MTR reductions dent Everything Everywhere revenue in 2011

21 Feb 2012

Everything Everywhere, the joint venture between UK mobile network operators T-Mobile UK and Orange UK, has released its financial results for the three- and twelve-month periods ended 31 December 2011.

Excluding the impact of enforced cuts to mobile termination rates (MTRs), the company noted that service revenues in FY2011 had increased by 2.1% year-on-year to GBP6.17 billion (USD9.7 billion); including the regulatory impact, however, turnover was actually down 2.1% compared to FY2010. Fourth-quarter service revenues, meanwhile, rose 1.2% compared with the corresponding quarter in 2010, although they fell by 4% when taking into account the regulated impact of MTRs. Underlying revenue growth, Everything Everywhere noted, was bolstered by an annual 7.5% increase in the group’s post-paid subscriber base, which registered its strongest ever quarter in terms of new contract customers in the last three months of 2011; in 4Q11 it saw 313,00 net new post-paid customers, while additions for the full-year period were 894,000. Further, Everything Everywhere claimed it had registered the best post-paid net additions performance on T-Mobile UK for both the year and fourth quarter since 2006.

As a result of the increased take-up of its contract tariffs, the percentage of its customers now taking a post-paid service had risen to 46.6% at end-2011 compared to 42.7% a year earlier. The company’s total subscriber base, meanwhile, stood at 27.563 million, down from 27.984 million a year earlier. Fixed broadband customer numbers continued to decline, falling to 713,000 at 31 December 2011, down from 741,000 a year earlier.

Everything Everywhere also highlighted continued progress with regards to simplifying and streamlining its business with a view to reducing costs. It claimed to have achieved an annual run rate of GBP278 million in annual gross opex savings, more than 60% of the GBP445 million annual run rate target it has previously said it aimed to achieve by 2014.

Commenting on the results, Olaf Swantee, chief executive officer of Everything Everywhere, said: ‘Our focus on operational excellence has generated solid performance over the year as we accelerated network and organisational integration to deliver planned cost savings. As a result of network sharing and customer experience improvements, we are seeing good commercial momentum and are capitalising on the smartphone and data opportunity to drive underlying growth.’

United Kingdom, EE