Hutchison Offers More Upbeat '3' News

After what would understatedly be referred to as a ‘slow’ start, Hutchison has released financials indicating that their UK ‘3’ operation achieved monthly EBITDA breakeven in December last year. Now, bear in mind that the “BITDA” in EBITDA stands for Before Interst, Taxes, Depreciation, and Amortization, which often amount to substantial sums. However, this is still good news for the early 3G mover. Globally, ‘3’s subscriber base has topped 8m subs, with 1.3 new adds in December alone (a big puchase period for mobile phones). While the 3 unit lost had losses of US$3.2m in 2004 (can that be right? that’s pocket change for Li Ka Shing!) the unit is expected to become profitable late this year. Better financial returns are largely being driven by lowered Subscriber Acqusition Costs, and cheaper handsets. In the linked article, Hutchison’s Li Ka Shing tries to cast this as ‘3’ meeting goals on target, but that’s a bit of revisionist history ignoring that the ‘3’ goals have been “updated”. Looking back, we’ve been quite hard on ‘3’, but we’d rather see them be successful than revel in their failure. This is good news for Hutch, for 3G, and the industry in general.

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