Hutchison Whampoa's 3 Group bucks downward trend in Europe

Hutchison Whampoa's 3 Group Europe reported 6 per cent revenue growth in 2013 and also hit a new profit milestone of positive EBITDA less capex for the year, bucking a trend in Europe that has seen operators continuing to suffer from falling revenue and competitive pressures.

"Hutchison Whampoa's telecom business in Europe was really strong," Louis Tse, a Hong Kong-based director at VC Brokerage, told Bloomberg. "It added more wireless subscribers through acquisitions in the region."

Indeed, 3 Group's registered 3G customer base in Europe increased 13 per cent during the year and totals over 26.6 million customers, of which over 83 per cent are active.

Total revenue grew to HK$61.9 billion (€5.8 billion/$7.9 billion), and EBITDA increased by as much as 38 per cent to HK$12.6 billion.

"This encouraging performance reflects the group's strong market position in the smartphone and mobile data segments, the increased contribution from 3 Austria upon the completion of the acquisition of Orange Austria in January 2013, and a well-disciplined operating and capital expenditure profile," Hutchison Whampoa said in a statement.

In June 2013, 3 Ireland also entered into an agreement with Telefónica to acquire O2 Ireland for €780 million with an additional deferred payment of €70 million payable dependent upon achievement of agreed financial targets. The completion of this transaction, which is subject to regulatory approval, is expected in the second quarter of 2014.

3 Ireland recently said it will propose some remedies to address a list of concerns it has received from the European Commission over the planned acquisition.

Hutchison Whampoa also said it has completed spectrum acquisitions required to support LTE rollouts, which will continue in all of its major markets in 2014, and added that the transition to a non-subsidised handset model in 3 Group Europe's customer base was completed in 2013.

"European mobile termination regimes have also largely stabilised," the Hong Kong group added. "This division is expected to continue to increase its contribution to the group in 2014."

Hutchison Whampoa operates companies under the 3 brand in the UK, Ireland, Austria, Italy, Denmark, Sweden, Hong Kong and Indonesia. It has typically taken an aggressive approach to prices in the markets it has entered, with a strong focus on mobile data services. For example, it is often the only operator within a market to offer "unlimited" data services and in the UK it is offering unlimited LTE data plans.

For more:
- see this Hutchison Whampoa results statement
- see this Bloomberg article

Related Articles:
3 Ireland plans remedies for EU concerns on O2 merger
3 UK CEO: Britain could manage with 3 mobile networks
3 UK adopts stealth approach to LTE launch
Austrian operators slam high price of LTE spectrum
Eircom's Meteor wins Irish LTE race

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