Hutchison Australia to face three year of 3G losses

May 18, 2004

The chief executive of Australian Hutchison Telecommunication said he expects the company's 3G business to continue incurring operating losses in the next two to three years.

Kevin Russell said in a shareholders meeting that losses incurred so far in 2004 suggest first half losses to be consistent with the previous half and remain within initial guidance of a Aus$3 billion peak funding requirement. In February, the company announced net losses of Aus$409.8 million for 2003. (£1 = Aus$2.43)

As Hutchison continues to widen its 3 network and move forward, "shareholders will be well placed to reap the benefits which lie ahead".

Hutchison's Orange mobile business achieved positive earnings before interest tax, depreciation and amortization (EBITDA) in 2003, while its customer numbers grew 23%. Russell believes the company's customer growth to be higher than all competitors in the Australian market. The combined customer base in Orange and 3 surpassed 500,000 in April.

"The customers we are adding in both Orange and 3 are exclusively post-paid, with a higher average revenue and margin profile than prepaid customers," Russell said.