3 UK claims 1.2m subscribers

Took a little time

By Drew Cullen • Get more from this author

Posted in Mobile, 19th August 2004 12:58 GMT

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3 UK today claimed 1.2 million subscribers, at last taking it above the million subscriber target it set for itself to reach by Christmas last year. Worldwide, the Hutchison Whampoa-owned 3G mobile phone network operator has 3.2 million subscribers as of today, a net gain of 2.5 million customers in six months.

3's UK launch last year was bedevilled by poor coverage, expensive tariffs and crap phones. Since then it has pulled its socks up, with better phones, better retail distribution and a good old-fashioned price war. Which is good for customers, but not necessarily for Hutchison Wampoa's profit and loss account. However, it is making some progress here too, at least on a per customer basis. And 3 UK customers appear to be relatively free spending, accounting for an ARPU (average revenue per user) of £43.22 per month.

In July, group acquisition costs averaged €252 per customer, compared with the average customer acquisition cost of €299 in the first seven months of the year. According to Hutch, the seven month average reflects slow sales, a more limited handset range and higher handset prices in the early months of the year. It expects rapidly declining costs, gaining price breaks from the suppliers as volumes ramp up.

Of course, Hutchison is trying to launch 3G networks in several countries - Italy, Denmark, Austria, Sweden, Australia and Hong Kong - as well as the UK. This immensely ambitious undertaking is costing the company serious money. Earnings Before Bad Stuff for the first six months of the year show a loss of HK$4,153m (c. $532.5m). Throw in interest, depreciation etc. and the headline loss balloons to HK$8,920m (c. $1.437bn).

Hutchison Whampoa is a big conglomerate but even it will struggle to fund losses at this rate. ®.