During the six months to 30 June, Hutchison, operating the 3 Australia network, saw its net loss widen but the company improved the EBITDA loss. Service revenues were up to AUD 423.6 million, from AUD 364.4 million in the same period last year. EBITDA loss stood at AUD 1.3 million (prior to the cost of closing the CDMA business), compared with AUD 122.6 million in the first six months last year. The improved EBITDA performance is a result of a 16.2 percent increase in service revenue, improved operating margins and lower operating expenses. The net loss widened 71.9 percent to AUD 524.7 million, from AUD 365.9 million in H1 2005. Capex was AUD 84.5, down from AUD 147.9 in the year-ago period. The lower level of capex reflects the cost efficiency of a W-CDMA network for incremental capacity requirements, plus the cost benefits associated with a shared 3G radio access network infrastructure with Telstra. Blended ARPU dropped to AUD 65.48, from AUD 69.51 at the end of June 2005 and 3G ARPU stood at 73.88, compared with AUD 84.61 last year.

In February the company commenced upgrading customers from 2G to 3G technology with a view to closing the CDMA network. The costs for closing the network total AUD 299.2 million. Hutchison expects further cost savings will be realised in the second half of 2006 resulting in a rapid payback on the closure cost. In the first six months of this year, the company’s 3G customer base grew by 390,000, or 59.6 percent, (including 256,000 customers upgrading from the CDMA network) and totalled 1.04 million by the end of June. Of the total, 88.3 percent are postpaid customers. For H2, the company expects EBITDA to improve, benefiting from the strong growth in revenue and margin in the first half of the year.

Source- http://www.telecompaper.com

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