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CSL will delay launching its third-generation (3G) mobile services until it gets more evidence of an uptrend in revenue from its data services, but it will increase spending on its network.

'We hope to double our data revenue this year,' said chief executive Hubert Ng Ching-wah. 'By that time we will gradually roll out our 3G service.'

Data revenue, including picture and ring-tone downloads and the popular short messaging service (SMS), accounted for about 5 per cent of CSL's six-month revenue of HK$2.13 billion.

On Thursday, CSL announced a 7 per cent drop in revenue for the half to December 31, while earnings before interest and tax increased 9 per cent to HK$253 million.

The subsidiary of Australia's Telstra did not release a net-profit figure, but it said it was the most profitable operator in Hong Kong with a revenue share of 32 per cent.

One reason for the improved profitability was the 34 per cent decline in its capital expenditure.

CSL spent only HK$119 million on its network in the first half of its financial year, compared with HK$180 million in the same period in 2001-02.

Last year, the company spent only HK$262 million on its network, down significantly from its usual annual capital expenditure of more than HK$400 million.

But Mr Ng said CSL would return to its average capital expenditure, with plans to spend HK$2 billion on its 3G network launch in the next three years.

'The faster the data market develops, the more we will commit to our network,' said Mr Ng.

He said he would adjust the speed of the launch based on the popularity of applications, handsets and video services, adding the firm probably would introduce some 3G services in dedicated districts this year.

CSL kicked off the year with a good start.

The No 2 mobile operator, which has one million subscribers, sold 200,000 GPRS handsets, of which 60,000 were multimedia service-enabled.

CSL users sent more than 300,000 SMS a day, Mr Ng said.

As of December, average monthly spending by CSL subscribers fell 4.5 per cent to HK$380 because of slow handset sales in the third quarter and lower IDD and roaming revenues, he said.

With strong handset sales and a normalised IDD rate, Mr Ng expected subscriber spending to stabilise at around this level.

CONFIDENCE BOOSTER

CSL said it was the most profitable operator in Hong Kong

Capital expenditure declined 34 per cent last year

CSL sold 200,000 GPRS handsets this year



CSL cautious about 3G launch as doubt over data revenues stays