The CEO of 3 UK Robert Finnegan (pictured) used the company’s H1 results statement to once again highlight the benefits of its proposed merger with Vodafone’s local unit, as he described its current level of capital spend compared to earnings as unsustainable.
In a statement made with its financial results, which were released alongside those of parent company CK Hutchison Group Telecom (CKHGT), the executive described the floated deal with its UK rival as a significant step in an ambition to build one of Europe’s leading 5G networks.
“Not only will it create a best-in-class network for coverage and reliability, it will also provide the necessary scale to invest, grow and compete, as well as drive economic growth, innovation and jobs across all parts of the UK,” Finnegan claimed.
Although pointing to successfully growing the business in H1 and deeming its ongoing 5G rollout a success, he added “we are now at an inflection point”.
“As strong connectivity continues to be critical to how we live and work, we’re planning for the future. Our EBITDA continues to be below our capital expenditure, which is unsustainable going forward.”
In 3 Europe’s largest unit, Italy’s Wind Tre, CKHGT highlighted the positive impact of cost control initiatives including a rural JV signed in January. It noted this “more than offset continued reduction in wholesale margin and higher energy costs.”
Although continuing to record declining H1 revenue from Italy, down 3 per cent year-on-year, its pre-tax profit from the country was up 32 per cent.
Across CKHGT, which comprises 3 Group Europe and telecoms units in Hong Kong and Macau, revenue was flat at €4.9 billion. Net profit fell 57 per cent year-on-year to €89 million.