EE revenues fall 3 per cent in Q2


Operator blames regulatory pressure for dip as customer numbers drop by 188,000 but maintains it is still on track to meet joint venture targets as it reduces churn to 1.1 per cent

Everything Everywhere’s revenue has dropped to £1.66 billion in the three months to June 2011 compared to £1.72 billion in the same period last year.

Total revenue for the first half of 2011 is down to £3.37 billion, from £3.47 billion one year ago.

In total the operator parted ways with 188,000 net customers in Q2 and 443,000 net customers in total in the first half of the year.

Everything Everywhere’s total customer base for the end of Q2 was 27.54 million, slightly down from 27.93 million in the same period last year. It added 880,000 new contract customers to finish the quarter with 12.34 million contract customers.Prepay customers for the quarter stood at 14.46 million, down from 15.63 million in the corresponding period.

Breaking this down further – prepay customers dropped by a net 412,000 in Q2 and 806,000 over the first half of the year.

Mobile service revenue reached £1.52 billion in the second quarter, compared to £1.56 billion a year earlier.

However Everything Everywhere said underlying service revenues for Q2 grew by 2 per cent year- on- year, before the effects of regulatory impact, such as Mobile Termination Rate (MTR) cuts were accounted for.

It said in total the costs of regulatory impact had taken 3.5 per cent or £70 million off top line revenue.

It said non voice revenues accounted for 39 per cent, up from 36 per cent in the second quarter last year with data revenue contributing strongly.

Average revenue per user (APRU) for the second quarter was down £18.7 from £19.2 in the same period in 2010.

Despite the drops, Everything Everywhere said it has slashed contract churn to 1.1 per cent in the second quarter of 2011 compared to 1.4 per cent in the same period last year.

The operator said smartphone growth and data revenues had been strong in the first half of the year – 85 per cent of its contract customers now use smartphones and in total smartphone momentum delivered mobile service revenue growth of £3,071 million – an increase of 1.8 per cent from the same period in 2010.

It claims to have sold more Apple iPhones to UK consumers that any other operator in the final week of second quarter of the year – the first time it has done so since the device was launched.

Everything Everywhere claims T-Mobile continues to perform well and added its third consecutive quarter of sustained growth in net adds of customer contracts in the second quarter.

The synergy between Orange and T-Mobile is also performing strongly – total synergy capture reached £57 million in the first half of the year bringing the total figure up to £203 million which Everything Everywhere says is “ahead of its target”.

Speaking about the results outgoing Everything Everywhere CEO Tom Alexander said the first half of the year was a “period of good progress” for the company.

“Leveraging our unique strengths and market leadership, we are delivering on our strategic plan, set out in September 2010 and are way ahead of plan with our synergy capture.

“We are investing in building the the best network experience for our customers and in creating platforms for growth.”