EE hit by regulatory impact, customer losses in Q3 – Mobile World Live

EE hit by regulatory impact, customer losses in Q3

24 OCT 2012

EE, the UK market leader due to launch the country’s first 4G network next week, reported a 3 percent year-on-year decline in mobile service revenue in Q3, which it blamed on mobile termination rate and roaming cuts.

The firm posted service revenue of £1.50 billion in the quarter ending 30 September, down from £1.54 billion a year earlier. Underlying growth – with the regulatory impact excluded – was 3.1 percent, the firm said.

EE cited a net increase of 250k postpaid customers as the main driver behind the underlying revenue growth in the quarter, a segment that now accounts for 51 percent of its customer base.

However, the operator’s total customer base declined 2.1 percent to 26.9 million from 27.5 million a year ago due mainly to a 10.1 percent drop in the prepaid base.

Smartphone penetration reached 74 percent of the postpaid customer base (up from 65 percent a year ago), increasing non-messaging data revenue to 31 percent of ARPU (up from 23 percent).

Overall mobile ARPU was down 1 percent year-on-year to £18.9 per month.

“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,” said CFO Neal Milsom.

“We have achieved key business goals in the past quarter and firmly established EE as the UK market leader.”

EE will switch on 4G-LTE in ten cities next Tuesday (30 October), and will cover 16 cities – a third of the UK population – by the end of the year. It is aiming for 98 percent coverage by 2014.