EE narrows losses; runs tighter ship - Mobile World Live

EE narrows losses; runs tighter ship

20 FEB 2014

EE, the UK’s largest mobile operator, boasted an improved operational performance in H2 2013 and a full-year net loss of £76 million, which was a big improvement on the £195 million of red ink registered on restated figures for 2012.

The operator was helped by narrowly beating its “post-merger synergy savings” target.

EE, a merger between the UK operations of Orange and Deutsche Telekom, said it clocked up annual gross synergy savings worth £457 million. The original target was £445 million

EE emphasised, too, an improvement in its adjusted EBITDA margin performance, which excludes restructuring costs, plus management and brand fees.

The H2 2013 adjusted EBITDA margin was 25.3 per cent, up from 22.4 per cent the year before.

EE said the margin improvement was driven by post-paid growth and cost savings

As expected, the operator had a surge in 4G customer acquisitions during the fourth quarter.

Olaf Swantee (pictured), CEO, announced in January that EE had passed the 2 million mark. And during Q4, EE reported an increase of 816,000 LTE subscribers. That took the number of EE 4G customers, by the end of 2013, to just shy of 2 million.

EE claimed its 4G adoption rate is “on a par” with the world’s fastest.

The 4G subscriber performance was still not enough to prevent Q4 mobile service falling 1.5 per cent, quarter on quarter, to £1.45 billion. Full-year mobile service revenue, at £5.7 billion, was down 3.7 per cent compared with the year before.

EE attributes much of the fall to regulatory cuts in mobile termination rates and roaming.

Underlying mobile service revenue – which excludes the impact of regulation – was up 1.1 per cent, year-on-year, during Q4.

For the full-year, however, even when stripping out the effects of regulatory cuts, mobile service revenue growth was flat.

More encouragingly, EE is managing a shift towards higher value post-paid subscribers in its customer base mix.

Over the year, EE added 756,000 net post-paid customers, including 194,000 in Q4. Of its subscriber base, 58 per cent was post-paid at the end of 2013. It was 52 per cent twelve months previously.

It’s an encouraging trend since EE reports that its post-paid customers generate six times more ARPU than pre-paid.

Moreover, post-paid churn during Q4 was 1.2 per cent, the eleventh quarter in a row at 1.2 per cent or below.

EE is also seeing some pick-up in M2M connections, up 18.6 per cent to 1.4 million compared with the end of 2012.

Group turnover during Q4 was £1.67 billion, down 2 per cent year-on-year.

For the full year, EE racked up total revenue of £6.5 billion, but that was 2.6 per cent down compared with 2012.


Ken Wieland

Ken has been part of the MWC Mobile World Daily editorial team for the last three years, and is now contributing regularly to Mobile World Live. He has been a telecoms journalist for over 15 years, which includes eight...More

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