ASIA : Hutchison Telecommunications International Limited announces that as part of its ongoing efforts to improve financial performance amid the increasingly difficult market environment globally, particularly in Hong Kong, it has reviewed the cost components of a number of its operations including Hong Kong where operations will be streamlined and certain functions such as network and IT services and maintenance, are being outsourced.

Inset show Hutchison House, the HQ building of Hutchison Whampoa in Hong Kong.

Around 270 positions in Hutchison Telecom Group companies in Hong Kong have become redundant due to continuous automation of functions and improvement in processes. In addition, around another 480 Hutchison Telecom Group companies’ staff in Hong Kong will leave to join the outsource companies or other Hutchison Group companies or become contractors. In total, there will be a reduction of around 750 staff, around 87% of whom are from the mobile operations.

Hutchison Telecom’s outsource partners in Hong Kong are NEC and HP. The outsourced activities to be performed by NEC will cover certain functions including maintenance of the Hutchison Telecom Hong Kong group’s mobile networks while those of HP will cover the maintenance and certain functions of the Hong Kong mobile IT division. Both arrangements will take effect on 10 January 2005 for a term of five years. HP also became the IT outsource partner of Hutchison Telecom in Thailand on 1 January 2005.

Chief Executive Officer of Hutchison Telecom Dennis Lui said, “Hong Kong is the most competitive market in the world with around seven million population served by six mobile operators. This coupled with the reduction and ultimate retrieval of our CDMA spectrum and the possible issuance of further licences in 2008 has driven us into a situation whereby we have to change our mode of operation to adapt to this unfavourably changing environment.”

The Hutchison Telecom Hong Kong companies’ severance packages to employees leaving the Hutchison Group exceed statutory requirements and outplacement assistance for these employees has been arranged.

The measures are intended to enhance the financial performance and organisational efficiency of the Hutchison Telecom companies. This is expected to translate into more cost-effective operations while maintaining or exceeding
current service levels to customers. Mr Lui added, “We wish to assure our customers that service levels in terms of responsiveness and access will not be compromised and we renew our commitment that Hutchison Telecom will continue to set new benchmarks for quality telecom services.”

“The current measures in Hong Kong are part of Hutchison Telecom’s broad-based group-wide programme which Thailand, Israel and other countries have been or will be undertaking. However, we are confident that our company will be able to adapt well to the increasingly unfavourable environment in Hong Kong and will remain exciting and dynamic, leading to good financial performance for
shareholders,” continued Mr Lui.