3 piles on mobile subscribers

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The Independent Online

The mobile phone group, 3, said it was adding the equivalent of a small city to its UK customer base each month as it broke through the 1 million customer landmark.

The mobile phone group, 3, said it was adding the equivalent of a small city to its UK customer base each month as it broke through the 1 million customer landmark.

Figures released yesterday from its parent company, Hutchison Whampoa, showed that its UK third-generation mobile phone business now had 1.2 million customers. In July, it added 274,658 customers - a figure that 3's UK chief executive, Rob Fuller, said was the population of a small city.

The average monthly revenue per customer was £43.22, which Mr Fuller said was twice that of regular second-generation services. "We've proven that customers see value in our services," he said.

The average customer acqui-sition costs across the six countries in which Hutchison offers 3G services was €252 (£170) in July - down from the €299 average for the year so far. However, analysts pointed out that given that the company offers no subsidy in Italy, the figure for the UK alone was likely to be considerably higher.

Ben Wood, an analyst at Gartner, a consultancy, said that 3 was heavily subsiding its handset sales in the UK. "The key thing is that they've got through an important psychological barrier [1 million customers]. It's bit of a land grab. But you can't keep investing at that level forever."

Mr Fuller said UK business stood by its target of breaking even in late 2005 or early 2006. He denied the company was simply "buying" customers, saying the cost of handsets was continually coming down. "There's no giveaway in what we do," he said.

Hutchison's services in six countries have 3.3 million customers. The 3 Group made a loss of Hong Kong dollars 12.3bn (£860m) for the first half of the year. Hutchison's overall net profit doubled to HK$15.1bn, as exceptional gains from asset sales offset losses at its third-generation mobile phone business.

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