 "Hutchison 3G Business Behind Target")
Hutchison Whampoa is a year behind target in its U.K. third-generation mobile phone operations and expects its overall 3G business to be cash flow positive in 2008.
“With 3G, we are facing more competition than we originally expected, and we are slightly over one year behind budget in the U.K. But we are doing well in other locations, such as Hong Kong, Australia and Italy,” Li said in an interview posted at Forbes website.
Shares in ports-to-telecoms conglomerate Hutchison, which is spending roughly US$25 billion to build out its third-generation mobile phone business, fell 2.2 percent to HK$79.85.
Hutchison has been the most aggressive investor in multimedia-enabled 3G telecoms in Europe, but the loss-making business has been a drag on its share price since 2000.
Li said in the interview that the company had 14 million 3G subscribers globally, and that the Italian 3G unit would be its first to become profitable.
“Despite strong competition, our losses are narrowing every year, while our revenues are increasing. The handsets are better, nicer, smaller, quicker,” Li was quoted as saying.
He further added, “It’s only a matter of time before we reach profitability. The loss in 2006 was much less than in 2005, and the losses will continue to narrow in 2007. And we will be cash flow positive in 2008.”
Li expressed, “In telecommunications, another one or two years is nothing. It is a growth business, and we expect 3G to be a major contributor to our group in the future.”