Page 8 - Sphere No.31 (Jul 2012)

6 Sphere 31
Cove r S t o r y
In 2011, even as the world grappled with a cloud of economic uncertainty, Hutchison Whampoa was able to further strengthen its
balance sheet, complete a major infrastructure acquisition and continue its exploration of merger and acquisition opportunities. This
multinational conglomerate has now entered its “fat cow” years, as all major operations are cash flow positive and the company is
making an all-time high in recurring profit. The 3 telecommunications business has achieved critical mass and management sees the
company entering into a growth period.
The consistent growth in recurring earnings per share over the past four years has been promising, along with a growth in overall
earnings and an increase in dividends. These facts and figures are only part of the company’s success story, however. It has been
through the careful strategizational nurturing of individual operations, the diligent and prudent management of finances and the hard
work of Hutchison’s quarter of a million employees in 53 countries, that our six core business units are poised for sustained growth.
The Dawning of a New Era for
Hutchison Whampoa
Telecommunications
For the Group’s telecommunications division, 2011 was indeed the
dawning of a new era. The Hutchison Whampoa Group has been
in the telecommunications business since the 1980s, and in 2003
HWL launched 3G mobile telephony which pioneered mobile data telephony
and fundamentally changed the way people communicate. Under the brand
name 3, Hutchison rolled out 3G mobile data networks in Hong Kong, Austria,
Australia, Denmark, Ireland, Italy, Macau, Sweden and the UK.
Building the networks from scratch was a challenge for the division,
but the bigger obstacle was morphing consumer behaviour from merely using
mobile phones to talk, to using them for a myriad of other activities. Initially,
mobile data telephony was thought of as a video conferencing gimmick, but
today people have a hard time putting down their smartphones, using them for
email, socialising with friends through social media channels, communicating
via instant messaging, surfing the Internet, playing interactive games and
countless other activities made possible by high-speed mobile data networks.
By December 2011, 3 Group’s customers were using 19,621 terabytes per
month, or the equivalent of 35 trillion tweets or over 4.1 billion songs.
These higher-value smartphone and mobile broadband access users, in
combination with streamlined business practices, led to a notable increase in
revenue in 2011. Hutchison Telecommunications Hong Kong Holdings and
3 Group reported a 36 and 16 per cent increase, respectively. They each also
boast over 2.7 and 28.88 million 3G customers, respectively.
As mobile data networks migrate to Long Term Evolution (LTE) to handle
the increased data usage by customers, 3’s networks are already poised for the
development when the world’s handsets and other portable devices are ready.