3 gets ready to break even

3, the first mobile operator to launch a 3G network in early 2003, is expected to break even this year.

In announcing its half year results, 3's parent company Hutchison Whampoa revealed that 3's subscriber numbers have risen to 3.2 million, up from March's figure of three million.

However, while user numbers may be growing, the all-important monthly Arpu (average revenue per user) has slipped from March's £40.30 to £33.83, leaving the operator with less cash generated for every user it signs up for its network.

The company will be aiming to temper customer acquisition costs and 3 has already improved its ratio of more valuable contract customers to pre-pay users, to try to combat the Arpu decline.

The third-generation operator is managing to grow its share of non-voice Arpu - a key battlefield for mobile operators, confronting ever decreasing revenues from pure voice calls. Data now makes up 22 per cent of Arpu, compared to the 20 per cent 3 listed in its earlier March set of half-year results.

Hutchison, which operates in eight territories worldwide, has also announced its Italian subsidiary is expected to reach EBITDA (earnings before interest, taxes, depreciation and amortisation) break even this August. The company, which has around 4.5 million subscribers, is preparing for an IPO.

With the UK scheduled to follow suit before the end of the year, 3 UK could well go public during 2006.