Hutchison reports 1.73 million 3G users

May 20, 2004

Hong Kong's Hutchison Whampoa said Thursday that subscribers to its 3G mobile phone service have reached 1.73 million users world-wide.

The company also said at the annual meeting that its 3G operation is on track to break even in EBITDA (earnings before interest, taxes, depreciation and amortisation) by 2005, and said it would not need to raise additional funds for 3G.

"From our perspective, we have passed the riskiest point of 3G investment," said managing director Canning Fok.

On its own turf, Hutchison increased its subscribers from 36,500 in March to 84,000.

Hutchison's Italian operation showed an increase in its ARPU (average revenue per user) to 43 euros a month but ARPU in Britain dropped to £44 a month.

"Today, we tell you that our number of worldwide subscribers is at 1.73 million. Perhaps in 10 days, we'll have over two million," Chairman Li Ka-shing told reporters after the meeting.

Analysts believe Hutchison is adding customers at the expense of heavy subscriber subsidies. Estimates include subsidies of £200 for every subscriber in Britain and 100 euros for each subscriber in Italy. Hutchison is predicted to have between 3 and 5 million users by the end of the year.

South Korea's LG Electronics became Hutchison's fourth handset supplier recently and has agreed to deliver three million 3G phones to Hutchison.