Customer boost for 3 despite loss

peoples-phone-text-message-received

Third-generation mobile phone network 3 has reported a rise in its UK customer base to 1.2 million.

The news came as the firm’s Hong Kong-based owner, Hutchison Whampoa, booked a first-half net loss of HK$8.92bn (£626m; $1.1bn) on its 3G business.

Globally, Hutchison said it now had 3.2 million 3G customers, in countries including Italy, Denmark and Austria.

3G services allow users to transfer larger amounts of data faster, offering video calling and messaging services.

Despite the losses at its 3G division, Hutchison – which is run by Asian billionaire Li Ka-shing – said first-half group net profits rose to HK$12.5bn, compared with HK$6.07bn in the previous year.

The profits were boosted by strength in its retail and property arms and its container ports operations.

“I think the pickup rate of our 3G subscribers in the coming months will be even better. Christmas sales are very big in the West,” Mr Li said.

But he added: “At the end of next year, 3G needs to be cashflow positive. That’s a very important target.”

In the UK, where Hutchison launched its 3G operations last year, the key average revenue per user figure (ARPU) was £43.22.

The company, which has previously struggled with bulky handsets and patchy network coverage, said its 3G network now covered 79% of the UK population.

A widening range of 3G phone handsets, particularly from South Korea’s LG Electronics, has helped raise user interest in 3’s services.

However, some analysts say Hutchison’s subscriber acquisition costs are much higher than the industry average. In July, the company said the average cost of acquiring a 3G customer was just over £174.

Hutchison is planning to spin off its emerging markets telecoms units in a move which should help it offset some of the costs of its 3G mobile business.