Everything Everywhere saw its mobile service revenues for the third quarter ending 30 September 2011 drop by 1.9% to £1,556m compared with the same quarter a year ago. However, if the impact of mobile termination rates (MTR) cuts is factored in the company showed underlying growth of 3.8%.
Services revenues were slightly up on the £1,516m made in Q2 2011. Total turnover for Q3 2011 was £1,697m, down 4.3% on Q3 2010, but with an underlying growth of 0.6% once MTR cuts are taken into account.
Everything Everywhere’s customer numbers showed signs of stabilising, although they were down 1.4% against the same period last year. However, the overall difference between Q3 and Q2 was less than 0.2% at 27,493,000 to 27,541,000 respectively.
Postpaid customers increased by 185,000 (Q3 2010 – 185,000), which was down on the 236,000 subscribers added in Q2 2011. The company said T-Mobile achieved its fourth consecutive quarter of postpaid customer growth. Postpaid customer churn was 1.1% (Q3 2010 – 1.4%) – the lowest in the industry, according to the company.
However, Everything Everything continued to shed prepay customers with 227,000 leaving the operator in the quarter (Q3 2010 – 177,000), although this was a big improvement on the 412,000 who left in Q2 2011.
Postpaid subscribers now account for 47% of the operator’s customer mix compared with 43% in the same period a year ago. Smartphone penetration stands at 65% (Q3 2010 – 45%). The company said that nearly half of customers on postpaid contracts generate five times more ARPU (average revenue per user) than prepay customers.
Underlying blended ARPU (pre- and postpaid) was up 2.2%, including the impact of MTR cuts at £19.30.
Non-voice revenue (data and messaging) was up 14% and accounted for 42% of ARPU (Q3 2010 – 36%), while non-messaging data revenue was up 35% at 23% of ARPU (Q3 2010 – 16%).
Everything Everywhere CEO Olaf Swantee (pictured) commented: ‘Despite ongoing economic pressure and the impact of regulated cuts to mobile termination rates, our business performance is in line with our current expectations. The success we’ve had adding nearly 900,000 postpaid customers in the last year is helping to drive underlying service revenue growth. I am particularly pleased that we are attracting high numbers of new smartphone customers and have the lowest customer churn in the industry.’
Swantee, who took over as CEO from Tom Alexander in September, said that Everything Everywhere’s post-merger synergy plan for achieving cost savings remained on track. Swantee has cut senior management roles by 25% since coming on board. ‘We continue to make progress reducing costs and simplifying the business,’ he said.