just for me..............3G market growth set to rise:...

just for me..............3G market growth set to rise: Hutchinson
By Trevor Chappell

HTA

Hutchison Telecommunications (Australia) Ltd expects strong growth from its 3G (third generation) mobile phones business in 2007 and an improved financial performance.


Hutchison reported an annual net loss of $759.4 million for the 2006 calendar year compared to a loss for the 2005 year of $547.3 million.


The latest result included an impact of $307.9 million related to the closure of Hutchison's 2G (second generation) CDMA (Code Division Multiple Access) network and upgrading CDMA customers to 3G.


After eliminating the network closure costs from the reported result, the company's underlying result was a net loss of $451.5 million, an improvement of $95.8 million.


"As we begin 2007, `3' (the 3 brand) continues to lead the 3G market," chief executive Nigel Dews said.


"With 3G market growth set to accelerate and as migration activity from 2G networks increases, we are well placed to attract more customers to 3 and continue to lead in 3G services, innovation and usage.


"We will continue to focus on improving our financial performance in 2007 as we build more scale in the business, and expect to exit the year operating cashflow positive."


Hutchison's earnings before interest, tax, depreciation and amortisation (EBITDA) for the full year was a positive $30.2 million, an improvement of $195.8 million over the EBITDA loss of $165.6 million of 2005.


The 2006 EBITDA improvement was a result of a 22 per cent lift in service revenue, 25 per cent growth in operating margins and a seven per cent decline in operating expenses.


Mr Dews said that in 2007, the company aimed to grow margins, which in conjunction with tightly controlled operating costs, would improve EBITDA and lead to positive operating cashflow.


Hutchison expected to shortly finalise a review of options for its future capital structure.


Mr Dews said new services from 3 in the mobile broadband space presented very exciting opportunities and Hutchison's network would continue to evolve.


In the first half of 2007, the 3 Group's `X-series' handsets would be brought to Australia, following their launch in the United Kingdom in December 2006.


"This will add new, exciting and innovative internet content brands to our 3G services which will continue to grow our revenue and usage," Mr Dews said.


SMS usage remained strong, lifting 131 per cent in 2006, with 791.2 million being sent - equivalent to 53 SMS per customer per month.


Mr Dews said handset manufacturers were packing more features into handsets, so handset costs were not expected to decline significantly over the coming year.


Hutchison said that in 2006, the 3G customer base grew by 591,000, or 90.4 per cent, to 1.25 million.


Excluding CDMA upgrades, 304,000 customers joined 3 - an increase of 26.7 per cent.


Customers were attracted by lower handset prices, content on 3 that included live coverage of the Ashes cricket tests between Australia and England, and music, games and ring tones.


Hutchison said more customers than ever were using non-voice services.


Hutchison's revenue rose 15.6 per cent to $1.06 billion for the year to December 31, 2006.


The company did not declare a final dividend.


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