Hutchison Global Crossing has become the No 2 fixed network operator in Hong Kong, after raising its number of lines to 240,000 this month, according to chief executive Peter Wong King-fai. The company doubled its lines this year, surpassing the 220,000 lines of competitor Wharf New T&T, a unit of the Wharf group. The milestone was reached despite the financial difficulties afflicting one of the company's major shareholders. Hutchison Global Crossing is a joint venture between Hutchison Whampoa and Asia Global Crossing, whose US-listed controlling shareholder Global Crossing is on the edge of bankruptcy. Reports have cited Hutchison as a potential saviour for the company, which has US$10.9 billion in debt and preferred stock. Mr Wong said Hutchison Global Crossing was poised to reach break-even, or positive earnings before interest and tax next year. The venture no longer needed capital from the two companies after securing a HK$4.4 billion loan in September, he said. Three-quarters of Hutchison Global Crossing's lines are operated by its own network - the highest among the non-dominant operators. Other fixed-line operators rely heavily on inter-connection with the network of Pacific Century CyberWorks, which has been criticised for allegedly stalling their progress. 'We have spent the first six or seven years building our network. This is like a jig-saw puzzle. When we put it together, you know how much we have achieved,' Mr Wong said. Mr Wong said that by investing HK$11 billion, of which HK$6 billion was already committed, the company planned to cover half the local population in three years. It has now provided access for more than 2,000 buildings in Hong Kong. Out of the 240,000 lines it operated about 60 per cent (144,000 lines) were for commercial use. About 40 per cent (96,000 lines) were residential. Half of these were non-Hutchison group-affiliated property projects. The company's network covers more than 40 public housing estates. Turnover rose almost 16 per cent year on year to US$37.33 million for the three months to September. Net loss was US$12.67 million, 18.55 per cent higher on a year-on-year basis but 7.6 per cent lower than its second-quarter loss of US$13.72 million. For the first nine months, turnover was up 13.83 per cent year on year to US$103.57 million, while its net loss was 45 per cent higher at US$39.88 million. Hutchison Global Crossing excluded from its results the contributions of its data centre and electronic service delivery operations, which started at the beginning of the third quarter. Unlike other operators whose major revenue streams relied on international direct dial business, Hutchison's Global Crossing has a quarter of its revenue contributed by its IDD business, with most revenue generated from fixed-line and broadband business. Its broadband users surpassed 400,000 in April, or about 22.2 per cent of total home passes in Hong Kong. Its broadband unit had been growing 'very fast' since July, according to Mr Wong. Top operators in Hong Kong are adding an average of 10,000 users a month. 'The broadband business is still a virgin market in Hong Kong,' he said. 'It will be the battlefield for operators next year.'
