EE service revenue slips on impact of MTR and roaming cuts

24 Oct 2012

The UK’s leading mobile operator EE, which offers services under both the Orange and T-Mobile brands, and will soon introduce a third customer brand – EE – for its soon-to-launch 4G services, has revealed a 3.0% year-on-year decline in service revenue in 3Q12. In the three months to end-September 2012 EE said that it had generated turnover of GBP1.496 billion (USD2.36 billion), but it did note that underlying service revenue, which excludes the impact of regulated mobile termination rate (MTR) and roaming cuts, had actually increase by 3.1% y-o-y. Total turnover for the three-month period was GBP1.671 billion, down from GBP1.697 billion a year earlier.

EE pointed to a net increase of 250,000 post-paid subscribers as key to the increase in underlying service revenue, while revealing that 51% of its customers are now on contracts, a development which it claimed was ‘improving the value mix of [its] customer base and driving underlying blended average revenue per user (ARPU) growth of 5% y-o-y’.

In operational terms, at the end of September 2012 EE reported a total subscriber base of 26.913 million, down from 27.493 million a year earlier. Fixed broadband accesses meanwhile totalled 723,000, up from 713,000 at end-September 2011, with the operator noting that revenues from that service had increased by 12% y-o-y, driven by strong multi-product adoption, and adding that 97% of new broadband customers were also taking line rental.

Commenting on the results, Neal Milsom, EE’s chief financial officer, noted: ‘We are delivering solid revenue performance and successfully attracting high value contract customers, while creating growth opportunities through our new superfast EE brand that will soon launch the UK’s first 4G mobile services. We have achieved key business goals in the past quarter and firmly established EE as the UK market leader.’

United Kingdom, EE