Parent of 3 Group CK Hutchison booked an impairment charge of HKD15.5 billion ($2 billion) on its Italian mobile operation in H1, blaming heightened competition in the market for lowering expectations on 5G-led growth.

Limited detail was given on its Italian unit in its results, however strong competition in the market has regularly been citied by the company as hampering its progress in recent financial statements.

In May, CK Hutchison blamed aggressive pricing from MVNOs and Iliad Italia, the latter of which was created as a result of the merger of the two separate businesses which created Wind Tre.

Without one-off items, the company noted in a statement H1 revenue and profit were both down year-on-year due to the adverse impact of “incremental tower service fees” alongside another fall in its customer base in Italy.

It highlighted operations in Italy and the UK were stabilising despite user declines at each, following “initiatives to improve margins and controlling costs as well as the gradual reopening of most European regions” following Covid-19 (coronavirus) lockdowns.

“3 Group Europe will…continue its focus on capturing emerging opportunities by accelerating the rollout of 5G services in order to support meaningful recoveries in the second half of 2021.”

Its European mobile units are under the conglomerate’s CK Hutchison Group Telecom segment alongside its business units in Hong Kong and Macau.

In H1 CK Hutchison Group Telecom recorded rises in profit and revenue, primarily due to booking an HKD25.3 billion gain from sales of tower assets in Italy and Sweden. However, this was partly offset by the impairment charge on its Italian business.

Hutchison Asia Telecommunications, which comprises its businesses in Indonesia, Vietnam and Sri Lanka, increased its total customer base though noted profitability and revenue suffered from “aggressive pricing” in Indonesia and an “unprecedented severity in the recent waves of the pandemic”.

CK Hutchison Group Telecom booked revenue of HKD45.8 billion, up 7 per cent year-on-year, while Hutchison Asia Telecommunications’ sales fell 4 per cent to HKD4.35 billion.

Net profit is not reported by division.

Across its varied business, which also includes ports, retail and infrastructure, CK Hutchison booked H1 net profit of HKD21.5 billion, up 27 per cent. Revenue increased 12 per cent to HKD212.3 billion.