Li Ka-Shing, the billionaire owner of Hutchison Whampoa, said he plans to increase his market share in telecommunications in Europe--and could also use depressed prices in the region to seek suitable acquisitions. Li's eagerness to expand his 3-branded telecommunications business is largely driven by slowdowns in other areas of his sprawling business empire, including in real estate in Hong Kong.
Li's comments were part of Hutchison's earnings report for the first half of this year, which showed "positive EBITDA less capex for the period" for its 3 Group mobile business. Indeed, Hutchison reported "significant" improvement in its mobile operations due to "strong market position" in the smartphones and mobile data. Specifically, 3 Group Europe reported its customer base increased 9 per cent during the period to 25.6 million customers (of which approximately 21 million were active). The business' active customers split between 14.6 million contract subscribers and 6.4 million prepaid customers.
But there were some bleak spots in Hutchison's far-flung mobile operations: As Mobile World Live pointed out, the operator's Austria business was up 122 per cent, its UK business was up 9 per cent and its Ireland unit was up 5 per cent, but 3's revenues declined in Sweden (down 14 per cent), in Denmark (down 11 per cent) and in Italy (3 per cent).
Perhaps most importantly, Hutchison predicted improvements in the months ahead: "Further progress in the transition to a non-subsidised handset model in its customer base, together with gradual stabilisation of European mobile termination regimes, are expected to further increase the division's contributions to the Group's overall results going forward," the operator said.
Li, which Bloomberg estimated is worth $27.1 billion, noted that the world's major economies are beginning to show signs of stabilization, and that Hutchison would use that trend to improve its market share, including possibly through acquisitions. Indeed, Hutchison most recently has been in discussions with Telecom Italia about combining their respective Italian mobile businesses, though those talks appear to have stalled.
Although 3 launched initially during Europe's transition to 3G technology, the company is now eying moves to LTE. In the UK specifically, the company set the fourth quarter as its LTE launch window.
"We're on track to launch in Q4 and we will offer 4G at no extra charge," Guy Middleton, head of corporate communications at 3 in the UK, told MobileMarketing. "When we switch on our 4G network well over a million of our customers will already have a 4G device, so they will get automatic and hassle-free access in 4G areas without the need to change plans or SIM cards. Everyone on 3 with a 4G device will be able to enjoy our 4G services as we roll out the network across the country to add capacity to what is already the UK's fastest 3G network."
Although a fourth-quarter launch puts Hutchison well behind EE (which launched LTE earlier this year) and Telefónica's O2 UK (which announced plans to launch LTE at the end of August), the operator appears to be set to undercut rivals by mixing LTE service into its existing rate plans.
And the impetus for Hutchison's LTE launch in the UK is clear; the operator said data usage on its network has increased more than 50 per cent during the past year, and that subscribers now use an average of 1.5 GB per month on average.
For more:
- see this Hutchison release (PDF)
- see this Mobile World Live article
- see this Reuters article
- see this Bloomberg article
- see this FT article (sub. req.)
- see this MobileMarketing article
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