EE reports increased loss for 2012, but “well placed” for 2013

EE reports increased loss for 2012, but “well placed” for 2013

19 FEB 2013

UK number one operator Everything Everywhere announced an increased loss for 2012, noting in a statement that despite continued economic uncertainty and regulatory pressure, “the Group remains well placed to make good progress towards delivering its 2013 goals”.

The company said that during the last year it had “made progress, executing on its business strategy while maintaining commercial momentum against a backdrop of macroeconomic weakness, regulatory pressures and a highly competitive environment”.

But while the headline feature of the period was the introduction of its LTE services late in the year – making it the first mobile operator in the UK to offer 4G services – it provided little in the way of guidance for this activity.

For the twelve months, the company reported a net loss of £191 million, compared with £104 million in the prior year, on revenue of £6.66 billion, down 1.9 per cent.

Mobile service revenue was £5.95 billion, down 2.6 percent from £6.11 billion. It said that the drop in revenue was the result of regulatory rate cuts, partially offset by growth in its contract customer base.

Excluding the impact of regulatory changes, service revenue would have been up 2.7 per cent.

Dividends paid to its parents during the year totalled £734 million.

At the end of 2012, the company’s 4G network covered 43 per cent of the UK population in 18 towns and cities, with its fibre infrastructure passing 11 million premises. It is targeting 55 percent LTE population coverage across 65 towns and cities by June 2013.

By the end of the year, 52 per cent of the Everything Everywhere group customer base was contract subscribers, up from 48 percent at the end of 2011. It also said it is “successfully upgrading existing customers to higher value plans”, with contract access fee increasing by 6 per cent year-on-year.

The company also noted smartphone growth, with 78 percent of pay monthly customers using such devices at year-end, up from 69 percent at the end of 2011.

It said it achieved an annual run rate of £369 million in gross operating expenditure savings, or 83 percent of its £445 million annual savings goal.

With the recent introduction of the EE brand for its LTE services, the company said it is “critical for the group to maintain and develop its three brands”.

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Steve Costello

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