Everything Everywhere sees shift towards post-paid subscribers in 2010

24 Feb 2011

Everything Everywhere (EE), the joint venture formed between UK mobile network operators Orange UK and T-Mobile UK, has announced that in the twelve months to end-December 2010 it had shed more than a million pre-paid subscribers. At the end of 2010 the JV’s total customer base stood at 27.984 million, of which 15.266 million were signed up to pre-pay tariffs; by comparison at end-2009 the operator reported a subscriber base of 28.175 million, including 16.305 million pay-as-you-go customers. The change in the make-up of the operator’s subscriber base is in line with its previously stated aim of focusing on contract customers which would generate higher revenues. Commenting on the data, Tom Alexander, Everything Everywhere’s CEO, noted: ‘Contract customer net additions over our first nine months were up 33% on the same period in 2009, up to 752,000, with 300,000 added in the fourth quarter. This growth has also translated into an increasing proportion of contract customers, as against pay-as-you-go, which was up to 44% of the base at the end of 2010, as compared to 40% at the end of 2009. This remains a critical value driver going forward, impacting ARPU, revenue and long-term profitability for the company. In addition, increased contract tenure, with 58% of customers on 24-month contracts at year end, compared to 29% in 2009, has been a strong factor in our reduced churn levels.’

In terms of the operator’s financial performance meanwhile, it said that for the nine months ended 31 December 2010 it had registered revenue growth of 1.5% year-on-year, excluding regulatory impact; in reported terms however turnover in 9M 2010/11 fell 2% y-o-y to GBP5.29 billion (USD8.18 billion). Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was GBP1.023 billion in the nine-month period, down from GBP1.17 billion a year earlier, impacted by ‘regulation and a renewed investment in contract customer growth across both brands.’

United Kingdom, EE, T-Mobile UK