Hutchison plans India IPO; eyes Spain

By Tony Munroe and Shailendra Bhatnagar

HONG KONG (Reuters) - Ports-to-telecoms conglomerate Hutchison Whampoa Ltd. (0013.HK: Quote, Profile, Research, Stock Buzz) said on Wednesday that its cellular carrier in India aimed to go public this year to help fund its expansion in the world's fastest-growing mobile market.

The company, the most aggressive investor in European third-generation telecoms, also said that it was eyeing Spain as a potential market for expansion but has not made any decision.

Hutchison said its 3G mobile operation in Italy, which last month shelved a planned initial public offering amid gloomy telecoms market sentiment, has begun selling a so-called "3G in a box" service to carriers offering 3G in other markets.

Canning Fok, the group's managing director, however, declined to say when Hutchison's 3 Italia arm would relaunch its

IPO.

The deal was scrapped after the market assigned an enterprise value of just 7 billion euros (US$8.35 billion) to 3 Italia -- far less than the 12 billion to 15 billion euros the company had sought when it began working on the deal in 2005.

"I'm under no short-term need to do anything," Fok told the Reuters Global Technology, Media and Telecoms Summit.

He noted that the Italian business, with 5.6 million users, would generate earnings before interest, tax, depreciation and amortization (EBITDA) of 500 million euros this year after losing 600 million euros on an EBITDA basis in 2005.

Fok said the recent gloomy outlook issued by rivals such as Vodafone Group Plc. (VOD.L: Quote, Profile, Research, Stock Buzz) did not worry him, given that Hutchison competes in nearly saturated cellular markets.

Hutchison launched 3G service in 2003 in Italy and the UK, making it the first operator in Europe. It argues that as a pure-play 3G carrier its business model gives it an advantage over incumbents that are upgrading from 2G networks.

"A negative performance by our competitor because of a 100 percent penetrated market is much more comforting to Hutchison. At least I know where my revenues are coming from," he said.

INDIA IPO

In India, the group's Hutchison Telecommunications International Ltd. (2332.HK: Quote, Profile, Research, Stock Buzz)(HTX.N: Quote, Profile, Research, Stock Buzz) unit has been aiming since last year to list its majority-held Hutchison Essar arm. Part of the delay resulted from the wait for regulatory clarification on how much a foreign company can own in an Indian carrier.

"I think there is every intention for us to go IPO, subject to market conditions. This year will be a safe bet," Fok said.

The much-awaited deal is expected to be worth roughly $500 million, and stands to benefit from a roaring local stock market. Funds will be used to finance the company's fast-growing operations in India, where it enjoys the highest average revenue per user (ARPU) in a fragmented and fiercely competitive market.  Continued...