CDMA closure costs Hutchison dearly

Stuart Corner
Tuesday, 27 February 2007 04:50

IT Industry - Deals

The $307.9 million cost of closing its CDMA network has pushed Hutchison Telecommunications Australia's net loss for they year ended 31 December 2006 up 38.8 percent to $759 million.

Without this cost, the company achieved an underlying $95.8 million improvement from the prior year's loss of $451.5 million. During the year Hutchison almost doubled its cellular subscriber numbers to 1.2 million. However, it was able to lift revenue only 15.6 percent to $1.06 billion. Service revenue rose 76 percent to $849 million and the company reported an EBITDA positive result of $30.2 million, a $195.8 million turnaround on 2005.

"Reaching a positive EBITDA position in 2006 with a strong growth trajectory was a key milestone, and highlights the continued momentum of our business," CEO Nigel Dews said. "The closure of our 2G network helped enable a step change in scale, greater operating efficiencies and, importantly, greater focus on 3."

The company's efforts to get a greater percentage of its customers using revenue generating content services seem to have had little success, the figure rose only marginally from 53 to 56 percent of the total. And non-voice ARPUs, excluding those for customers who upgraded from the closed 2G network, increased only marginally from $19 in 2005 to $20 in 2006.

Customers signed up to 930,000 monthly subscription services, up from 521,000 last year and during the year, customers experienced 92.5 million content events in 2006, versus 49.4 million during 2005. This was an increase of 87 percent, which is roughly in line with the increase in user numbers.