Hutchison Whampoa Ltd. lost HKD 8.9 billion ($1.1 billion) on its 3G operations in the first half of the current financial year on revenue of HKD 3.7 billion ($475.3 million) as the Hong Kong-based conglomerate was weighed down with the start-up costs of the operations in Europe and Asia.
The 3G operation now has 3.2 million customers worldwide after adding 2.5 million in the first half and the pace is accelerating as 697,701 new customers were added in July.
The company said that limited availability of handsets hampered operations for the first two months of the year. But the situation was reversed in March-April and all handset suppliers met requested volumes.
Chairman Li Ka-shing said that with well-developed networks and an ample supply of slimmer handsets with long battery life, the technology risks involved in delivering 3G services have become insignificant.
While he said they did not underestimate the strength of competitors, he believed the 3 Group had already achieved sufficient critical mass in several of its key markets to be in a position to continue to press its ‘first mover’ advantages through the second half and into 2005.
Li said the 3 Group was positioned to make a significant contribution to the growth of the company and he was confident it will meet its free cash flow breakeven and profitability targets.