Operator to focus on higher-value customers as CEO reveals contract subscribers generate five times the revenue of prepay users
EE CEO Olaf Swantee says he expects to see a further decline in the number of prepay customers on its network as the operator focuses on higher-value contract customers.
The operator saw prepay customer numbers decline by 239,000 in its Q4 ending December 30, but it added more than 201,000 contract customers, resulting in an overall loss of 38,000 for the quarter.
Prepay now makes up 48 per cent of its customer base.
Swantee told Mobile News EE’s contract customers generate five times the revenue of prepay customers on average and the firm will give greater focus to this market segment.
He revealed that over 80 per cent of 4GEE customers are now using tariffs worth £41 a month and above – something he says has contributed to a 3.9 per cent increase in contract ARPU.
Swantee said: “Our first priority is to retain existing customers, and that is also the first driver of our 4G customer base – our own customers coming out of contract.
“We see a trend away from prepay to more traditional 24-month contracts. We believe the trend will further continue because the UK still has a larger number of prepay customers compared to elsewhere. The appetite for smartphones will not go away.
“We are very pleased with the progress in our 4G strategy, and we are satisfied with our differentiated pricing strategy.
“We really see that ARPU increase coming from those first customers moving across to 4G, who are spending 10 per cent more than they were before.”