UK market-leader Everything Everywhere reported lower turnover and earnings for Q2 and H1 2011, but its results were boosted by strong smartphone sales. The operator also said it was beginning to benefit from the economies of scale and synergies related to the merger of its two networks, the former T-Mobile UK and Orange UK. Turnover for the half-year came in at £3,367 million, down from £3,472 million a year ago, while earnings (EBITDA) fell from £632 million to £582 million. Underlying mobile service revenue growth was calculated at 2 percent year-on-year, excluding regulatory impacts. Non-voice revenue reached 39 percent, up from 36 percent in Q2 2010. The operator’s total customer base declined to 27.5 million at the end of Q2, down from 27.9 million a year ago. It added 236,000 contract customers in the quarter but lost 412,000 prepaid customers. Everything Everywhere’s latest numbers follow the departure of its CEO, Tom Alexander, who resigned last week for “personal reasons.”

The operator talked up its “biggest ever” quarter of smartphone sales, with 85 percent of new contract customers opting for smartphones, up from 84 percent in Q1 2011 and 64 percent a year ago. Moreover, some 67 percent of contract customers are now on 24-month contracts, up from 42 percent in Q2 2010. It also noted that it is now selling more iPhones than any other UK mobile operator. Monthly blended ARPU was up 2.2 percent year-on-year (excluding regulation), reflecting “progress in transitioning customers to high value contracts.” It added that the “synergy capture” in H1 was £57m in H1, and £203m cumulatively since the JV was formed, which it claimed was ahead-of-target.