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August 21, 1996


By CBR Staff Writer

Hutchison Whampoa Ltd’s 50.5%-owned Orange Plc turned in losses in line with expectations and appears to have curbed the number of subscribers lost from the service. Shares showed signs of recovery after it turned in losses of 125m British pounds for the six months to June on revenue that rose 157% to 257m pounds. Analysts forecasts had ranged from 100m pounds to 132m pounds with a consensus at 124m pounds. The company said the churn rate, or how many customers cease using Orange, decreased to 17.6% from 18.1% last year. Average monthly revenue per subscriber to the company’s personal communications services was up to 36.86 pounds from 36.51 pounds the same time last year, and usage was slightly up also. Orange also said subscriber acquisition costs, which include equipment subsidies and commissions, fell 9% to 269 pounds. However, it offered a ‘cautionary note’ with regard to incentives it may have to offer in the second half of the year, particularly around the end of the year, to keep up with the competition. The company’s Hutchison Paging, which enables UK customers to receive paging messages throughout Europe, is suffering from the overall lack of growth in the UK subscription-based paging market, the company said. Its subscriber base grew only slightly, by 1,000 to 54,000 as at June 30. Hutchison Cellular Services, a service provider that connects customers to Cellnet Mobile Communications Ltd and Vodafone Group Plc networks, says it is concentrating on higher value subscribers, and consequently saw its subscriber base fall to 144,000 from 163,000 last year. On the company’s flotation in March (CI No 2,882), it bought a major service provider in Germany and one in France, to expand its cellular service operations. Group nanaging director Hans Snook says Orange has plenty of capacity on its Groupe Speciale Mobile 1800 network for strong growth. He said Orange has a strong brand identity, and will continue to build on it, as well as evaluatuing commercial opportunities for any licenses offered abroad.

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