On the Road to a Million Customers

EE has announced it is on track to exceed its target of one million 4G customers by year-end, following the launch of its LTE network in October 2012, after being allowed to refarm its 1,800-MHz spectrum ahead of the 800-MHz digital dividend auction.

EE is still the only UK operator to have launched LTE nationwide, and has set itself ambitious growth targets in order to gain an advantage in the sector, ahead of rival launches which are expected imminently.

The UK regulator has also recently announced it has removed the technology restrictions for existing 2G (GSM) and 3G licences in the 900-MHz, 1,800-MHz, and 2,100-MHz bands – effectively making all the UK mobile licences technology-neutral, and allowing the operators to manage their bandwidth more effectively.

On top of the increase in LTE subscribers (up to 647,000, from 500,000 at the start of June), EE also revealed its postpaid customer base grew 6.3% y/y to 14 million, as postpaid customers now make up over 55% of EE’s total mobile subscriber base, as it continues to shed its legacy of prepaid customers from its pre-merger days as Orange and T-Mobile UK.

Nevertheless, this could not prevent its monthly average revenue per user (ARPU) falling 1.6% y/y to GBP18.4, as the operator was hit by increases in competition and regulation, while it grew its non-voice % of ARPU 7.5 percentage points over the past year to 54.6%, reflecting the growing importance of data use to revenue growth. Meanwhile, Chief Executive Olaf Swantee said the group aimed to increase its EBITDA margin to 25% by 2014, via a combination of ARPU growth and cost savings.

EE has revealed its second-quarter revenues fell 2.3% year-on-year (y/y) to GBP1.61 billion (USD2.47 billion), as it saw total customer numbers drop 2.4% y/y to 27.5 million, despite growing its 4G subscriber base to 687,000. EE, the United Kingdom joint venture of Orange and Deutsche Telekom (formerly known as Everything Everywhere), also announced its earnings before interest, taxes, depreciation and amortisation (EBITDA) in the first six months of 2013 rose 9.1% y/y to GBP734 million, while its EBITDA margin rose to 22.9% (from 20.3% in the first half of 2012); driven by postpaid customer growth, and strong progress on network optimisation and retail integration.

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David Dungay

Editor - Comms Business Magazine
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