden, Denmark, Austria, Hong Kong, Australia and the UK, but has yet to launch in Israel, Ireland and Norway where it also has 3G licences. The Hong Kong conglomerate is expected to face tough competition as other operators are beginning to rollout 3G mobile services.

The company is also looking at possible investments in Italy.

"We are particularly interested in container ports and commercial distribution." Fok said