EE, the largest mobile operator in the UK, claimed the best quarterly 4G performance ever recorded by a European operator with 1.3 million new LTE customers during Q2.
Overall growth in post-paid customers, B2B momentum, M2M traction, lower capex – plus a sleeker operation – also helped EE make a modest H1 net profit of £1 million compared with a £86 million loss in the first six months of 2013.
“Today’s results demonstrate that consumers and businesses are responding to our strategy to provide the UK’s biggest, fastest and most reliable network,” remarked Olaf Swantee (pictured), CEO. “We are delivering on our goals to rapidly transition our pay monthly customer base to 4G, generate significant merger cost savings and improve our EBITDA margin performance.”
EE’s 4G subscriber base was 4.2 million as of 31 June. The operator reckons it is “firmly on track” to exceed its 6 million 4G target set for the end of the year.
Of its consumer and B2B subscriber base, EE reports that 60 per cent are on post-paid plans (Q2 2013: 55 per cent), which carry six-times higher ARPU than pre-paid customers.
EE says more than 5,500 corporates are now using its 4G services, while M2M connections were up 19 per cent during Q2, to 1.8 million.
H1 EBITDA margin was up 2.2 percentage points, to 21.1 per cent. EE attributes much of the improvement to network rationalisation and a trimming down of its retail operation.
A whittling down of the pre-paid base – reduced by 202,000 during Q2 alone – helps explain why H1 mobile service revenues dropped by nearly 2 per cent, to £2.8 billion.
Total H1 revenue, which includes equipment, fixed broadband and wholesale revenues, was £3.11 billion (H1 2013: £3.21 billion).
While EE trumpets a low 1.1 per cent churn rate for post-paid consumer and business customers, this has come at a price. Subscriber retention costs (per gross addition), according to EE, were up 15 per cent, to £193, during Q2.
EE had a total of 30.8 million connections as of 31 June, down 0.8 per cent from 12 months previously.