Hutchison’s 3 Group revenues climb 6% in 2014; but Hutchison Asia Telecommunications sales drop 9%

26 Feb 2015

3 Group, the European mobile group owned by Hong Kong conglomerate Hutchison Whampoa, reported that its total revenue in 2014 climbed by 6% to HKD65.623 billion (USD8.461 billion) from HKD61.968 billion in 2013, covering operations in six countries – the UK, Ireland, Italy, Austria, Sweden and Denmark. 3 Group’s annual EBITDA and operating profit (EBIT) grew by 23% and 42% to HKD15.598 billion and HKD6.892 billion, respectively, which the company attributed to ‘improved net customer service margin, well-disciplined operating cost structures and continued realisation of post-merger cost synergies in Austria and Ireland’. With the exception of Italy, all 3 Group divisions increased their contributions to the group’s earnings during the year. 3 Group reported 29.537 million total registered mobile customers across its six European markets at the end of December 2014, up by 11% year-on-year, whilst its ‘active’ customer base increased 13% during the year to reach 25.031 million. On 15 July 2014, 3 Ireland completed the acquisition of O2 Ireland for EUR780 million (USD885 million) with an additional deferred payment of EUR70 million payable upon achievement of certain agreed financial targets, while in January 2015 3 Group agreed to enter into exclusive negotiations with Telefonica for the potential acquisition of British cellular rival O2 UK, for an indicative price of GBP9.25 billion (USD14.33 billion) cash and deferred upside interest sharing payments of up to GBP1 billion upon achievement of agreed financial targets by the combined business of 3 UK and O2 UK.

Hutchison Whampoa’s developing Asian markets division, Hutchison Asia Telecommunications (HAT) reported that its total active customer base across its three operating markets of Indonesia, Vietnam and Sri Lanka reached ‘approximately 54.5 million’ as of 31 December 2014, representing a 25% increase from the figure of 43.497 million reported for end-2013. In Indonesia, HAT said that its active customer base at the end of 2014 increased 35% from a year earlier to approximately 43.1 million. In Vietnam, Vietnamobile (a partnership with Hanoi Telecom Company) posted a 5% yearly decrease in its active customer base to roughly 9.4 million at the end of 2014 due to increased competition, with HAT noting that its strategy in Vietnam is ‘to manage the business to return and reduce investment cost and to convert from a business cooperation venture to a joint stock company when conditions are conducive’. In Sri Lanka, the active customer base increased by 25% year-on-year to approximately 2.0 million at the end of December 2014, HAT disclosed.

Despite the promising overall subscriber growth, HAT’s total annual revenue decreased 9% to HKD5.757 billion, down from HKD6.295 billion reported for 2013, while EBITDA swung to an annual loss of HKD278 million from 2013’s positive EBITDA of HKD819 million, and EBIT loss widened from HKD409 million in 2013 to HKD1.465 billion in 2014. This poor financial performance was mainly blamed on charges in the year of approximately HKD1.1 billion relating to ‘inappropriate dealer credit and commissioning practices’ in the Indonesian operation. Senior management of the Indonesian operation has been replaced and strengthened internal controls put in place to prevent any recurrence, and to ensure the business remains on a strong growth footing, the report added.

As previously reported by Hutchison Whampoa, its 65%-owned Hong Kong and Macau subsidiary Hutchison Telecommunications Hong Kong Holdings (HTHKH) posted a 27.5% rise in revenues in 2014 to HKD16.296 billion from HKD12.777 billion recorded for 2013 (largely based on an 89% mobile hardware revenue increase). Hutchison Whampoa’s telecoms interests also include Hutchison Telecommunications (Australia) which has a 50% interest in joint venture company Vodafone Hutchison Australia.

Subscribe

Subscribe to CommsUpdate to get the day’s top telecom headlines delivered to your email.

Subscribe to CommsUpdate

Feedback

Have feedback, corrections, or story ideas? Send them to editors@commsupdate.com.

Browse Past Issues

Filter

Filter CommsUpdate by the following categories or use the search.

Search

Visit our help page information on performing advanced searches, including how to restrict the results by country or company.

Advertise

CommsUpdate is an outstanding advertising venue for companies seeking to reach:

  • International carriers
  • Wholesale service providers
  • Equipment and software vendors
  • Telecom investors
  • Regulators

Learn more about advertising on CommsUpdate.

Share