Three UK is reporting an operating profit for the first time, boosted by a major network sharing deal, the arrival of the iPhone at the network and its unlimited data plans.
Parent company Hutchison Whampoa reported Tuesday a 47% jump in 2010 net profit, driven by a turnaround in its 3G mobile operations, which have suffered nearly a decade of heavy losses.
In the UK, Three’s fortunes turned the corner in the second half of the year, with the company delivering an operating profit of £6m by the end of 2010.
The profit rise coincided with Three UK’s deal to start supplying the iPhone, which kicked in by the second half of 2010. This was boosted by the launch and intensive marketing of Three UK’s 'One Plan,' aimed at boosting customer numbers, particularly in the prepaid sector.
The operator is also set to benefit from cuts to the Mobile Termination Rates, recently announced by Ofcom, which begin this month.
Three chief executive Kevin Russell (pictured) welcomed the results. he said: 'We will continue to operate with a profit as we grow the business.'
The network’s customer base grew 23% over the year to December 2010, with prepaid customer numbers up 51% and postpaid customer numbers up 7% in the period. Customer numbers totaled 7.2 million by 28 March this year.
However, customer service revenue fell 7% in 2010, compared to the previous year. Total revenue was £1.4bn. Whilst prepaid revenue stood at £169.9m, up 12% on 2009, postpaid revenue fell 7% on the previous year, at £1.2bn.
Blended prepaid and postpaid voice and text ARPU was also down 16% on 2009 at £22.60 (prepaid £8.45; post paid £29.36). However, non-voice accounted for 41% of total ARPU, standing at £9.16 per user.
Contract customers made up 55% of the total base on 31 December 2010 down from 64% the year before.