The Hindu Business Line : Hutchison Essar revenue rises 41 pc in 2005

Hutchison Telecommunications International, the Hong Kong-based holding company of the unlisted Indian telecom operations of Hutchison Essar, has announced its earnings performance for the calendar year 2005.

Out of total group revenues, Hutchison Essar contributed Rs 5,721 crore (converted from HK $), accounting for about 41 per cent for the year. This works out to an increase of 40.9 per cent growth over revenues of Rs 4,060 crore in 2004. The EBITDA (earnings before interest, tax, depreciation and amortisation) increased by 47 per cent to Rs 1,853 crore. The operating profit margin for the Indian operations worked out to 32.4 per cent, a 1.4 percentage point increase over 2004.

Mobile customer base up

The improvement in revenues has mirrored the growth in the mobile customer base and realignment of prepaid plans. In 2005, the mobile customer base of Hutchison Essar had grown by 59.4 per cent to 11.4 million. The net addition works out to 4.3 million for the year. According to the company, "the growth has primarily been in the prepaid segment driven by accelerated investment in coverage together with new tariff plans and realignment of existing plans."

The operating margins have improved primarily on account of improved margins in Andhra Pradesh, Chennai, Haryana and Rajasthan. The blended ARPU (average revenue per user) worked out to Rs 511, with a 2.5 per cent year-on-year decline in prepaid ARPUs and 7.4 per cent among postpaid subscribers. The prepaid accounted for 78 per cent of the total mobile subscriber base.

Capex at Rs 1,570 cr

For 2005, Hutchison Telecommunications International had invested Rs 1,570 crore in the Indian operations, the largest capital expenditure out of aggregate of Rs 2,700 crore spent by it. It has also announced that it plans to invest Rs 5,000 crore to Rs 5,750 crore in India in 2006 to double the size of the telecom network.

Hutchison Essar had announced the acquisition of BPL Mobile Communications and BPL Mobile Cellular in September 2005. As of January 2, 2006, it has completed the acquisition of BPL Mobile Cellular. The completion of BPL Communications (covering Mumbai) is subject to regulatory approval. At the end of 2005, BPL has a total mobile subscriber base of 2.9 million. The other key markets for Hutchison Telecommunications International are Israel and Hong Kong, which contributed 27 per cent and 24.8 per cent of the total revenues.

After the recent reorganisation of shareholding structure in Hutchison Essar, Hutchison Telcommunications International holds a direct equity stake of 42.34 per cent and an indirect stake of 8 per cent in the Indian mobile arm.

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