British mobile phone network Orange, 48.22 per cent owned by Hutchison Whampoa, hopes to see a monthly operating profit by the end of the year. The group, in operation for just under three years, predicts that it will record pre-tax profits for the first time in 1998-99. Yesterday, it revealed its first full-year results as a quoted company, reporting an in-line 1996 pre-tax loss of GBP229.1 million (about HK$2.38 billion), representing an increase of 63 per cent. It said its churn rate - the rate at which customers drop out of its system after a year - was 18.6 per cent, the industry's lowest. It said its average revenue per subscriber was the highest in the industry at GBP442 per year. 'Low churn and higher average revenues mean we are building a more valuable customer base, with significantly higher estimated contributions per customer than the industry average,' Orange managing director Hans Snook said. Shares in the group climbed five pence yesterday, or 2.3 per cent to GBP2.19, as the company also reported for the first time a net inflow of GBP50.8 million, against a net outflow in 1995 of GBP35.7 million. Turnover shot up 171 per cent to GBP619 million, and Orange network revenue rose 169 per cent to GBP266 million. The company said much of the turnover increase was from new subscribers, although its acquisition of service providers in France and Germany was a factor. 'We are meeting all our expectations, and so far we are exceeding the growth rate for last year,' Mr Snook said. The group reported a subscriber base at the end of February of 850,000, claiming 28.5 per cent of all new subscribers in the British market, where there are four players. It said its total market share had grown from 7 per cent to 11.5 per cent. Mr Snook said the company's latest innovation 'talkshare' - which allows different customers to be billed on the same account - was proving popular and it was considering extending the service to user groups, allowing multiple messages to be sent simultaneously. 'We are going to focus more on groups,' he said. Orange said it believed there was scope for a far higher rate of mobile phone penetration in the British market, which stands at 11.7 per cent. Finance director Graham Howe said countries such as Australia had penetration of more than 20 per cent, and in the US there was penetration of 17 per cent. It said penetration in Britain could reach 40 per cent by 2006. The group plans to continue building its customer base and to extend coverage by its network from 92 per cent to 96 per cent. It said it would introduce dual-band sets, which would allow Orange customers to use their phones on either the DCS-1800 technology used by Orange, or the GSM-900, which was more common around the world.