3 UK On Target To Break Even By End Of 2005

LONDON -(Dow Jones)- 3 UK, the mobile telecommunications company owned by Hutchison Whampoa Ltd. (0013.HK) remains on track to hit its profitability targets and expects a good Christmas sales period.

On a conference call of journalists, 3 UK Chief Executive Bob Fuller said the company is back on track to break even at the level of earnings before interest and taxation, or EBIT, by the end of 2005.

3 UK had a troubled start after it launched third- generation, or 3G, services in the U.K. in 2003, due predominantly to handset issues.

But Fuller said: "The business has turned around substantially this year."

3 UK was the first operator to launch 3G services in the U.K.Vodafone Group PLC (VOD) launched its U.K. 3G services commercially earlier this quarter while rival Orange, owned by France Telecom SA (FTE), commercially launched its U.K. 3G offering Monday.

Fuller said he is pleased Vodafone and Orange have entered the market and said he believes both have launched their 3G services in response to 3 UK's success in gaining subscribers.

He said he expects Vodafone's advertising drive to boost 3 UK's success as more people will pay attention to 3G services overall.

But he said doesn't see Orange launching 3G with full force until the first quarter of 2005. He noted that the company is only distributing its 3G handsets through its own stores and over the Internet.

He said 3 UK will only reconsider its tariffs if its rivals offer similar deals to what it has now.

Fuller said offering the lowest prices is a "massive competitive advantage," and said the company will always strive to lead on costs.

He expects a successful Christmas sales period, as mobile phones are "back on the agenda as a must have product."

He said the company will continue to invest in quirky advertising as it has successfully differentiated itself operator amongst consumers. "We want to be seen as different - a bit more fun," he said.

3 UK reported in August that it had 1.2 million customers and an average revenue per user, or ARPU, of GBP43.22. It will update the market again in January.

Company Web site: Http://www.three.co.uk

-By Nic Fildes, Dow Jones Newswires; 44-20-7842-9264; nicolas.fildes@dowjones.com

(END) Dow Jones Newswires"

Posted to the site on 8th December 2004