HK's Hutch Telecoms bounds back into the black

HONG KONG, May 8 (Reuters) Hutchison Telecommunications International Ltd. , the telecoms arm of billionaire Li Ka-shing's Hutchison Whampoa , returned to a slim net profit in the first quarter of 2007 thanks to robust growth in India and Israel.

It racked up a net profit of HK0 million (US.14 million) in the first three months and served 32.99 million subscribers globally as at the end of March, which marked a 56 percent jump from a year earlier.

Analysts now fear the company has sacrificed much of its growth potential by agreeing this year to sell its Indian arm, which by subscribers made up four-fifths of the firm's business.

Subscriber numbers in India leapt more than 72 percent to 26.44 million in the quarter versus the same period of 2006 -- a pace exceeded only by its business in Sri Lanka, which has a tiny base of just 685,000 users.

But average revenue per user in India slid 14 percent to 390 Indian rupees (US.61), reflecting intense competition coupled with an aggressive growth strategy.

In Israel, its No.2 market, subscriber numbers grew by 5.6 percent to 2.7 million.

For full details of Hutchison's unaudited earnings and subscriber growth, please click on http://www.htil.com/eng/media/pdf/p070508.pdf In February, Hutchison Telecommunications agreed to sell its 67 percent stake in Hutchison Essar, India's fourth-largest mobile operator, to British counterpart Vodafone Group Plc.

for .1 billion.

That deal was approved by India's foreign investment body last week.

Hit by high start-up costs at its operations in Indonesia and Vietnam, HTIL recorded a net loss of HK million in the same period of 2006.

The firm held a shareholders' meeting on Tuesday, seeking minority shareholders' approval to pay 5 million to JV partner Essar in return for the Indian group's cooperation in completing the Vodafone-Hutch Essar deal.

The outcome of that will be announced on Wednesday.

''We expect to close the transaction with Vodafone, after which we will be one of the best and most strategically positioned telecom companies in Asia,'' Dennis Lui, chief executive, said in a statement.

REUTERS DKS DS1503