CK Hutchison’s 3 Europe business reported a drop in Q4 2020 revenue as competition from MVNOs and Iliad Italia continued to hamper its largest unit Wind Tre, though the parent company’s profit was boosted by a lucrative deal to sell tower assets to Cellnex.
3 Europe comprises CK Hutchison Group Telecom Holdings assets in Italy, the UK, Republic of Ireland, Austria, Denmark and Sweden.
The division’s revenue fell 4 per cent year-on-year to €2.7 billion as its Italian Wind Tre unit, which makes up more than 40 per cent its takings, continued to suffer.
Wind Tre’s revenue dropped 5 per cent to €1.1 billion, attributed to continued “aggressive competition” from challenger Iliad Italia and MVNOs. In its results presentation, 3 Europe added this market environment had especially hit its prepaid base.
In the UK, its second largest revenue generator, the company highlighted a “volatile market landscape” due to the resurgence of Covid-19 (coronavirus) restrictions towards the end of 2020, though it recorded a 2 per cent revenue boost.
Net profit was not disclosed.
For the whole year, CK Hutchison Group Telecom Holdings, which also includes the multinational’s telecoms units in Hong Kong and Macau, booked an 85 per cent increase in net profit to €3.2 billion.
It attributed the rapid boost in earnings to gains from the sale of some of its European tower assets to Cellnex. Annual revenue was €10.2 billion, down 4 per cent.
The company noted while some of the cash from the Cellnex deal was received in 2020, several parts of the transaction were still outstanding at the close of the year.
In the current quarter, the Swedish part of the transaction closed, with the operator receiving €800 million. The sale of its towers in Italy is expected to be completed in Q2, with disposal of assets related to 3 UK anticipated to be finalised in Q4.Subscribe to our daily newsletter Back